5 Key Eastern European Regions Luring Budget-Conscious Global Producers

10:30 PM 2/9/2019

by Vladimir Kozlov and Nick Holdsworth

Throughout the area, local film commissions have introduced a host of attractive rebates and incentives to entice Hollywood to take advantage of some of the best filmmaking infrastructure in the world.

Daniel Gray-Barnett

Central and Eastern Europe are making an offer Hollywood can’t refuse.

Fiercely competitive for the Hollywood dollar and international production coin, many of the region’s key players have upped their offer on tax incentives or adopted new, better schemes in the past year.

In 2018, Poland, the only major Central European country without a film tax incentive scheme, introduced a 30 percent cash rebate for film productions effective as of 2019. Romania followed suit, unveiling a cash-back incentive of up to 45 percent.

The Czech Republic is mulling increasing its incentive from 20 percent to 25 percent. Meanwhile, Hungary raised its tax rebate to 30 percent in 2018, as did Lithuania.

“What makes the entire region of Central/Eastern Europe attractive is competitive prices, versatile locations, exquisite talents, skills and the abilities of hard-working, experienced, English-speaking crews that are experienced in cooperation with foreign partners,” says Radoslaw Smigulski, general director of the Polish Film Institute.

But it’s not just the array of rebates, incentives and co-production schemes that lure budget-conscious global film producers to the region. Eastern Europe also boasts well-developed infrastructure and an abundance of qualified film professionals.

“Incentives are important but so is quality and infrastructure,” says Pavlina Zipkova, the Czech Republic’s film commissioner. “We have a great crew base, diverse and universal locations and wonderful facilities.”

Here’s a look at how international producers tapped everything that Eastern Europe has to offer in five key regions.

  • Czech Republic

    'Whiskey Cavalier'
    'Whiskey Cavalier'
    Courtesy of ABC

    Incentives 

    Popular with Hollywood and international producers since the mid-1990s, the Czech Republic’s neo-classical capital Prague remains an attractive destination for foreign shoots. Its heyday was in the early 2000s, when Tom Cruise shot Mission: Impossible at the historic Barrandov Studios and Vin Diesel made xXx at Prague Studios. However, a sharp increase in the value of local currency against the U.S. dollar and the introduction of attractive tax incentive schemes in neighboring countries took the wind out of its sails, leaving the local production services industry struggling for some years as producers lobbied against political resistance for public funding to level the playing field. Cash rebates were eventually introduced, and plans to increase their value from 20 percent to 25 percent are set to bring the Czech Republic back as a key regional player. Under the existing scheme, administrated by the Czech Film Fund, a 20 percent cash rebate is offered on qualifying Czech spend and up to a 10 percent cash rebate on qualifying international spend. Major renovations were carried out in 2018 at Prague Studio — a key competitor for Barrandov — where two new, purpose-built soundstages opened in April (it now has a total of six) to join a photo and content studio housed in the facility’s former renovated aircraft hangars. The upgrade brings the total studio space to more than 107,000 square feet, enabling it to offer full services for the kind of big international TV series that are returning to Prague. Productions currently shooting in the Czech Republic include Whiskey Cavalier, an American action series starring Scandal’s Scott Foley and Lauren Cohan of The Walking Dead. Says producer Robert Bernacchi: “The thing that probably most impresses me about Whiskey Cavalier is the quality of our local crew at a time when there are several other significant productions in town, which shows me the depth of crew that is available locally.”

    Talent to watch: Jan Pavlacky

    A veteran commercial director, Pavlacky also has experience with local TV series and music videos, as well as short films, including the 22-minute-long Bka 49-77, which earned him the best script award at the UK Film Festival in 2013. He is a go-to director for numerous Czech production companies, including Milk & Honey and atSwim TV. It is this reputation that brought him to the attention of Netflix, which tapped Pavlacky to direct the streaming giant’s new horror series Haunted. Says Pavlacky: “I come mainly from TV commercials, an environment which gave me a great deal of experience in working in different parts of the world with international crews. This background helps me to work in all sorts of genres and styles.”

