Spanish locations earned the attention of Woody Allen (Vicky Cristina Barcelona) and Steven Soderbergh (The Argentine and Guerrilla) in 2007. This year Universal and Working Title's Iraq-set The Green Zone, directed by Paul Greengrass and starring Matt Damon, is shooting on location around the country.
Now the Spanish capital of Madrid is set to have its own fully functioning film studio, La Ciudad del Audiovisual, by 2011. Spanish real estate company Gestesa is looking to team with local film and TV production companies to build the $312m (EUR200m) studio in Loeches, a small town 15 minutes north-east of Madrid. The complex will offer production facilities, offices, sound stages and a film school.
"When we talk with people in the industry from the US and Europe they always ask two questions," says Samuel Castro, head of press at the Madrid Film Commission. "The first is what incentives each region can offer and the second is what studios are available. Here in Madrid we have the infrastructure to support international productions, but we don't have a really big studio."
Around 60%-70% of the country's audiovisual companies, including service companies, are based in Madrid. "We think it would be easier to make co-productions with other countries, including the US, but also places like Cuba, if we had a main studio in Madrid," says Castro.
A Madrid studio would complement Alicante's City of Light (Cuidad de la Luz) studios, which rank among the best in Europe, and the forthcoming studios being built near San Sebastian. It would also catapult Spain to a position as one of the world's leading international locations. The country has much to offer - the infrastructure is good, the sun shines around 270 days per year and it boasts varied locations, including medieval cities, castles, beaches, snowy mountains, lunar volcanic landscapes and the deserts so appreciated by Sergio Leone.
Expertise is solid, too. Set director Pilar Revuelta and make-up artists David Marti and Montse Ribe, for example, won Oscars for Pan's Labyrinth.
Spain's main drawback has been that it is no longer a particularly cheap option, even when combined with compulsory TV financing accessible to local co-production partners.
Mike Day, managing partner of Palma Pictures, a Mallorca-based studio and production services provider, admits: "The subsidies still can't compare with Hungary, the Czech Republic, South Africa or Australia - but Spain is closer for most producers, and the low costs of crews, food and accommodation put us on a par with cheaper places.
"We are certainly much better value than France, Germany, the UK and Italy," Day contends. "It would take a lot of production to swamp Spain. I don't think you could say the same yet about countries like Romania."
Albert Martinez-Martin, in-house producer for the UK's Future Film Group, which co-produced Transsiberian, advises: "People looking to co-produce with Spain should look for companies that bring something extra in terms of distribution or sales, international know-how, relationships with TV stations to ensure pre-sales, and broadcasters themselves, which are putting money into big productions capable of attracting international actors.
"You have a huge advantage with companies like Filmax, who sell the films themselves and can test their commerciality in festivals before they're made," he continues. "It gives you much more financial and creative support than making the film and then seeing if it works."