6 Eastern European Countries With Tax Incentives, Talent and Films Screening at Cannes

12:15 AM 5/12/2016

by Nick Holdsworth

Global producers looking to save money and tap experienced crews, versatile locales and cutting-edge facilities are heading to Eastern Europe.

Sieranevada 4 - H 2016
Courtesy of Cannes Film Festival

Cannes can be a quixotic venue for showcasing Eastern European films. Festival favorite Romania has two films in official selection this year — Cristian Mungiu’s Baccalareat (Graduation), about parents, their offspring and compromises, and Cristi Puiu’s Sieranevada, where a family gathers for a funeral of a patriarch — both in competition.

But outside the official lineup, for most countries from the region, the Croisette represents an opportunity to promote locations, tax incentives and emerging talent, rather than grace the red carpet at the Palais. Great locations, facilities and pricing continue to attract international producers to shoot both local and international projects across the region, and that is what national pavilions from Eastern Europe will have on offer at the market and the International Village behind the Palais. Here’s a look at five countries in Eastern Europe that are thriving thanks to strong incentives, versatile locales and a rich pool of local talent.

  • Czech Republic

    Case Study: Interlude in Prague
    With the help of tax incentives launched in ???2010 after many years of lobbying, the Czech Republic is regaining its role as one of Eastern Europe’s favored locations. Productions, such as the U.K.-Czech co-production Interlude in Prague, are capitalizing on versatile locales, excellent infrastructure and world-class studios and crews.

    Interlude in Prague, a fictionalized plot based around Mozart’s visit to Prague in 1787 and focusing on the creation of his opera Don Giovanni, is shooting on location in the city through mid-May. Produced by Huw Penallt Jones and Hannah Leader of Productive International with Prague’s Barrandov Studios-based production company Stillking Films, the ??30-day shoot includes top historical locations, such as the Baroque Theater situated within Cesky Krumlov Castle. The theater interiors double for Prague’s Nostic Theater, where Mozart conducted “Le nozze di Figaro” in January ???, the success of which lead to his Don Giovanni commission.

    The film, directed by John Stephenson, stars James Purefoy, Aneurin Barnard, Samantha Barks and Ade Edmundson. Says David Minkowski, co-producer for Stillking: “More and more producers are finding Prague’s not-so-secret advantage: In addition to the 20 percent rebate on local spend, there is a 10 percent uncapped rebate on all actors, directors and producers — no matter where they come from, which pushes rebate dollars even higher.”

    Under a system introduced in ???2010, cash rebates of 20? percent for qualifying Czech spend and 10?? percent for international spend are available for film and TV projects including all postproduction work. The scheme, which helped revitalize the local production industry after a period when it had faced fierce competition from other locations in Eastern Europe, has been beefed up from an original $?15 million a year to $??33 million a year, boosting the fund by 40 percent. In early April, Czech Prime Minister Bohuslav Sobotka flew to Los Angeles to talk to Hollywood studio execs about the benefits of shooting in the Czech Republic.

    Talent to Watch: Ondrej Hudecek
    Director Hudecek, 28, claims his “most valuable education … was watching reruns of South Park.” Hudecek’s short film Peacock, which received a Sundance special jury award for best direction, is now being developed into a feature called Bohemian Rhapsody. Set in 19??th-century Prague, the film tells the story of a Czech dramatist, whose desire for greatness collides with his nation’s die-hard backward thinking. The script is written by Hudecek and Jan Smutny, and produced by Tomas Hruby and Pavla Kubeckova of Nutprodukce, who also co-produced HBO’s Burning Bush, directed by Agnieszka Holland.

    In Cannes
    Two Czech minority co-productions are in the official line up: Oliver Assayas’ English-language competition entry Personal Shopper, starring Kristen Stewart as a psychic assistant to the stars, that used Prague locations; and Stephanie Di Giusto’s Isadora Duncan biopic, The Dancer. Czech company Sirena is co-producer on both films. Market screenings are planned for Petr Vaclav’s We Are Never Alone, via sales company Wide, and Steve Lichtag’s Aldabra: Once Upon an Island, via sales agent Vision Films.

