Despite a lack of tax incentives, an ambitious new studio and financial support from the Polish Film Institute is making the territory an attractive prospect for international film-makers. Theodore Schwinke reports.

The Polish Film Institute recently unveiled plans to build Film City, a 10-stage studio near Warsaw. When completed in 2009, the full-service complex will rival Barrandov, Korda and Shepperton studios in scale.

Construction costs are tagged at $133m, of which $20m will come from the Polish state treasury. Warsaw wants the rest to come from EU structural funds. Final details will be released at the end of the year.

The announcement has given local producers reason to lobby their government to create tax incentives, like those offered in Hungary, to help attract international productions.

Director Krzysztof Krauze, whose gritty social drama Savior's Square won several Polish Film Awards last year, calls the lack of incentives 'economic nonsense'.

He stresses that 'without favourable taxes for foreign producers, there will only be stray dogs trotting around the village'.

The main attraction for footloose productions coming to Poland in the last two years has been the support of the Polish Film Institute, set up in 2005, which administers a $33.6m annual fund for local and international co-productions.

Last year, the institute announced $4.1m in funding for six features including Ken Loach's It's A Free World. It has previously supported such international co-productions as Hanna AW Slak's family film Teah and Peter Greenaway's Rembrandt biopic Nightwatching.

Greenaway's long-time producer Kees Kassander says the decision to shoot in Poland was a matter of financing. Between the Polish Film Institute and Polish investor Gremi Films, the Polish side put up $1.6m of the $6m film.

With the exception of some location work in Wales, Nightwatching shot completely on stages at the Wroclaw Feature Film Company. 'It was a very old studio, but very useable for us,' Kassander says. 'It was a fantastic place to shoot.'

He was happy with the services the production received, but says Poland was not a cheap location: 'If you compare it with England, (the savings) would be maybe 30%. If you compare it to Holland, it would be 10%.'