The Sky 1 series Hooten & The Lady saw its protagonists searching for treasure in such far-flung locations as the Caribbean, the Amazon rainforest and Bhutan—mostly while filming in South Africa. The country, with its diverse terrain, has become a popular destination for international producers and is one of several in the region offering a range of filming incentives.
The number of countries in the Middle East and Africa currently offering television production incentives is still small, especially when compared to what’s available in Europe. But the ambitions of those few are big, and the competitiveness of their programs world-class, enabling them to attract significant international projects.
It’s often thought that there are only two places in Africa with incentives, at opposite ends of the continent: Morocco and South Africa. Both are bustling locations. But Mauritius, the small island republic in the Indian Ocean, has also begun attracting producers, with a program launched in 2013. In the Middle East, meanwhile, Abu Dhabi has been the leader in introducing a full-fledged incentive program for television.
In terms of activity, John Hadity, the executive VP of EP Financial Solutions, ranks South Africa first, then Morocco, followed by Abu Dhabi. South Africa offers a 20-percent rebate plus a 5-percent bump for expenditure on local shooting and post-production above ZAR 3 million ($230,000), while Morocco offers a 20-percent rebate. Abu Dhabi is the most generous with a 30-percent rebate. The incentives in all three countries apply to film and TV drama. South Africa and Abu Dhabi also include documentaries.
In all cases, taking advantage of incentives requires a service provider or production partner on the ground locally. The local partner would be the recipient of the incentive benefits. A foreign company would then access the incentives through its contractual agreement with this partner.
One of those companies, Film Afrika in Cape Town, has seen its business grow by leaps and bounds since South Africa introduced its film incentive program in 2004. South Africa’s scheme applies to everything spent locally on goods and services. And since it’s a cash rebate, not a tax credit, it is not necessary to wait for the end of the tax year or other fiscal timelines.
“We submit an audited copy of the finished production to the dti (South African Department of Trade and Industry), and we get the cash to pass on to the producer, which usually takes about four to six months,” says Rudi van As, managing director and chief financial officer of Film Afrika Worldwide. “It’s a simple and reliable system. The impact of incentives has been massive. When the incentive was launched, Film Afrika used to be involved in four or five productions a year; now it’s nine or ten.”
Recent projects have included Outlander and Black Sails for Starz, Roots for A+E Networks and Tutankhamun for ITV. The big current project is the multi-episode Troy: Fall of a City for BBC and Netflix. There are several others in the works that have not been announced.
“We are competing with Canada, American states, the U.K. and, to a lesser extent, Australia and New Zealand,” van As says. “Six or seven years ago, it was quite a sell to get international productions to South Africa. Things have changed. We are a global player now.”
The Industrial Development Corporation (IDC) is a key player in South Africa’s incentives picture. On top of cash flowing through the rebate, the IDC can choose to invest in qualifying productions up to 49 percent equity. It’s the only bank-like structure in the country allowed to take an at-risk equity position. The productions must either be structured with approvals from the dti and the National Film and Video Foundation as South African, or as official co-productions under the country’s existing treaties with Canada, Germany, Italy, the U.K.—recently expanded to cover TV— France, New Zealand, Australia, Ireland and the Netherlands. South Africa is looking to add more treaties, especially with Brazil, Russia, India and China, according to Monica Rorvik, the head of film and media promotion at Wesgro, the tourism, trade and investment agency for Cape Town and Western Cape. Wesgro assists producers who are exploring the idea of working in South Africa, Rorvik says, noting, “We don’t look at scripts ourselves, but we can connect you with the people who will.”
Abu Dhabi has also been ramping up its international production profile. Introducing transparency has been a major factor in the emirate’s success. “When I got to Abu Dhabi, the main thing missing was a lack of transparent incentives aligned to a global standard,” observes Paul Baker, who recently finished a five-year stint in Abu Dhabi as executive director of film and TV services in the tax-free media zone, twofour54. “What Abu Dhabi used to have was softer. It was, ‘Give us a call and we’ll see how we can help.’ Dubai is still basically like that. The incentives are about hotel rooms and plane tickets and the like. This can be very significant, but you still need transparency.”
And so the 30-percent rebate emerged. “A cash rebate is what works in our region because there are no direct taxes,” says Jassim Al Nowais, the manager of the Abu Dhabi Film Commission (ADFC).
And speed is a selling point. “We have one of the fastest rebates in the world,” Al Nowais says. “The payout is usually within 60 days.”
Since its launch in 2012, the program has succeeded in attracting 40 movie and TV productions from Hollywood, Bollywood and the local region, including features like Star Wars: The Force Awakens and Furious 7. It also hosted the high-profile Netflix original War Machine. The satirical comedy, produced by Brad Pitt’s production company, Plan B Entertainment, filmed for 22 days in Abu Dhabi and neighboring emirate Ras Al Khaimah at the end of 2015, facilitated by twofour54. Filming took place at 20 locations around the capital, including transforming parts of Abu Dhabi to create a fictional American embassy in Kabul.
Abu Dhabi’s broadly defined television rebate has also enabled Top Gear and even The Today Show to plug into the generous regime. Long-running soap The Bold and the Beautiful shot briefly in Abu Dhabi and Dubai in 2014.
Abu Dhabi conducted a study in 2016 that showed that it compared very favorably with other locations in terms of its offer for budgets in the range of $40 million. The next step is to build the production vendor infrastructure along with a crew base. At present, there are 11 TV production studios over two locations and 5,400 square-meter and 6,500 square-meter backlots. The development of large sound stages will be critical.