  • Estonia

    Case Study: The Eternal Road
    The first film to benefit from Estonia’s newly launched tax incentive scheme — which offers producers a 30 percent rebate on eligible costs — is the Finland-Sweden-Estonia co-production The Eternal Road. Set during the dark days of Stalin’s Soviet Union of the ????1930s, the film is based on the true story of an epic struggle for survival. After fleeing the Great Depression in America, Finn Jussi Ketola (Tommi Korpela) finds growing political unrest at home, where he is abducted and forced into slave labor in the Soviet Union, with only his dream of returning home to his family to keep his hopes alive.

    The film, directed by Antti-Jussi Annila, will be shot entirely on location in Estonia, where it also has presales for theatrical distribution and TV. Stalin-era architecture in Estonia’s eastern town of Sillamae and the region’s Russian-speaking ethnic Russians will add realism to the $3.2? million project, says producer Ilkka Matila of Helsinki’s Matila-Rohr Productions.

    Film Estonia, the Baltic state’s new system of cash rebates, was introduced at the beginning of this year. There are four annual submission deadlines designed to "encourage better cooperation between local and foreign film producers to shoot in Estonia.” By providing rebates worth up to 30 percent of in-country production costs, the scheme, though small, is among Europe’s most generous. Promising “easy access and fast procedure,” $540???,000,?? is available this year, rising to more than $?2 million next year for features, TV films, documentaries and animation. Apart from The Eternal Road, for which funding has been approved, in late March a second feature project, sci-fin thriller Gateway ?6, a Britain-Germany-Estonia co-production, directed by Tanel Toom with lead producer the U.K.’s Sentinel Entertainment, applied to the scheme for backing.

    Talent to Watch: Triin Ruumet
    Ruumet, ??27, is the director of The Days That Confused, which the Estonian Film Institute’s head of production Piret Tibbo-Hudgins describes as a “visually stunning debut feature.” Set during the early ????1990s when Estonia was experiencing renewed independence after decades of Soviet rule, the tragicomedy is due to premiere in Estonia this spring.

    “The impulse for this film came from some internal need to express the bittersweet feelings of the ’90??s,” says Ruumet, who also wrote the script. “The film talks about the situation where someone has lost themselves, gotten stuck somewhere. It’s about how accepting yourself for who you are allows you to find internal redemption and to go on with life, in a way. It also talks about the very sensational, and at the same time tragic, time in our young republic that was the ’90??s.”

    In Cannes
    screenings by invitation via the Estonian Film Institute are scheduled for The Days That Confused and The Poet and the Spy, about an intelligence officer who falls in love with a Russian agent. There also will be a market screening of Kadri Kousar’s new feature, the murder mystery Mother, with organized sales agents The Film Sales.

  • Croatia

    Case Study: The Lake
    The war drama The Lake — produced by Luc Besson’s EuropaCorp and directed by Steven Quale — used Croatia as a key location for the film. Set in Bosnia during the Yugoslav Civil War, the film chronicles the attempt by a group of U.S. Navy SEALs to uncover an immense treasure hidden in a lake in the war-torn country. Starring Sullivan Stapleton (300: Rise of an Empire), the movie spent ?? days shooting in Zagreb (doubling as wartime Sarajevo) and Istria. “Since there were a lot of underwater sequences, one possibility was to shoot in Malta, where they have a water tank facility and we could build our set,” says producer Raphael Benoliel. “The reason we opted for Croatia was the favorable experience our line-producer had with the shoot of Canal Plus’ Borgia in Dubrovnik. In the film industry, trust is everything. You always base these decisions on previous experiences. That’s how you know that a country is reliable, that you’ve made the right choice.”

    Introduced with much fanfare in ????2012, Croatia’s ??20 percent tax rebate system helped lure film and TV productions that notably include Game of Thrones, and currently there are rumors that a future episode of Star Wars will film there. In the past four years, a total of 27?? productions benefited from the scheme. Aimed at productions spending a minimum of $330,000??? in Croatia, with a $2.9 million cap, the scheme now has run into political intransigence, industry insiders say.

