The Hong Kong film industry has taken another step towards building a professional film financing infrastructure with the release of a legal documentation guide, sponsored by the Hong Kong government's Film Development Fund.
The "Legal Documentation Guide on Film Financing and Production" was drawn up a Hong Kong law firm, Fong & Ng Solicitors, in association with Canadian firm Goodmans and the mainland's King & Wood.
It contains 28 boilerplate contracts - based on those commonly used in Hollywood and Canada - in areas including production and services, financing, distribution, soundtracks and merchandising.
According to Fong & Ng, the guide was developed to help local producers understand the legal framework of international film financing and production. The Hong Kong government is also hoping it will encourage the banking sector to become involved in financing local films.
"We need a film financing mechanism in Hong Kong that we can then share with other territories in the region which have had similar experiences to us," said Derek Yee, chairman of the Hong Kong Film Directors' Guild, at a conference held to announce the introduction of the guide.
Producer and Edko Films executive director Bill Kong added: "Interpretation of the law is a crucial element when financing a film. We need to be aware of international standards if we want to access overseas finance. Chinese legal contracts are very different to those used in the US."
Hong Kong filmmakers have traditionally relied on private investment or pre-sales to other South-East Asian territories to finance their films. But as traditional markets have all but disappeared, the industry is increasingly turning to international financing structures - including co-productions, completion bonds and bank financing - in an attempt to produce more competitive films.
However, local banks have shied away from filmmakers - mostly because they know little about the film industry and find it difficult to assess risk.
The Hong Kong government also plans to launch the Film Guarantee Fund - a new initiative designed to help local filmmakers obtain financing - before the end of this month. The fund will underwrite loans made to Hong Kong filmmakers by banks and other lending institutions - to a maximum of $336,500 (HK$2.625m).