Finance - Film

The Large Budget Screen Production Grant Scheme

Anyone filming a large budget production in New Zealand may be eligible for assistance under the Large Budget Screen Production Grant Scheme.

For full details on this scheme please visit the Large Budget Screen Production Grant Scheme page of this website.

Screen Production Incentive Fund

The Screen Production Incentive Fund provides a grant to eligible New Zealand feature film, television and other format screen productions deemed to have significant New Zealand content.

For full details on this scheme please visit the Screen Production Incentive Fund page of this website.

Co-Production Agreements

For both financial and creative reasons, an increasing number of feature film projects worldwide are being developed as international co-productions.

The New Zealand Film Commission supports this trend, acknowledging that an official co-production structure sometimes may be the only way for a producer to realise a project.

If a co-production is appropriately structured, it will be eligible for certification as a New Zealand film. Furthermore, it may be able to attract production funding from the New Zealand Film Commission.

New Zealand has entered into a number of bilateral co-production agreements. As at 9 July 2010, agreements have been signed with Australia, Canada, France, United Kingdom, Italy, Singapore, Germany, Ireland, Spain, the Republic of Korea and the People's Republic of China.

The co-production agreements state that co-productions made under the terms of the agreement (and certified as such by the New Zealand Film Commission) will be entitled to all the benefits accorded to national productions in New Zealand. This includes the ability to access New Zealand Film Commission funding, and to receive the benefits of any tax incentives.

There are two types of co-production - official and unofficial.

Official

An official co-production is subject to the various government to government treaties that exist. New Zealand currently has treaties with Australia, Canada, France, United Kingdom, Italy, Singapore, Germany, Ireland, Spain, the Republic of Korea and the People's Republic of China. You can download copies of these treaties from the New Zealand Film Commission website. The regulatory authority is the New Zealand Film Commission.

The minimum participation is 20/80 or 30/70 funding/creative split in an official co-production. It is extremely unlikely to find funding within New Zealand under the treaty for a project that did not have either a New Zealand director or writer or is totally led from overseas.

For an official co-production it would be necessary to find a production partner within New Zealand who has experience working with overseas producers.

New Zealand on Air and New Zealand Film Commission funding is from government and forms the majority of New Zealand production funds. Television networks pay very little for license rights in New Zealand and there is limited private investment available.

Unofficial

Non New Zealand producers are unlikely to secure funding in this region for a production originated elsewhere. However, producers who want only to utilize crew and/or locations should contact a local production company with experience working with international producers or partners.

Establishing a Co-Production Agreement

Important points to keep in mind when setting up a co-production:

• There must be a producer from each country. The two producers must sign a Co-Producers' Agreement.
• Minimum participation requirements are not specified in all treaties. For practical purposes, twenty percent is considered a threshold level.
• New Zealand does not operate a formal points system when calculating key creative positions. It will generally expect as a minimum that either the writer or the director be a New Zealander, and that a New Zealand actor be chosen for one of the major roles.
• Third-country nationals are usually permitted only in performer roles.
• The creative and financial percentages should equate. This means that if 50% of the production budget is to be spent within New Zealand, then 50% of the key creative positions and overall crew will also need to be New Zealanders.
• An overall balance of creative and financial elements is required over a period of time in all of the co-production treaties involving New Zealand.
• Approval will not be notified to the producer until both the New Zealand Film Commission and the foreign competent authority have consulted together and approved the production as eligible. The country with the majority participation will usually decide first.
• There are two stages of approval: provisional and final certification. Provisional is the key stage, as this involves consultation with the competent authority in the other country. Under the New Zealand Film Commission rules, approval is given by the Certification Committee.
• The obtaining of provisional approval will allow the New Zealand producer to access New Zealand Film Commission production financing and may enable private New Zealand investors to obtain tax benefits under the Income Tax Act, provided final approval is obtained once the film is completed.

The New Zealand Film Commission's Role in Co-Productions

The New Zealand Film Commission is authorised to provide both provisional and final approval as an official co-production for film and television projects, provided the project meets the required eligibility criteria.

Funding Criteria

In addition to all the usual policy requirements, the following apply when the New Zealand Film Commission is asked to finance a co-production:

• The Film Commission will only provide funds to meet the costs of the New Zealand elements including crew, cast, facilities and materials, contingency, insurance, completion guarantee (pro rata share) and financial and legal costs if incurred in New Zealand.
• The Film Commission will not subordinate its recoupment to a foreign equity investor. Film Commission policy is that all equity investors should recoup pro rata pari passu.
• The Film Commission will expect a market attachment to the project, preferably in the form of a sales advance or distribution guarantee.
• The New Zealand producer must apply to the Film Commission for the project to be approved as an official co-production. A standard application form is available from the Film Commission.

Financing New Zealand Productions

A high percentage of New Zealand-produced feature films and television programmes are made with the help of government funding.

In the case of feature films, government funding is made available through the New Zealand Film Commission.

With a total annual investment budget of around NZ$8 million, the New Zealand Film Commission generally allocates funding across a maximum of five feature films in any one year. These films usually fall within a budget range of NZ$1 million to NZ$5 million.

The Role of the New Zealand Film Commission

The Film Commission is restricted in the application of its funding by the terms of its implementing legislation which require that funding be made available only to films containing significant New Zealand content. The Film Commission will therefore only accept funding applications from New Zealand producers.

The Film Commission is authorised to provide both provisional and final approval as an official co-production for film and television projects, provided the project meets the required eligibility criteria.

Further information is available on the New Zealand Film Commission website.

Funding Criteria

Before a feature film production is eligible to receive funding from the Film Commission, it must first qualify as a New Zealand Film. It will do so if it is assessed by the Film Commission as containing significant New Zealand content as set out in Section 18 of the New Zealand Film Commission Act 1978.

The Certification Process

Private investors in New Zealand films may wish to take advantage of special tax incentives available in the Income Tax Act 1994.

To qualify for these tax incentives the film in question must first be certified as a New Zealand Film. The Film Commission is authorised to certify a film or television programme as a New Zealand Film provided it contains significant New Zealand content as set out in Section 18 of the New Zealand Film Commission Act 1978. Certification allows a film to qualify for a one-year tax write-off in the year in which the film reaches double-head fine-cut under the New Zealand Income Tax Act.

Certification will generally be given in two stages:

Stage 1 - Provisional Certificate

• A provisional certificate may be issued by the Film Commission upon review of a proposed film project.
• This provisional certification is intended to enable investors to commit funds with the knowledge that the film will qualify for a one-year write-off if produced according to the proposal certified by the Film Commission.
• The provisional certificate is valid for 12 months, then it will lapse. If requested in writing, the certificate may be extended for a further period.

Stage 2 - Final Certificate

• A final certificate will be issued once the film is completed and the producer has demonstrated that the criteria have been fulfilled.

Application for Certification

You can download application packs for provisional and final certification from the New Zealand Film Commission website. Where the Film Commission issues either a provisional or final certificate, it is required to send a copy to the Commissioner of Inland Revenue.

Further information is available on the New Zealand Film Commission's website.