The future of a Cyprus film incentive scheme to attract producers from Hollywood and other bigtime productions looks blurry as its 2020 budget was shackled by MPs.
After a heated discussion among MPs, parliament gave the green light for the Euros 8.5 mln reimbursement to the producers of a Hollywood movie filmed entirely in Cyprus, but the incentive scheme’s budget remains tied up.
Jiu-Jitsu’s reimbursement was approved at the last minute in the final House plenary for the year.
Jiu-Jitsu, starring Oscar-winning actor Nicolas Cage is the first international movie shot in Cyprus attracted by an audio-visual incentive scheme promoted by the government.
It was considered to be a make or break test case for Cyprus’ attempt to put itself on the global filming map.
Stakeholders say that Hollywood is keeping a close eye the situation, waiting to see how the scheme will work in practice. Insiders are concerned that producers of big-budget films may feel unease with the House decision to withhold the scheme’s 25 mln budget.
The incentive plan is managed by Invest Cyprus and aims to establish a film industry on the island dubbed as Olivewood.
According to the scheme, the government has provided a total of Euros 25 mln for the ventures it might fund annually for the promotion of the film industry.
The scheme provides Cypriot and foreign producers with incentives such as cash rebates and/or tax credits of up to 35% on qualifying production expenditures and also provides tax allowances of 20% for investment in infrastructure and equipment.
AKEL MPs and the Greens had voted against the release of the Euros 8.5 mln refund Jiu-Jitsu claimed from the state, the money was approved by a majority of ruling DISY, DIKO and EDEK MPs.
The film wrapped up in August with producers filing their paperwork.
Invest Cyprus chairman Michalis Michael told Politis radio a week before the film was reimbursed on December 9, no action had been taken since then.
Except for ruling DISY, MPs voted to put the 2020 budget for the film scheme on ice, earmarking it for crosschecks when the Finance Ministry puts in a request for the release of funds.
AKEL and the Greens expressed concern the scheme might lead to a waste of public funds.
We have serious doubts about the social return from this film (Jiu-Jitsu) for the benefit of Cyprus and highlighting the Republic of Cyprus as a destination for tourism or other investments, AKEL MP Aristos Damianou said.
A source from the local audio-visual industry told the Financial Mirror that Hollywood and other ‘big time’ producers are keeping a close eye on how the scheme rolls out and are concerned over possible complications.
Sci-fi film Jiu Jitsu marks the launch of Cyprus’ film industry aka Olivewood, however, the future of the project depends as much on the success of the film itself as does Cyprus keeping to promises made through the Film Incentive Scheme, the source said.
The source said if officials pull it off, without any complications, then certainly Cyprus is really set for stardom.
Major studios are a bit concerned over whether the incentive scheme will be successful as mistrust is building over whether Cyprus will keep its end of the bargain.
Chris Economides, a board member of LBE JIU-JITSU AVC Ltd, set up in Cyprus by the producers of the film, argued that the scheme and the future of ‘Olivewood’ are at risk as MPs handcuffed the budget for the incentive scheme.
I feel that MPs have not been informed properly on what the scheme can offer the country’s economy, and thus they may quite rightly feel that taxpayers’ money is being thrown down the drain, said Economides.
He argued that the company spent Euros 2 mln on accommodation and travel on the island with a total of 8,300 overnight stays in the capital’s hotels.
He noted that the production of a film has one of the highest economic multiplier factors, as many sectors of the economy benefit, from lawyers and accountants to taxi drivers, restaurants and bars.
It is important to note the producers of Jiu-Jitsu kept their side of the bargain, complying with criteria which included the hiring of people active in the local audio-visual industry.
The production hired more than 60 people active in the local industry, from actors to screenwriters and costume makers.
Appearing confident over what the scheme has to offer Cyprus and its economy, Economides said it must work as it will be a game-changer not only for Cyprus’ film industry but also for the island’s economy.
Development of the film industry gives rise to new investment opportunities such as the building of infrastructures like studios, exhibition and conference centres, media distribution centres, editing and sound suites, production services equipment, and many other opportunities.
He noted that countries like Romania and Hungary have reshaped their economy entirely by attracting big investments for their film industry.
The Jiu-Jitsu producer feels that both his production and the industry, in general, has not been given the appropriate attention by stakeholders.
As producers of the film, we had to finance the film with funds from abroad as Cyprus banks were not willing to finance the film, an indication they felt they may not get their money back.
Economides also wanted to respond to reports claiming the company was waiting for the reimbursement to pay people who worked for the production. He said all participants have been paid for their contribution to the film.
A golden scheme
The company itself, and the scheme are subject to audit by an independent auditor registered in Cyprus, while the Finance Ministry has also hired an agency from abroad to perform audits.
We should be talking about a golden scheme, but if we continue treating the people and the industry in this way, then the future of ‘Olivewood’ is looking rather grim, said Economides.
Earlier this year, Jiu-Jitsu’s renowned director Dimitri Logothetis told reporters that he has already got the green light for his next movie to be filmed in Cyprus titled Man of War.
However, Logothetis and the rest of the production team which includes Martin Barab and Cypriot film industry consultant Chris Economides, all struck a note of caution.
I have six more movies behind this one, citing stars like Gerard Butler, Bruce Willis and Keanu Reeves. These are $50 million movies, said Logothetis.
He said none of these films would be coming to Cyprus until the government honours the certificate that induced us to come here with Jiu-Jitsu.
Rumours in the local industry have it that a major production is set to begin in January 2020.
According to reports, there is also interest from Bollywood. Jiu Jitsu’s premiere will be in February and screened in cinemas in March. The film shot exclusively in Cyprus will be distributed to 40 countries.
Invest Cyprus was contacted to give their take on whether the House decision on the film’s budget could raise a few eyebrows amongst producers but declined to comment because of its political dimension.
Source: The Financial Mirror