The Baltic states, comprising Estonia, Latvia and Lithuania, are emerging as Europe's newest low-cost production hub, says UK-born Gary Tuck, managing director of Lithuania-based Baltic Film Services, which entices and services international productions. These include Ed Zwick's Second World War drama Defiance, starring Daniel Craig, which is now shooting at the Lithuanian Film Studios (LFS). Tuck says his business has seen a 50% increase in foreign productions over the last two years.

Brad Anderson's crime thriller Transsiberian, starring Woody Harrelson, shot at LFS last winter. "If we had shot in Germany, Transsiberian would have cost about 30% more," says producer Julio Fernandez of Spain's Filmax. "Although (Lithuania) cannot contribute as much money as Germany, France or Spain, it does offer other advantages." He cites the quality of the crews and facilities. LFS came on board Transsiberian as producers, as it did for Marko Makilaakso's zombie-war thriller Stone's War which shot in Lithuania earlier this year.

Barr Potter of the US's Media Wide Consultants, which produced Stone's War and represents LFS in Los Angeles, also points to the quality and dedication of the crews. Potter says Lithuanian crews work 12-hour days, six days a week, "at costs well below shooting in the US". However he points out the language barrier can present a challenge.

Stage space in the region is limited but growing. Lighting and grip equipment are readily available, but cameras are scarce. LFS is the biggest and most established, with four soundstages, a small backlot and plans to add two more stages in 2008. In the Lithuanian capital of Vilnius, production company ARTeta has three stages, the largest of which is 900sq m.

The region's other major production centre is in Latvia. Cinevilla Studio, outside the capital Riga, has a 150-hectare backlot which includes a 19th-century set used for $3m local production Defenders Of Riga. The capital is also home to Riga Motion Picture Studios, which has three stages, the largest of which is 988sq m.

Latvia is generally about 15% more expensive than Lithuania and Estonia, owing to a higher cost of living and slightly higher inflation. Also the infrastructure is less developed and productions need to bring in more equipment. "The local industry is virtually all commercials so crew ask for commercial rates - not balancing against the longer term of employment a film offers," Tuck explains. That said, he says his company generally works out good deals with crews, sometimes bringing in Lithuanians. Latvia also has a very pro-film government which is eager to attract more productions.

Producers considering shoots in the Baltic region should plan well in advance. "Things take more time and not all the usual requirements for productions are available at the drop of a hat," says Tuck. "There's a labour and skills shortage so crew will have to be supplemented by bringing in some key heads of departments."

Otherwise, visiting film-makers might be surprised at the quality of life in the region. "Most visitors expect a grim, post-Soviet atmosphere," says Tuck. "But it's quite the reverse."

Black Nights Film Festival

The key showcase for local films is also a networking opportunity for film-makers

The Black Nights Film Festival (November 15-December 9) and Baltic Event (December 2-6) is the region's leading film event, taking place each year in the Estonian capital Tallin and overseen by festival director Tiina Lokk.

Black Nights presents around 200 films from 60 countries, drawing film-makers from the Baltic States, Scandinavia, Russia and further east who come to see and compete in the EurAsia programme. This year's edition will see no world premieres but offers high-profile exposure to anticipated local films such as 186 Kilometers and Georg, in the Estonian Feature Film Competition.

The Baltic Event gives film-makers and financiers the opportunity to meet face to face. Participation in the market is open to projects from the Baltic States, Central and Eastern Europe, Scandinavia and Russia.

Of 12 films presented at last year's event, two are shooting and three are in pre-production. It was at the inaugural Baltic Event in 2005 that Romanian Palme d'Or winner Cristian Mungiu met his future co-producers for 4 Months, 3 Weeks & 2 Days.

Who to know in the Baltic region

Lili Pilt

Head of international relations, Estonian Film Foundation

The EFF awards more than $3.7m in production finance annually.

Contact: lilipilt@gmail.com

Ramunas Skikas

Owner, managing director, Lithuanian Film Studios

The biggest facility in the region boasts four sound stages and has recently housed HBO's Elizabeth I as well as numerous international TV productions.

Contact: ramunas-skikas@lfs.lt

Gary Tuck

Managing director, Baltic Film Services

Tuck relocated from the UK to the Lithuanian capital of Vilnius in 2005, after first working in the region as the UK line producer on Jekyll And Hyde for Universal/Working Title TV. He is now waiting for planning permission to build a media park, part of which will be a studio complex with 6,000sq m of stages.

Contact: tuck@easynet.co.uk

Ilze Gailite Holmberga

Managing director, National Film Center of Latvia

As well as helping to promote Latvian film internationally, Holmberga oversees the $4.7m in public support for Latvian film-makers.

Contact: ilze.gailite@nfc.gov.lv

Katrina Berzina

Head of management, Cinevilla Studios

Cinevilla is Latvia's main production centre with two sound stages and a 150-hectare backlot. Recent productions include Defenders Of Riga and Aigars Grauba's Dangerous Summer.

Contact: karinab@cinevilla.lv.