    A total of $48 million has been spent over that period on products and services, with more than $?9 million distributed in incentives. However, despite rules that state rebates should be made soon after submission of approved accounts, for the 10 productions that qualified last year, generating $??25 million in spending, no rebates have been paid out yet. Industry insiders in Croatia blame a lack of political will to back the scheme.

    Talent to Watch: Hana Jusic
    Jusic, 32, recently completed her debut feature, Quit Staring at My Plate, which was produced by Kinorama, developed through the Torino Film Lab and Torino Framework training programs and presented as a work in progress at French festival Les Arcs. The film, a darkly humorous take on Mediterranean mentality with a candid approach to family, sexuality and gender, is currently in postproduction in Denmark, thanks to co-funding from the Danish Film Institute. Jusic obtained her MA in film and TV directing from Zagreb’s Academy of Dramatic Arts and has written and directed several short fiction and documentary films, including the popular childrens’ pic about a child detective Zagonetni djecak (The Mysterious Boy), directed by Drazen Zarkovic.

    In Cannes
    Croatian minority co-production Sieranevada, directed by Romania’s Crisit Puiu, is screening in competition. Zdenka Gold from Croatian production company Spiritus Movens Production was co-producer. A market screening is scheduled for A Two Way Mirror, directed by Katarina Zrinka Matijevic and produced by Factum. A personal documentary about facing loss and finding the strength to overcome it, the film was presented in January at the Trieste Film Festival’s When East Meets West platform.

  • Lithuania

    Case Study: 2 Nights Till Morning
    Lithuania-Finland co-production 2 Nights Till Morning takes a familiar convention — a couple who enjoy a brief and casual affair in a foreign capital — and gives it a twist by extending the liaison, thanks to a Europe-wide cancellation of flights due to a volcanic ash cloud (as happened in ????2010). What was a simple one-night stand between two strangers turns into a deeper love affair thanks to that delay. Directed by Mikko Kuparinen, starring Canadian actress Marie-Josee Croze and Finnish actor Mikko Nousiainen and produced by Art Box, the $1.3 million production took advantage of Lithuania’s 20 percent tax rebate scheme. Says producer Kestas Dradauskas: “Everybody always emphasizes tax incentives as a tool to attract foreign productions. But our case is a perfect example of how it works for international co-productions. And it works for national films, too.”

    Introduced in January 2014, productions that are spending up to a fifth of their budget in Lithuania can quality for a 20 percent tax rebate via a local production partner that may use the rebate to reduce local corporate income tax liability. Incentives are available to feature films, TV films, documentaries and animated movies. Domestic films and co-produced or commissioned films all are included in the incentive, which is managed by the Lithuanian Film Center. Recent projects that have benefited include the BBC/Weinstein TV adaptation of War and Peace.

    Talent to Watch: Kristijonas Vildziunas
    Lithuanian director Vildziunas, 45, made his name in the late 1990s as a rock star before turning to film. A graduate of the Lithuanian Academy of Music, Theater and Film, where he studied directing, he performed with the group Siaures Kryptis before beginning his filmmaking career. With three shorts and three features to his name — including Back to Your Arms, which was Lithuania’s best foreign-language Oscar entry in 2011????, industry observers in Lithuania are pinning high hopes on his new film Seneca’s Day. Set in Vilnius in 1989, the final year of Soviet rule, the film follows a group of teenage friends who resolve to “live each day as if it were your last” under a group they call Seneca’s Fellowship, after the famous Roman philosopher.

    In Cannes
    A market screening of new Lithuania-Latvia co-production King’s Shift — a psychological drama about a young cop left alone to guard a hated war criminal that screened at April’s Kino Pavasaris film festival in Vilnius — is planned by sales agent Reel Suspects.