  • Hungary

    The latest installment of 'The Terminator' franchise recently shot in Budapest.
    The latest installment of 'The Terminator' franchise recently shot in Budapest.
    Twitter/Paramount Pics

    Incentives

    As Hungarian film commissioner and head of the Hungarian National Film Fund, Andrew G. Vajna, who died Jan. 20, also was involved in helping promote the latest as-yet-untitled Terminator movie, which recently shot in Hungary. Just a few days before his death, Vajna, who produced Terminator 3 and Terminator Salvation, appeared alongside the franchise’s star, Arnold Schwarzenegger, in a promotional video released by the film fund. “Budapest is one of the nicest cities in the world,” said Schwarzenegger. “I’ve already had experience shooting here in the late ’80s. It was a fantastic place to shoot then, but it’s improved and there are more studios available, more technology available. Coming and working here was the wisest decision.” As of July 2018, Hungary’s tax rebate went up to 30 percent from 25 percent and the Hungarian film support scheme was extended until Dec. 31, 2024. Hungarian film funding, including the incentive program, was set up to replace an earlier structure in 2011 under the directorship of Vajna. “Andy was a true professional whose competence, devotion and hard work led the Hungarian industry out of a deep crisis eight years ago,” says Agnes Havas, CEO of the Hungarian National Film Fund. “The application system for full-length Hungarian productions and co-productions — feature films, documentary features and animated features — is continuous, applications are administered by the Hungarian National Film Fund. What Andy Vajna built stands on solid ground.” Hungary is also known for its facilities, such as Origo Studios, the largest in Hungary (with 195,000 square feet), and Korda Studios, built just outside of town, as well as the modernized 101-year-old state Mafilm Studios, which boasts the second-largest water tank in Europe.

    Talent to watch: Alexandra Borbely

    Borbely, 32, graduated from the Academy of Performing Arts in Bratislava, later studying acting at Budapest’s University of Theatre and Film Arts, where she graduated in 2012. Currently, she works at the Jozsef Katona Theater in Budapest. Her career took off in 2017 after she won the European Actress Award at the European Film Awards for her performance in the 2017 drama On Body and Soul, which won the Golden Bear in Berlin and went on to become Hungary’s official submission in the foreign-language Oscar category. Borbely will next be seen as the lead in Cecilia Felmeri’s Hungarian-Romanian co-production Spiral (currently shooting) and in Julius Sevcik’s Czech-Slovak co-production of The Glass Room (now in postproduction), an adaptation of Simon Mawer’s novel, a finalist for the Man Booker Prize, starring alongside Carice van Houten (Game of Thrones), Hanna Alstrom (Kingsman: The Secret Service) and Claes Bang (The Square).

  • Lithuania

    Giedre Burokaite
    Giedre Burokaite
    Pascal Le Segretain/Getty Images

    Incentives

    Lithuania recently increased its production tax incentive from 20 percent to 30 percent. The updated incentive, called Challenge Accepted, is available for feature films, TV films, documentaries and animation. At least four-fifths of eligible film production costs must be incurred in Lithuania and the total amount of eligible spend in Lithuania must be at least $50,000. There is no maximum spend on the incentive, which has been extended until the end of 2023. Lithuania’s film profile has been rising in recent years, with high-profile, big-budget dramas, such as the BBC’s War and Peace and Netflix’s Tokyo Trial setting up shop in the country. From 2014 to 2018, Lithuania received $27.8 million worth of investment from foreign film producers. A total of 68 filmmakers made use of the tax incentive, and 23 international movies benefited from the scheme. 2018 was the most successful for the local industry in this regard, with eight big-budget foreign films shot in Lithuania, including the U.S.-U.K. five-episode historical drama miniseries Chernobyl, one of the biggest foreign-film productions shot in Lithuania ever. The series shot 65 days in Lithuania out of a total of 74, using 23 locations in the country including Vilnius and Kaunas.

    Talent to watch: Giedre Burokaite

    In 2015, Burokaite, 34, set up a nonprofit film production platform called Meno Avilys, which specializes in film education and film preservation. The aim was to promote the Lithuanian film industry and to cooperate with young filmmakers. In addition to producing a number of local shorts, Burokaite recently celebrated the world premiere of her first full-length documentary, Animus Animalis, at Germany’s prestigious DOK Leipzig, the world’s oldest documentary film festival.

