Taiwan has become the firstdestination in Asia for producers looking for tax-based financing.

LA and Taipei-based fund,Double Edge Entertainment, is working with the Taiwanese government to provideprivate equity and tax credits that can cover up to 50% of mid-budgetproductions that partially shoot in Taiwan.

Following a change inTaiwanese law, the government is offering tax breaks of up to 20% of the totalbudget of qualifying films. The only requirements are that one third of screentime must be filmed in Taiwan and Taiwanese actors make up one third of thecast.

The first two productions totake advantage of the tax credits are The Book Of The Dead, a horror film to be directed by George Huang (SwimmingWith Sharks), and drama 920Sacramento which is set to starAshley Judd.

A co-production with StaceySher and Michael Shamberg's Double Feature Films, 920 Sacramento is a biopic of Donaldina Cameron who was a whiteangel for hundreds of prostitutes in San Francisco's Chinatown in the 1890s.Both films have budgets of around $12m and will partially shoot in Taiwan.

"It's modelled on the German tax shelter in that it's a taxdeferral for investors - in this case corporations rather than individuals,"said Nina Yang who launched the fund with two other Taiwan-born Americans,Bobby Sheng and Alan Lee.

In addition, Double Edge hasan initial private equity fund of $25m supplied by its three Taiwan-basedshareholders - China Trust, Taishin International Bank and electronicsmanufacturer BenQ.

For films under $15m, DoubleEdge will consider becoming an equity investor for up to 30% of the budget,which combined with Taiwan's tax credit covers half the costs of production.For films over this limit, the fund will help producers access Taiwan's 20% taxcredit.

"We're looking for English-language productions that have anAsian element including cast and other talent," said Sheng. "We act like a fundin that we look for content to invest in, but we also offer production servicesand have our own in-house development team."