How can international projects access the region's slowly increasingnumbers of subsidies and incentives' JEAN NOH explores the key entrypoints
Filmindustries in Asia are comparatively young and less developed thantheir Western counterparts, where government subsidies and taxincentives are available more readily.
Therefore the major reasons for shooting in Asia have usually had more to do with tapping into growth markets and low costs.
However,pockets of soft money do exist as governments look to attractinternational shoots, both for the inward investment and to give theirlocal workforces more experience.
And it is not always necessary to work under co-production treaties to access incentives in this entrepreneurial region.
AlthoughSouth Korea's film development policies have often been referred to asa model for other countries, the past two or three years have seen thelocal industry running into what Korean Film Council (KOFIC) chairmanKang Han-sup describes as 'a depressive crisis'.
Among othersolutions, Kang points to a vision of an expanded market with Asiancountries in particular sharing talent, ideas, technology and boxoffice.
It is estimated the majority of South Korea'sfilm-making workforce are currently either unemployed or working inrelated sectors such as TV or advertising.
These skilledworkers could be put to good use on co-productions. Korea's CGI andpost-production sector, which has experience on high-qualityeffects-driven films such as D-War, The Restless and The Host, is also on the lookout for international work.
Sincelast year, several of Korea's regional film organisations have startedto offer locations incentives, such as a scheme launched by the SeoulFilm Commission which will refund 25% of production expendituresaccrued in the city, up to a maximum of $100,000 per project (seelistings on pX for details of more incentives).
In addition,Korea's Gyeonggi province has launched an initiative to promoteco-ventures with Hollywood, which includes a $100m fund for films,animation and games projects with global appeal.
South Korea hasonly one film co-production treaty - with France - but co-productionsdo not need to go through treaties to apply for KOFIC's local supportprogrammes, or for investment from KOFIC-supported funds. KOFIC hasscore-card guidelines giving points for elements such as origin ofdirector, cast, script and financing.
For example, Kwak Jae-yong's Cyborg She,which has a Korean director, co-producer, script and post-productiondone in Korea, fulfilled enough requirements to receive investment fromKorea's Centurion Movie & Knowledge 3rd Investment Fund, despitebeing shot in Japan with a Japanese cast.
However ThreeKingdoms: The Resurrection Of The Dragon was disqualified despite 90%Korean financing, because almost everything else came from HongKong/China.
'Since 2005, KOFIC has also been running a $400,000support programme for international co-productions which benefitedfilms such as Hong Sang-soo's Tale Of Cinema [co-produced with France'sMK2]. But we're looking into creating a larger internationalco-production film fund next year,' says Jeon Yoon-hyung, manager atKOFIC's international promotion department.
Singapore
Singaporeoffers a raft of incentives which are designed to develop the citystate as a media financing hub. In addition to encouragingprivate-sector involvement in the film industry (see sidebar opposite),Singapore's Media Development Authority (MDA) offers various subsidiesthat are open to international co-productions, ranging from projectgrants to the Scheme for Co-investment in Exportable Content (SCREEN).Also, the Singapore Tourism Board runs the Film in Singapore! Scheme(FSS) which subsidises up to 50% of costs incurred while filming in thecity state and has supported projects such as Dance Of The Dragon,directed by Max Mannix.
'In Singapore we're developing media fromthe economic benefits perspective, but also to promote culturaldiversity - a two-pronged initiative,' says MDA deputy director,business development Michelle Lui. 'We're trying to developinternational partnerships in all different media, for example withco-production agreements with Canada, New Zealand, Australia, Korea andItaly.'
Hong Kong
Insharp contrast, Hong Kong has always relied on its close links to China- and its favoured status under the CEPA trade agreement - rather thanincentives when it comes to attracting international partners. 'HongKong has always been more focused on the commercial aspect offilm-making,' says Wellington Fung, secretary -general of Hong Kong'sFilm Development Council (FDC).
The FDC oversees the $38m FilmDevelopment Fund, which aims to support low and medium-budget films inorder to support a new generation of film-makers. Co-productions areeligible for the fund, but the mainstay of each project needs to be aHong Kong entity and projects need to employ a certain proportion oflocal talent. The fund targets films with budgets less than $1.6m(HK$12m), with support capped at 30% of the budget.
Aside fromthe fund, the FDC offers loan guarantees to film producers, but thereare no tax incentives as corporate and individual tax rates are low andthere is no sales tax in Hong Kong.
Taiwan
Taiwan'sGovernment Information Office (GIO) has experimented with tax breaks,but its initial 20% tax credit ended up supporting local companies. TheGIO now runs a scheme under which foreign productions spending morethan $100,000 in Taiwan can be reimbursed at 15%-20% of local cast andcrew salaries, 5% of transport and accommodation expenses and 15% oflocal production and post-production costs.