  • Poland

    Case Study: Game Count
    Agniezska Holland’s latest film Game Count is a grisly crime thriller based on a best-selling novel by Polish writer Olga Tokarczuk, published in English as Drive Your Plow Over the Bones of the Dead. A mixture of mystery, thriller and dark comedy, it tells the story of a series of killings in rural Poland where an eccentric old lady becomes the focus of the Polish investigation after she stumbles upon a series of dead VIPs — all of them hunters, whom she insists have been killed by wild animals.

    An international co-production involving Polish, German, Czech and Swedish producers, the project won support from Eurimages with a $510,000 grant and backing from the Polish Film Institute. It will be Holland’s first feature since her 2011 wartime story In Darkness, which earned a best foreign-language Oscar nomination.

    Polish producer Janusz Wachala of Studio Filmowe Tor says: “We are convinced that we have been successful in establishing a natural co-production structure for this project. The action of the novel and action of the film takes place in Klodzko Valley in Poland, which lies on the border between Poland, the Czech Republic and Germany. It is a special place — for centuries shaped by the interaction of several cultures. We are excited at the opportunity of collaborating with Nutproduckce from the Czech Republic, Heimatfilm from Germany, as well as the chance to make use of the abilities and postproduction experience of the Swedish partner Chimney Pot.”

    International co-productions working with Polish partners can access grants from the Polish Film Institute. An annual budget of 22 million euros ($24 million) is available for production, subsidizing up to 40 features a year and a further 160 documentary and animated projects. A new minority co-production scheme is designed to “foster international experiences of Polish producers.” From 2016, up to $520,000 per project will be available, with up to 70 percent of Polish costs underwritten. The Institute says it is “looking for projects by established directors or young filmmakers, with an interesting festival or workshops track record, backed by an experienced producer.” There is “no geographic limits” for project proposals — “as long as there is a strong artistic involvement.”

    Talent to Watch: Klaudia Smieja
    Smieja, 35, is one of Poland’s most active producers. Her filmography includes Chemo, directed by Bartek Prokopowicz; co-producer on French director Anne Fontaine’s wartime convent drama Agnus Dei (also known as The Innocents); and an executive producer credit on Cannes 2015 Un Certain Regard winner Rams, directed by Grimur Hakonarson. Her current projects include Agnieszka Holland’s journalistic thriller Gareth Jones, based on the true story of a reporter who travels to the Soviet Union in the 1930s and whose story inspired George Orwell’s Animal Farm. She also is co-producing Under the Tree by Hafsteinn Sigurdsson, a drama about an old sex tape and a tall, beautiful tree that causes pointless conflicts between people, and Foam at the Mouth by Latvian director Janis Nords. And she is working on Park by Greek from director Sofia Exarchou, which is currently in postproduction. In addition, Smieja was the Polish locations manager for Steven Spielberg’s Bridge of Spies.

    In Cannes
    Market screenings via sales agents New Europe Film Sales of Tomasz Wasilewski’s Berlinale Silver Bear winner United States of Love and Magnus Von Horn’s Poland-Sweden co-production The Here After.

  • Latvia

    Another Eastern European territory offering attractive incentives is Latvia, where two cash rebate schemes have been running for the past six years.

    The Riga Film Fund and the National Film Center of Latvia fund, which can be used in tandem, have been increased to a total of $2.6 million (€2.3 million) from 2017.

    One recent beneficiary is Cannes' regular, Ukrainian director Sergey Loznitsa, whose new film A Gentle Creature - inspired by Dostoyevsky's short story about a woman's quest for truth in a land of crime without punishment - is shooting in Latvia. The $2.5 million project will get a $220,000 rebate from the Film Center. Loznitsa shot his Cannes 2012 competition entry In the Fog in Latvia. Sales for sis new film, a coproduction between Marianne Slot (France) and Film Angels Studio (Latvia) are being handled by Wild Bunch.

    There will be more money available in Latvia for productions celebrating the country's 100th anniversary of independence in 2018. The Latvia100 initiative is making $8.5 million (€7.5 million) available to support 12 new feature length movies, including five features, six documentaries and one animated film.