May 13, 2010

How Brazilian Cultural Incentive Law works

Let me explain how things work here in Brasil if you want a cultural incentive for your project from the government, its really interesting, but really hard.

You have a project in your mind. You write this project down with all idefault parts for a project (mission, vision, description, justification, innovative and differential values and aspects, reach, target, credits (staff) and credentials and, most importantly, budget, for example). You enter the governmental site MINC, Cultural Ministry, log in and submit your project. If you are lucky, the government will get back to you saying you are approved to get financed with a incentive law by sponsors for the specific project you submitted and for the specific budget you requested. Know that getting approved to the Rouanet's Law is to get the permition to your sponsor have discounts in the value they sponsor through governmental taxes. ok?Uff! So, that's the easy part.

The hard part is to get a sponsor. With the government's approval secured, you have to find out which company works with this specific cultural incentive law you applied. Found that, you knock many many doors until you find a company that says YES to your project. They give you the money and you put it on your project the way it was approved by the cultural incentive law. The company will get a discount in the amount they sponsored in their next year's income tax. And everyone is happy!

Of course, there are good and bad points. For example:

1. The companies are the ones that judge the projects and select which  are worth sponsoring or not by their on rules;

2. The company disburse the full amount now and will get the money back in their tax income months later. That can affect their cash low in 4 months at least;

3. You have lilttle flexibity to change your project if something changes in between and this process can take a while;

4. The salaries are limited by the government. If the government things 15k is too much to pay the director, he will limit your paying to 9k and you will have to deal with it. Your project will only have 9k of incentive law for the director salary. All lines of the budget are discussed.

Thats how works here in Brazil. What about your country?

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