By Patrick Frater
Malaysia is to begin offering financial incentives to local and foreign films that shoot in the country, the government has announced.
Films will be able to claim a rebate of up to 30% of the cost of production, conditional upon the production of receipts and the claim being audited.
The move was an initiative of Prime Minister Najib Tun Razak and was approved last week by the national Economic Advisory Council.
Films eligible for the rebate include all local Malaysian films with a budget exceeding RM2.5 million ($817,000) and foreign films with a budget bigger than RM5 million ($1.63 million).
“The move is to encourage the filming of international movies in Malaysia and the growth of the local movie industry,” said culture minister Dr Rais Yatim.
The move also came at the behest of the National Film Development Corporation of Malaysia (FINAS) Perbadana Kemajuan Filem Nasional Malaysia as part of its Transformation of the Film Industry programme. Anmand followed a feasibility study that was completed only five months ago in October last year.
Location-based incentives were presented by FINAS as an urgent accompaniment to the new Pinewood Iskandar Malaysia Studios sound stages which are now being built in the south of the country. They are a joint venture between the UK’s Pinewood Studios and Khazanah Nasional, a Malaysian state-owned investment fund.
The rebate scheme is seen as making Malaysia, and the studios in particular, a more attractive location for international films. Some of these have the ability to go ‘subsidy shopping’ and look for the best combination of convenience, cost and incentives.
Malaysia is also now preparing its first co-production treaty with its neighbour Singapore, though the proposed incentives do not require a film to be a Malaysian co-production in order to qualify.
The 30% rebate and the low spending threshold compare favourably with the similar schemes in Australia, which offer 40% “producer offset” (but only on films that pass an Australian content test) or a 20% “location offset” (but only on films with budgets higher than $15 million. Malaysian films have budgets that average RM1.44 million ($470,000).
The ministry also announced other measures to help film. It said that it would sponsor a new content market the Kuala Lumpur Communications and Content Industry Market, which could take place from September this year. It also confirmed that RM120 million ($39.2 million) will be provided as grants for the local Malaysian creative industries, specifically film production, documentaries animation and digital video.