The December 2004 tsunami may have swept away many shooting locations in Thailand, but the territory's film sector has made a swift recovery.

In 2006, 23 international feature films were shot in Thailand, contributing a combined $25m (bht874m) to the Thai economy. This marks an increase of 40.5% from 2005, the year following the tsunami.

A major contributor last year was the English-language remake of the Pang Brothers' Bangkok Dangerous, which brought in $5.7m (bht200m). According to the Thailand Film Office, the government agency that promotes Thailand as a production hotspot, that is the same amount as Oliver Stone's historical epic Alexander, which shot in Thailand three years ago.

Unlike most international productions that choose Thailand for its beaches and jungles, the new Bangkok Dangerous film, which stars Nicolas Cage as a hitman, uses the Thai capital Bangkok as its main location. Apart from three days in Prague, the entire production was filmed in Bangkok over nine-and-a-half weeks. 'We wanted to make a Thai movie with a US actor,' says William Sherak from Blue Star, the film's producers. 'And Bangkok is where we wanted to shoot.'

Although Thailand is notorious for its high tax rates - a 10% withholding tax from foreign casts and a 7% non-refundable VAT - Sherak does not bemoan the lack of major financial incentives as production costs are already much cheaper than the US. Through local fixer Living Films, the production recruited a technical crew consisting almost entirely of locals.

Recently, the country's fortunes as an international film hub have also been subject to a volatile political climate. Following months of political uncertainty, the military entered Bangkok last September in an attempt to topple prime minister Thaksin Shinawatra.

'We didn't panic. It was more of a shock to know of the coup. But people were very nice and the coup was non-violent. We all ended up safe,' says Sherak. 'Our shoot was delayed only for half a day and resumed right away. The production, in the end, wrapped on time and within budget.'

Despite the coup, director Ridley Scott was not deterred from partially shooting his latest film American Gangster with Denzel Washington in Thailand. With the support of local fixer Santa International Film Productions, Washington spent early November - barely two months after the coup - in the mountainous north, which stood in for Vietnam.

If Thailand's international reputation has survived the bloodless coup, the bomb attacks in Bangkok on New Year's Eve which killed three people has raised a red flag over security.

However, Thailand Film Office chief Wanasiri Morakul says: 'We've received no cancellations on foreign productions.' She also reassures that the situation is back to normal and Sylvester Stallone is marching ahead with Rambo IV in Chiang Mai in the north of the country, far away from the centre of political turmoil.

'Shooting is due to begin on February 26 and 100% will be shot in Thailand,' confirms line producer Russ Markowitz of local fixer Legend Films. He adds that as a US citizen he feels comfortable working in Thailand even after the bombings.

To address the lack of major tax incentives, the Thailand Film Office has recently submitted proposals for tax refunds to the new minister of tourism and sports, Suwit Yodmanee. Attractive tax incentives could be introduced later this year while the interim government is in office.