Magazine article Variety

Worldwide Mantra: RUNAWAYS WELCOME

Magazine article Variety

Worldwide Mantra: RUNAWAYS WELCOME

Article excerpt

Nations eager to lure production with a variety of incentive packages

One man's loss is another's gain. While Hollywood producers lament the lack of local production, territories around the world are benefitting from the exodus, as a raft of factors - tax incentives, a filmmaker-friendly infrastructure, co-funding and favorable exchange rates - are successfully luring production from the U.S. and elsewhere.

According to Joseph Chianese, exec veep of financial solutions at Entertainment Partners, 32 foreign jurisdictions consistently attract production.

Europe's soft money sources remain a gold standard for filmmakers. Many current films, such as the Ron Howard pic "Rush," Wes Anderson's "The Grand Budapest Hotel" and Fox's "The Book Thief," are German co-productions, as filmmakers tap into the country's solid incentive package, which offers a rebate of up to 20% plus support from a number of regional film funds.

The U.K., too, has been buzzing with business, including Marvel's "Guardians of the Galaxy" and WB-Village Roadshow's "Edge of Tomorrow" (aka "All You Need Is Kill"), and its biggest coup - the next "Star Wars" installment, directed by J.J. Abrams.

Blighty offers a quite competitive tax credit: Films with a core expenditure of £20 million ($31 million) can claim a cash rebate of up to 25% of the qualifying film production expenditure, while films with a core expenditure of more than $31 million can claim 20%.

In fact, the U.K. is so heavily booked with productions that this year Pinewood is opening a studio in Malaysia. (See story, opposite page.)

Countries like South Africa, Hungary, the Czech Republic and Ireland continue to be welcoming to the biz, as even more nations enter the competition.

Ireland's government last year extended its tax incentive for the film, TV and animation industries until 2020. The tax relief scheme, Section 481, will be restructured as a tax credit in 2016, when it will include further enhancements, notably increasing the tax rebate to 32%, from 28%, of expenditure.

James Hickey, chief exec of the Irish Film Board, notes that while the incentive Ireland offers is high as far as tax rebates go, a key selling point is that the credit is paid immediately.

"Twenty-eight percent of the qualifying spend of a film's budget is actually what you get paid on day one," Hickey says. "There is no discounting, and you're paid upfront."

The country has carved out its own niche by housing high-end TV such as "The Tudors" and "Vikings." Hickey says the incentives have helped the Ireland biz ramp up in the face of the economic recession. "There was a reduction in local production, but we're now picking up again," he says. …

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