  • Poland

    'Mr. Jones'
    'Mr. Jones'
    Courtesy of Berlinale

    Incentives

    Until 2018, Poland remained the only major Central European country without a tax incentive scheme. In 2018 it caught up with its neighbors after the official approval of a new 30 percent production cash rebate. Partial production cost reimbursements or the full 30 percent cash rebate, administered by the Polish Film Institute, will be available starting Feb. 11 to producers of feature films, animations, documentaries and TV series. “Poland can accommodate productions with higher budgets than countries like Lithuania or Estonia due to a more generous annual budget, and we offer 10 percent higher cash rebate than, for example, the Czech Republic,” says the Polish Film Institute’s Radoslaw Smigulski. “In these highly competitive times, it’s not only money that matters,” he adds. “Polish cinematographic strength and self-confidence derive from a great production potential and rich heritage. I am sure that Polish producers and service providers will live up to the expectations of foreign partners.” Major international productions recently filmed in Poland include the first Polish Netflix series, 1983, directed by four female directors — Agnieszka Holland, Kasia Adamik, Agnieszka Smoczynska and Olga Chajdasand. Holland also recently shot the historical drama Mr. Jones — a Poland-U.K.-Ukraine co-production about the Great Famine in Ukraine in the 1930s — in multiple Polish locations, including Silesia, Malopolska and Krakow, where the city’s streets stood in for Moscow.

    Talent to watch: Aleksandra Terpinska

    Terpinska, who won a Canal+ award and Golden Rail for her short The Best Fireworks Ever at Cannes’ Critics’ Week in 2017, is now working on her debut feature, Other People, which was developed at France’s Les Arcs Co-Production Village in 2018. The film, which is currently casting and will go into production later this year, is based on a book by acclaimed Polish novelist Dorota Maslowska. Terpinska's previous short films have been screened at more than 250 festivals, including San Sebastian, Camerimage and Clermont Ferrand, winning a total of over 40 awards. The 35-year-old Terpinska graduated from the Krzysztof Kieslowski Faculty of Radio and Television University of Silesia in Katowice and also has a degree in psychology from Wroclaw University.

  • Romania

    'The Nun'
    'The Nun'
    Cos Aelenei/Warner Bros.

    Incentives

    Romania’s scheme, launched in October, offers a 35 percent cash rebate on qualified expenditures for international productions shooting in Romania and also for domestic productions. Additionally, productions explicitly promoting Romania, with a minimum local spend of 20 percent of the total budget of the production, can also apply for a rebate of 10 percent, making Romania’s incentives Eastern Europe’s most generous, with as much as 45 percent of a film’s budget available for qualifying international productions. The new incentives are backed by an annual $57 million available to spend on a first-come, first-served basis until 2020. Romania’s varied and accessible locations — with mountains or seaside easily reachable within a three-hour drive from Bucharest — as well as urban and rural settings that offer both ancient and modern locales, have made it a magnet for international productions in recent years, including The Nun, 2018’s horror blockbuster from New Line that has grossed more than $360 million globally. With plenty of well-equipped rental houses for state-of-the-art equipment and professional studio facilities that include Castel, Buftea and Studioset, Romania’s key advantage is its low cost — estimated to be as much as 40 percent cheaper than the Czech Republic. Crews and casts are flexible and there are no additional charges for weekends, public holidays or overnight shoots, industry insiders say. As a member of the EU, Romania offers political stability and a secure environment for international productions. The Bucharest-based Studioset facility opened in 2007 as a postproduction house and rapidly expanded to offer a wide range of services for the film, advertising and new media industries. Now it is actively involved in producing. “In recent years we have made successful film co-productions with France and Germany, and we are currently in negotiations with our first partners from the U.S. market,” says Studioset CEO Sorin Baican. The studio is currently co-producing its first franchise, Government of Children, a trans-media project that combines stereoscopic film, VR and a web series, directed by Ioana Mischie. The studio is also preparing to go into production on My Father’s Shoes, a stop-motion animation feature directed by Anton Groves, which is supported by the Romanian National Center of Cinema in co-production with Germany.

    Talent to watch: Ana Ularu

    A former European Film Promotion Shooting Star, Ularu, 33, began acting at the age of 9. Since graduating with a BA and MFA in acting from Bucharest’s National University of Theatre and Film, she has appeared in more than 40 feature films, short films, TV films and TV series. In 2010, she received the Swiss critics award in Locarno and the best actress award at the Thessaloniki Film Festival for her role in the Romanian action title Outbound. In addition to appearing in Showtime’s Borgias and acting alongside Keanu Reeves in the 2018 thriller Siberia, her most high-profile Hollywood role to date was in NBC’s fantasy series Emerald City. “It was an altogether wonderful journey that I am constantly and vocally grateful about,” she says of her experience working on the show.

    This story first appeared in The Hollywood Reporter's Feb. 10 daily issue at the Berlin Film Festival.