'Taiwan's productionincentives have mainly been for local artists and Chinese-languageproductions,' says Steve Chicorel, vice-president at Taipei-basedDouble Edge Entertainment. 'But they should try to bring in moreactivity the way Canada and Australia did, by opening up tointernational productions. You get huge growth economically,educationally and experience-wise that ultimately benefits localtalent.'
He adds: 'We're working on a film set in Japan andChina which was supposed to do coverage for this in Taiwan, but weopted for Vancouver where we can get 45% [back]. We're also setting upthree films in Korea where we are getting much more than incentivesbecause we are also accessing equity funding.'
Thailand
InThailand, where international film-makers have benefited from low costsand experienced crews for decades, the government is working oncreating a tax-free zone for foreign film-making as well as atax-reduction and refund system. However, the country's currentpolitical instability raises questions about their feasibility.
StevenSquillante, executive producer on The Weinstein Company's Shanghai,which recently wrapped in Thailand, suggests the country could benefitfrom waiving its 7% sales tax.
'Getting rebates out ofgovernments can be tough,' he says. 'But if they could just waive theVAT then right away you get 7.5% back. Then if you can find a way toget another 3%-7.5%, you get 10%-15% back and that would put Thailandin a position where it is amazingly competitive.' Squillante adds thatThailand is already competitive in terms of logistics and costs.
Japan
Japan'sAgency for Cultural Affairs (Bunka-Cho) offers subsidies of at least$414,000 (¥50m), capped at one third of total production costs, toeligible international co-productions. Films to have taken advantage ofthe initiative include Canada-Italy-Japan co-production Silk, starringKeira Knightley.
But the Japanese market remains insular aslocal producers can recoup at home and there is little interest inattracting offshore production. 'Tax and subsidies are not sucheffective incentives for international co-productions for Japaneseproducers at this moment,' says Takashi Uchiyama, an adviser at theVisual Industry Promotion Organisation (VIPO). 'The marketattractiveness and/or cultural merit of each project are consideredimportant instead.'
However, even Japan, which Uchiyama saysruns the risk of becoming the 'Galapagos Islands of internationalco-production', is coming out of its shell. More co-financing deals arebeing struck as local production budgets rise and it becomes moreexpensive to acquire foreign product. But in keeping with Asia'sentrepreneurial spirit, very few of these deals rely on soft money.
Filmindustries in Asia are comparatively young and less developed thantheir Western counterparts, where government subsidies and taxincentives are available more readily.
Therefore the major reasons for shooting in Asia have usually had more to do with tapping into growth markets and low costs.
However,pockets of soft money do exist as governments look to attractinternational shoots, both for the inward investment and to give theirlocal workforces more experience.
And it is not always necessary to work under co-production treaties to access incentives in this entrepreneurial region.
AlthoughSouth Korea's film development policies have often been referred to asa model for other countries, the past two or three years have seen thelocal industry running into what Korean Film Council (KOFIC) chairmanKang Han-sup describes as 'a depressive crisis'.
Among othersolutions, Kang points to a vision of an expanded market with Asiancountries in particular sharing talent, ideas, technology and boxoffice.
It is estimated the majority of South Korea'sfilm-making workforce are currently either unemployed or working inrelated sectors such as TV or advertising.
These skilledworkers could be put to good use on co-productions. Korea's CGI andpost-production sector, which has experience on high-qualityeffects-driven films such as D-War, The Restless and The Host, is also on the lookout for international work.
Sincelast year, several of Korea's regional film organisations have startedto offer locations incentives, such as a scheme launched by the SeoulFilm Commission which will refund 25% of production expendituresaccrued in the city, up to a maximum of $100,000 per project (seelistings on pX for details of more incentives).
In addition,Korea's Gyeonggi province has launched an initiative to promoteco-ventures with Hollywood, which includes a $100m fund for films,animation and games projects with global appeal.
South Korea hasonly one film co-production treaty - with France - but co-productionsdo not need to go through treaties to apply for KOFIC's local supportprogrammes, or for investment from KOFIC-supported funds. KOFIC hasscore-card guidelines giving points for elements such as origin ofdirector, cast, script and financing.
For example, Kwak Jae-yong's Cyborg She,which has a Korean director, co-producer, script and post-productiondone in Korea, fulfilled enough requirements to receive investment fromKorea's Centurion Movie & Knowledge 3rd Investment Fund, despitebeing shot in Japan with a Japanese cast.
However ThreeKingdoms: The Resurrection Of The Dragon was disqualified despite 90%Korean financing, because almost everything else came from HongKong/China.
