Malaysia is poised to see a raised profile on the international film scene, thanks to government support, new studios and confident local producers.

Although it has a thriving film industry and expanding box office, Malaysia has not appeared as proactive on the international front as its tiny neighbour to the south, Singapore. But this looks set to change thanks to the Malaysian government’s new focus on the content industry, the upcoming launch of the Pinewood Iskandar Studios and a new-found confidence amongst local producers that could help raise the profile of this dynamic South-East Asian nation.

At this week’s MIPCOM market in Cannes, the secretary general of Malaysia’s Ministry of Information, Communications and Culture (MICC), Dato Sri Kamaruddin Siaraf, introduced two new funds to support the local content industry – the CGI Fund for features and documentaries, which has a pot of $43m for three years, and the Creative Industry Development Fund, with $33m for three years.

The CGI Fund offers grants of up to $624,000 towards the visual effects of movies or documentaries that are produced locally or with international co-production partners. The Creative Industry Development Fund aims to support digital multimedia projects, including TV, mobile and internet content. 

The new funds are part of a big push by the Malaysian government to develop the country’s creative industries, increase exports and encourage co-production with international partners. Creative content is one of nine industries highlighted by Malaysia’s Economic Transformation Programme (ETP) and the government hopes to build it into a $1bn industry by 2020.

In addition, government investment company, Khazanah Holdings, is pumping $120m into Pinewood Iskandar Studios, a joint venture with the UK’s Pinewood Shepperton, due to open in 2013. The government hopes the studios will attract international production, grow inward investment, develop local expertise and position Malaysia as a production hub. Located in the Iskandar district in southern Malaysia, just a 45-minute drive from Singapore, the studios will be part of an ambitious new metropolis also featuring a media village and cyberport.

“There’s a real focus on content – government departments are working together to figure out how to streamline the industry and incentives are also on the agenda,” says Pinewood Iskandar CEO Michael Lake. “There’s a real push to make this happen and the investment in infrastructure is incredible.”

Export is also high on the list of priorities. Malaysia’s independent filmmakers, such as Ho Yuhang and Tan Chui Mui, have been making waves on the international festival circuit, but most commercial production has been too small-scale or local in content to travel. However, the local market is expanding due to new cinema openings – last year box office hit $162m (RM518.2m), a 36% increase compared to 2008 – and local producers are starting to make decent numbers on their films. Action film KL Gangster grossed a healthy $4.3m this summer and production has increased from 20 films a year in 2007 to 40 films this year.

Filmmakers are now turning their attention to more exportable content such as KRU Studios’ $6m action adventure The Malay Chronicles: Bloodlines, which US-based Epic Pictures is selling internationally. Malaysian animated feature Seefood was a hot seller at Cannes this year for Hong Kong-based sales agent Golden Network and Easternlight Films recently sold Dain Said’s action drama Bunohan [pictured] to Universal Pictures for a slew of territories including UK, Germany, France, Australia and New Zealand.

The Malaysian government is also starting to support export of the country’s film and TV content. This week, Malaysia’s National Film Development Corporation (FINAS) took a delegation of more than 30 companies to MIPCOM and also had a strong presence at the Cannes film market in May. Part of the export strategy involves co-production – Malaysia is already an active co-producer for TV and animation projects and hopes to expand this to film. FINAS and MICC are currently in talks with Screen Australia about an Australia-Malaysia co-production treaty and also hope to have treaties with Canada and France.

When it comes to private sector financing with international partners – Malaysia is still not on the same level as established financing centres such as Hong Kong and Singapore, but there are some deep-pocketed players in the territory with international ambitions. “There are definitely opportunities for international producers at least on a private equity level,” says LA-based producer Tim Kwok, who co-produced Bunohan with Malaysian production house Apparat.

“It might not be for larger productions but for smaller to mid-level budgets, the equity interest is there. There are local players in the country that are interested in working with international ventures.”

However, Kwok says the introduction of more robust incentives is essential to increase the territory’s attraction to international producers. Currently territories such as Australia, New Zealand and Singapore offer greater incentives and another neighbouring nation, Thailand, while it doesn’t offer incentives, has lower overall costs. The Malaysian government is now actively considering incentives and has been examining options such as Australia’s producer offset scheme. 

“If and when the Malaysian government is able to figure out a simple tax incentive structure for international productions – regardless of what the production is about content-wise – international producers will realise Malaysia has so much more to offer,” says Kwok.

Those offerings include a stable economy and government, fast-developing infrastructure, English-speaking talent and stunning locations ranging from tropical beaches to modern cities. There’s still work to be done – in addition to incentives, the country needs tostreamline its approval process for international shoots and there still needs to be some upskilling of the local workforce. But both public and private forces are aware of this and are moving in the right direction.

“What we’re trying to get on the agenda is building a true industry by bringing in international production,” explains Lake. “It won’t happen overnight but the government is aware that it’s in for the long haul.”