A question came up on a recent Twitter thread from a writer about international co-productions, and whether they are generally good or bad experiences and what a filmmaker should know about them.
It’s always great to see writers and other filmmakers take an interest from an early stage in how content gets financed and the opportunities that might be available to them. Thinking about locations and the potential benefits that they bring is a big part of this. The best writers and reps understand this process, and use this knowledge to deliver the kinds of material that investors and producers want.
Let’s take a look at this topic in a bit more detail…
Tax Incentives
Any discussion of international co-productions requires a basic understanding of tax incentives, how they work, and what a person or production must do to qualify for them and meet any minimum requirements that a specific program may have.
At its core, an international co-production represents an agreement that enables a production to enjoy the benefits of the tax incentives of two countries rather than just one.
Qualifying for any tax incentive program requires an understanding of how it works and the criteria that you must fulfill. This changes for every country, region, state, or jurisdiction. Some incentive programs require a minimum budget, others a minimum local spend, others still a minimum number of days shot in their region, and much more.
Ensuring that you qualify for your tax incentive program - or programs (plural) if you are mounting an international co-production - is the first step in ensuring that this structure will actually work for your project.
If you’re not familiar with how tax incentives work, you can check out our book on the subject where all of these concepts are explained.
What Is An International Co-Production?
An international “co-pro” is when a production is officially based in more than one country. This is usually two countries, but it is not uncommon to see co-pro’s between three countries. I personally haven’t seen an official co-pro between four or more countries, but let me know if I’m missing any!
This requires an official co-production treaty to exist between those two (or more) countries. This treaty enables a production that meets its minimum requirements to access the appropriate amount of public funds (or “soft money”) available in both countries, which can be a huge boost to its finance plan and cover a large chunk of its production budget.
This is significant because most tax incentive programs are specifically written to prevent a production from “double-dipping” into two incentive programs for the same shoot. An official international co-production allows you to do just that.
A co-pro is much more than a production simply shooting a few days of B-roll in a secondary location overseas. You can still do that, but that alone likely won’t qualify you as a co-pro or earn you the second set of incentives.
Rather, co-pro is an official structure that is at times complicated and cumbersome, but the rewards can be spectacular.
How Do International Co-Productions Work?
It’s difficult to talk about international co-productions with any degree of specificity because the rules can be so different depending on which countries are entering into the co-pro agreement.
This can be a confusing process. Because all tax incentive programs look different, most international co-pro treaties look very different as well.
So, just because one structure on one project has worked in the past does not mean it will work again for a different project in different countries. A UK-Spain co-production could look very different from a Canada-Belgium co-production, for example, depending on what each treaty requires.
Some projects lend themselves perfectly to a co-pro scenario, whether via a script that takes place in two primary overseas locations, or via a diverse team both in front of and behind the camera, consisting of actors and crew members from different countries or regions.
A co-pro doesn’t always have to be a 50/50 split either. It’s pretty common to see a majority/minority split between two countries, which is perfectly acceptable provided both sides are happy, you meet the minimum treaty requirements, and the benefits are still worth the additional work of getting the co-pro approved.
An example might be where a treaty allows you to mount your entire shoot in one country (likely about 80% of your budget) but then do the post-production in a different country for the remaining 20%. You may have to drop in some crew members and actors from that country too, but these are fairly manageable requirements for the rewards on offer.
But again, different countries put their emphasis on different qualifying factors. Some countries weigh their incentives heavily on whether a certain number of the key creatives (usually the writer, director, cast, and/or producer) originate from or reside there. Others focus far more on how much work is actually being done in that location, regardless of the nationality of its key team members.
You need to study both the local tax incentive programs of your shooting locations and their international co-production treaty very carefully to ensure that you can qualify for all the benefits on offer.
Who Has Treaties With Whom?
You shouldn’t automatically assume that any two countries will be a good fit. Not every country has a co-production treaty with every other country in the world.
That being said, most major countries do have some kind of agreement with one another. Sometimes, even when there isn’t an official co-production treaty, the two countries have figured out some very smart ways of working together that can still be hugely beneficial. Always check whether anyone else has done this before and ask what benefits are available.
And bear in mind that new treaties get signed all the time, as well as old ones getting re-negotiated. As with all tax incentive programs, this is a rapidly-changing scene, so make sure you stay up to date!
What About The US?
Before you get too excited, I’m going to bring you right back down to earth…
Unfortunately, and very significantly for many of the filmmakers reading this, the US does not to my knowledge have any international co-production treaties with any other countries in place at the time of writing, at least not on a very usable scale.
I had heard of discussions of an agreement with China, and I believe that Puerto Rico has a unique kind of workaround agreement with Spain, but even these are fairly narrow in scope and won’t help most US filmmakers.
Now, that doesn’t mean that you can’t still shoot in another country in addition to the US, or that your script can’t span as many different places as you choose. It just makes it much more difficult to access soft funding from more than one location, so you will have to account for that within your finance plan.
Again, this is a constantly-evolving scenario, particularly with a changing political climate. But many of these international co-pro treaties were designed specifically for these countries to join forces to break the US hegemony of the international production scene.
As such, most of these countries are focused on strengthening those relationships rather than including the US in its current co-production plans. This means that you probably won’t be seeing an official co-production between the US and any other country any time in the near future…
What does all this mean for you as a filmmaker? Well, don’t lose hope, because you still have plenty of options, as we shall explore in our next posts…
Ricky Margolis has more than 15 years' experience in the entertainment industry as a producer and financier of films and TV shows. To learn more about Tax Incentives and how they can help you to get your next project financed and produced, check out his book HOW THE HELL... Do I Get My Film Financed: Book One: TAX INCENTIVES. Still want to know more about film & TV financing and production? You can find the other books in this series by clicking here.
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