'Since 2005, KOFIC has also been running a $400,000support programme for international co-productions which benefitedfilms such as Hong Sang-soo's Tale Of Cinema [co-produced with France'sMK2]. But we're looking into creating a larger internationalco-production film fund next year,' says Jeon Yoon-hyung, manager atKOFIC's international promotion department.
Singapore
Singaporeoffers a raft of incentives which are designed to develop the citystate as a media financing hub. In addition to encouragingprivate-sector involvement in the film industry (see sidebar opposite),Singapore's Media Development Authority (MDA) offers various subsidiesthat are open to international co-productions, ranging from projectgrants to the Scheme for Co-investment in Exportable Content (SCREEN).Also, the Singapore Tourism Board runs the Film in Singapore! Scheme(FSS) which subsidises up to 50% of costs incurred while filming in thecity state and has supported projects such as Dance Of The Dragon,directed by Max Mannix.
'In Singapore we're developing media fromthe economic benefits perspective, but also to promote culturaldiversity - a two-pronged initiative,' says MDA deputy director,business development Michelle Lui. 'We're trying to developinternational partnerships in all different media, for example withco-production agreements with Canada, New Zealand, Australia, Korea andItaly.'
Hong Kong
Insharp contrast, Hong Kong has always relied on its close links to China- and its favoured status under the CEPA trade agreement - rather thanincentives when it comes to attracting international partners. 'HongKong has always been more focused on the commercial aspect offilm-making,' says Wellington Fung, secretary -general of Hong Kong'sFilm Development Council (FDC).
The FDC oversees the $38m FilmDevelopment Fund, which aims to support low and medium-budget films inorder to support a new generation of film-makers. Co-productions areeligible for the fund, but the mainstay of each project needs to be aHong Kong entity and projects need to employ a certain proportion oflocal talent. The fund targets films with budgets less than $1.6m(HK$12m), with support capped at 30% of the budget.
Aside fromthe fund, the FDC offers loan guarantees to film producers, but thereare no tax incentives as corporate and individual tax rates are low andthere is no sales tax in Hong Kong.
Taiwan
Taiwan'sGovernment Information Office (GIO) has experimented with tax breaks,but its initial 20% tax credit ended up supporting local companies. TheGIO now runs a scheme under which foreign productions spending morethan $100,000 in Taiwan can be reimbursed at 15%-20% of local cast andcrew salaries, 5% of transport and accommodation expenses and 15% oflocal production and post-production costs.
'Taiwan's productionincentives have mainly been for local artists and Chinese-languageproductions,' says Steve Chicorel, vice-president at Taipei-basedDouble Edge Entertainment. 'But they should try to bring in moreactivity the way Canada and Australia did, by opening up tointernational productions. You get huge growth economically,educationally and experience-wise that ultimately benefits localtalent.'
He adds: 'We're working on a film set in Japan andChina which was supposed to do coverage for this in Taiwan, but weopted for Vancouver where we can get 45% [back]. We're also setting upthree films in Korea where we are getting much more than incentivesbecause we are also accessing equity funding.'
Thailand
InThailand, where international film-makers have benefited from low costsand experienced crews for decades, the government is working oncreating a tax-free zone for foreign film-making as well as atax-reduction and refund system. However, the country's currentpolitical instability raises questions about their feasibility.
StevenSquillante, executive producer on The Weinstein Company's Shanghai,which recently wrapped in Thailand, suggests the country could benefitfrom waiving its 7% sales tax.
'Getting rebates out ofgovernments can be tough,' he says. 'But if they could just waive theVAT then right away you get 7.5% back. Then if you can find a way toget another 3%-7.5%, you get 10%-15% back and that would put Thailandin a position where it is amazingly competitive.' Squillante adds thatThailand is already competitive in terms of logistics and costs.
Japan
Japan'sAgency for Cultural Affairs (Bunka-Cho) offers subsidies of at least$414,000 (¥50m), capped at one third of total production costs, toeligible international co-productions. Films to have taken advantage ofthe initiative include Canada-Italy-Japan co-production Silk, starringKeira Knightley.
But the Japanese market remains insular aslocal producers can recoup at home and there is little interest inattracting offshore production. 'Tax and subsidies are not sucheffective incentives for international co-productions for Japaneseproducers at this moment,' says Takashi Uchiyama, an adviser at theVisual Industry Promotion Organisation (VIPO). 'The marketattractiveness and/or cultural merit of each project are consideredimportant instead.'
However, even Japan, which Uchiyama saysruns the risk of becoming the 'Galapagos Islands of internationalco-production', is coming out of its shell. More co-financing deals arebeing struck as local production budgets rise and it becomes moreexpensive to acquire foreign product. But in keeping with Asia'sentrepreneurial spirit, very few of these deals rely on soft money.
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