Investing in Brazilian Culture

there are some interesting rules in Brazil that allow companies (and individuals) to invest money in arts and movies, and to deduct that investment from their income taxes.  In this way, all investments in Brazilian film is tax deductible, and is why you see companies like Petrobras, Banco do Brasil and others investing heavily in Brazilian film production.  This is very similar to how Brazil funded the development of the airline industry (Embraer).  Companies that invest benefit because of the good will that these investments create in the community, and since the investment comes off of their taxes...there is no risk, no down side. 

Named after the Representative who pushed the bill forward, the Law Rouanet allows tax payers (both persons and corporations) to make donations or sponsorships to cultural projects and get a tax exemption proportional to the incentive.

Click the link to access the full text of the Law Rouanet (in Portuguese only); the law is nr. 8313, promulgated on 23rd December 1991.

The law instituted the National Program of Support to Culture (PRONAC), with the goal to support cultural projects. The Program would be funded by two kinds of sources: official sources and private sources; the official sources are listed in the article 5.

The article 18 establishes that tax payers, persons or corporations, can use fractions of the income tax due to donate or sponsor cultural projects; article 25 establishes the projects which can be beneficiary; article 26 establishes the tax exemptions (up to eighty percent of the amount donated, if persons, or fourty percent, if corporations).

This law is being of enourmous benefits to Brazilian culture; tax payers loose nothing by helping cultural projects, and have much to gain, by associating their names to successful movies or plays.

The donators, besides funding the projects, will pay attention to the quality of results (they want to be associated with good movies, not bad ones); they can't interfere with the implementation of the project (the law prohibits donations to any affiliated party), but they can choose to whom they will donate. On the other hand, the film makers will do their best to present a quality project, so as to attract wealthier donators.

This new philosophy replaced successfully the previous one, where the government had the power to ellect the beneficiaries of the public funds; then, political connections were more important than a good project when funds were being seeked.

All Brazilian movies which became hits have associated sponsors, based on this law. The number of movies grew after this law. The quality of productions improved much after this law.

External links:

Example of companies investing in Brazilian film "Tropa de Elite" (Elite Force):  http://www.istoedinheiro.com.br/noticias/1941_TROPA+DE+ELITE+NO+CINEMA 

(translated to English with google translate)