CARIFORUM-EU Business Forum
Film & Audiovisual Discussion Paper
November 2008 2008 EU-Cariforum Business Forum
CARIFORUM-EU Business Forum November 24-25, 2008
Discussion Paper Film and Audiovisual
Background The 14 countries of the Caribbean ACP (CARIFORUM) and the 27 members of the European Union signed on October 15th, 2008 an Economic Partnership Agreement (EPA), the first intraregional agreement of its kind in the world. This Agreement will redefine the trade and investment relationship of goods and services between the two regions.
As there was already duty free access for 98% of goods from CARIFORUM countries, the novelty on market access is in services. Priority sectors were determined within the Agreement:
Business services
Computer and computer related services
Research and Development
Environmental services
Management consultancy
Maritime Transport
Entertainment
Tourism
The signature of the Agreement, although a milestone, it is just the first step towards improving trade relationship. Specific implementation issues now have to be discussed for each sector, business opportunities have to be identified and actual business has to take place.
In April and September of 2008, different teams of institutions and business from across the CARIFORUM countries visited several countries and met their counterpart in Brussels, Madrid and London in particular. The need for strong interlink between the private sector of both Europe and the Caribbean was important and the need for the establishment of the CARIFORUM-EU Business Forum was clearly stated. Three priority areas where there are mutual interest and important potential for growth were identified to be the lead sectors for the first meeting of the Forum: ICT, Creative Industries as it relates to film & audiovisual and architecture & interior decoration.
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Regarding the Film and audiovisual sector, the incentives and sector situation change depending on the country. Jamaica and Trinidad and Tobago have incentive laws to attract local and foreign investors in the film and audiovisual industry. Dominican Republic and Barbados have drafter laws that are now awaiting Congressional / Parliamentary approval. Other countries have the records of offering special deals for famous features to be filmed in their lands. The general theme is that countries recognize the importance and potential of this industry. UK and Jamaica have a co-production agreement.
The Jamaican Government also offers incentives for investment in the film industry in Jamaica. Among the incentives listed by Jamaica Trade and Invest are:
Duty free importation of musicians’ tools of trade
Tax-free profits from overseas film and video releases for nine years
Duty-free and tax free concessions on equipment, machinery and materials for the building of film studios and support facilities
An investment allowance of 70% of sums spent on investment in infrastructure, with a carry forward of the unused portion
No withholding tax on dividends paid to resident shareholders with investments in film companies. Non-resident shareholders earn dividends taxed according to the provisions of the Double Taxation Treaty with their respective countries: for example, the USA and UK are treaty members (thus eliminating the payment of taxes in Jamaica).
General Consumption Tax (GCT) rebates of 16.5% for films on all goods and services purchased in Jamaica determined on a project by project basis.
There are also co-production agreements with UK and Canada.
The Trinidad and Tobago Film Company, established by the Government of Trinidad and Tobago has recently introduced a rebate program to attract International producers to Trinidad & Tobago.
This incentive, the Production Expenditure Rebate Program, provides cash rebates up to 30% for expenditures accrued while filming in the twin island states. Some of the areas applicable for the rebate are: rental of local equipment, suppliers and services, location fees, accommodation and food, wardrobe, props and related items, employment of local cast and crew, local travel and transportation costs.
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The Dominican Republic has a new law for incentive of cinematography. The law among other things:
Establish a fund, FONPROCINE which will be formed by all the taxes collected on the industry such as payment for entrance tickets, fines, etc. This fund will undertake training and promotional activities on behalf of the film industry in Dominican Republic, assist in production, offer financing through financial institutions, preserve cinematography assets of the country, legal actions against copyright infringements, among others.
There are also incentives for companies using Dominican Republic as a location with an exemption of all taxes, special facilities in customs as well as a reimbursement of 100% of the VAT prior departing DR. There is also incentive of no income revenue tax for a period of 15 years for movie theatres and production facilities. These companies will also be exempt of import duties on their first equipments. The law also establishes a system for the registration and information on films in the DR.
Barbados has the Film Group as well as a recently formed Barbados Film and Video Association on Thursday July 3, 2008. Barbados priority is not film location, but promoting production. It has already a good audiovisual market.
The next logical step in the business facilitation after the EPA signature:
Co-Production Agreements: EPA establishes the framework for co-production agreement to be negotiated either bilateral or one EU country with the entire CARIFORUM region.
There are other issues as:
The double taxation treaties
How the facilitation of movement of people in this sector in the EU markets is going to take place.
Certain EU countries offer extraordinary incentives to their film industries. Is there an opportunity for Caribbean firms to tap into this wealth of opportunities? What would be the ideal mechanisms for it?
Although there has been movies filmed in the Caribbean from a long time ago, the local movie making industries is still recent. However, a critical mass of film makers, crew, actors, etc is being developed. How can the region tap into the national, regional and international opportunities?
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The sector is still very poorly organized, with very few institutions throughout the region. Pooling resources from across the region to form a critical mass for negotiations of co-production agreements is the idea currently being discussed. There are examples of very good organizations across Europe with the Spanish EGEDA and FAPAE being two looked at example of organization and public private sector partnership which has boosted the movie industry in Spain. The Mutual Guarantee Fund established by EGEDA is an excellent example how the industry, the government and the financial institutions can come together to find creative alternatives to support the film industry.
What are the lessons learnt and how can the Caribbean organize itself and partner with key EU institutions for transferring of know how?
How can there be support for such initiatives?
How can both regions partner to deepen the relationship and allow for the parts to still be negotiated like co-production agreement to take place?
Discussion issues:
What institutional framework would work best for a Caribbean film industry? Is there need for a Caribbean Film Commission, should there be a Caribbean Producer Associations?
Which countries to begin negotiations for co-production agreement: France (including French Departments in the Caribbean), Spain, expanding UK-Jamaica Agreement to include all CARIFORUM countries?
What would the Caribbean countries need to put in place to negotiate co-production agreement?
Importance of double taxation treaties and how can they impact on the industry? Should this part of a broader EPA implementation mandate?
Issues of financing and organizations of regional institution/s.
Incentives laws, what is most effective to attract foreign companies and joint partnership?
Initial findings of the visit to Brussels and Madrid indicate there are opportunities for co-production for feature films, advertising films and others. Complete legal framework such as co-production agreement, double taxation treaties and incentives laws as well as availability of the human resources and equipment are the key issues to be further discussed.
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Discussion issues:
How the industry representatives are going to organize themselves to interact better with their government and EU counterpart?
How to pool together regional resources to establish a critical mass for co-production?
Which mechanism to us to have ready available information on the industry and on individual companies? Would it make sense to have one stop shop?
How to target EU markets? How to mount promotion of Caribbean films?
Which are the most important market for film and how to target them?
What business arrangements producers and other industry workers need to have in place to be able to tap into opportunities?
How to lobby for the implementation mechanism needed to support the industry?
Possible work plan for the industry including actions on: Policy and enabling environment, Institutional support, Business Development Support, Marketing
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