There is, however, a constraint on attracting more expensive international drama series: a budget ceiling of $1 million per television program. That applies whether the show is a one-off or multiple episodes. This works well for Arabic-language series, which have much lower budgets. A 30-episode series can be brought in for not much more than $3 million, so the rebate would cover a whopping one-third of the total budget. But for an American or European series, the benefit would be less impactful.
Abu Dhabi and Dubai are part of the same country, the United Arab Emirates. You could think of them as being analogous to U.S. states that have their own incentive programs.
The Dubai Film and TV Commission (DFTC), which is the leading voice of Dubai’s production industry, serves as a one-stop shop for international producers.
“The DFTC offers cost-reducing soft incentives on a case-by-case basis,” says Jamal Al Sharif, the chairman of DFTC and managing director of Dubai Studio City. “These are available either through special arrangements with major industry partners, licensing and free rebates, or repatriations with services providers, such as discounted hotels, cars, caterers, visas, locations and supplementary support.”
Turbulence in other parts of the world has been an indirect boon for the production business in the Emirates, and the same can be said for Morocco, where a current specialty is doubling for politically unstable places. Morocco stood in for Afghanistan in Showtime’s Homeland and Yemen in FOX’s rebooted Prison Break. Morocco offers a cash rebate of 20 percent on qualifying local spend for foreign TV movies or series totally or partially produced in Morocco. The number of international productions to receive permits to film in Morocco rose from 699 in 2012 to 713 in 2016.
Pretending to be somewhere else does not work in Jerusalem, which offers incentives for television drama and animation as well as film production via the Jerusalem Film & Television Fund. There is a cultural requirement: the story must be set in Jerusalem. That means Jerusalem must play itself on screen. “We can’t support a production that uses Jerusalem as a double for Damascus or somewhere else,” says Yoram Honig, the director of Jerusalem’s fund. “The story doesn’t have to be about Jerusalem per se. It can be a love story or whatever. But it needs to take place in Jerusalem, at least in part.”
Jerusalem’s fund, the first regional production fund in Israel, gets its money from the government via the Jerusalem Development Authority. For large-budget international productions, Jerusalem offers a 60-percent cash rebate up to NIS 10 million ($2.8 million). The production budget in Israel must be no less than NIS 8 million and at least 50 percent of the planned filming days in Israel must take place in Jerusalem. The incentives helped attract Dig, an American production headed by Israeli producer Gideon Raff, creator of Prisoners of War. At present, Jerusalem offers the only TV series incentives in Israel.
Israel is working on changing the rules to expand support for production to include television. Honig predicts that the change will come in 2018, possibly even in the first half of the year.
“When the national program comes in, our incentives will be available on top of any national incentive,” Honig explains. “So if a production gets X percent from Israel, it can also access our local benefits by shooting in Jerusalem.”
For Katriel Schory, the executive director of the Israel Film Fund, the main issue is not the rules but the actual money earmarked for production support. The fund that he heads has an annual budget of $6 million, but all of that goes to feature films. “We are not allowed to participate in or part-finance television productions. I pray, we all pray, that this will change. We have tried to enlarge the fund to make it possible to invest in, say, a three-part miniseries, but we don’t even have enough for the movies we’re supposed to support. We’re in negotiations for a new amount of money by the end of the year, but who knows how it will go with this government.”
Mauritius is in the early stages of building production infrastructure and that’s reflected in the generosity of its incentive package, which offers a cash rebate of 30 percent of qualifying expenditure, including travel to Mauritius and accommodation. There is no ceiling on the amount and it is available to domestic film production companies registered in Mauritius, including those with 100 percent foreign ownership.
The scheme covers telemovies or drama series, plus episodes of factual, natural history, lifestyle or magazine programs. For TV drama, there is a minimum production spend in Mauritius of $50,000.
The impact of the incentive program has been dramatic, according to Sachin Jootun, the director of the Mauritius Film Development Corporation (MFDC). “Before the incentive program, not much was happening in Mauritius,” he says. “Now we are starting to attract productions from Hollywood and Europe, as well as India. Once a few productions come, others follow. We are hoping to see plenty of television series taking advantage of what we offer.”
He indicates that speed is a big selling point. “We process applications and respond within five months. Once a production is finished, the rebate is paid within six weeks, at most, from completion.”
He adds that Mauritius also has the advantage of being a secure, politically stable country.
For any country, the challenge of attracting an influx of production is being able to provide the local infrastructure and personnel.
“Having the skills base means that foreign productions can reduce their international crews,” notes Film Afrika’s van As. “It used to be that every head of department had to fly over and be accommodated. Now, most productions only need to bring over the director and perhaps the designer and director of photography. We also have the production infrastructure. That means you don’t need to bring in equipment.”
Since 2008, the South African industry has invested in building a skills base. This was done through private funding. “We now have at least 200 trainees per year going through the program,” van As says. “It’s a mentorship program and interns are placed on productions to learn on the job. Now South African crews are being recruited to work outside of the country. This is a wonderful result as the crew returns to South Africa with more experience and international recognition.”
Abu Dhabi’s ADFC helps develop skills by “moving people who have worked on Arabic-language series over to Hollywood or Bollywood productions so that they can gain knowledge,” Al Nowais says.
Neighboring Dubai is also focusing on building local know-how so that it can reach the next stage of development as a production center. “At the moment, Dubai’s local talent pool is small, which is hindering the development of a genuine local ecosystem,” DFTC’s Al Sharif says. “We have been playing a key role in developing and supporting local talent and creative individuals, ensuring they are provided with the right conditions to express their creativity and make productions.”
A new initiative launched by DFTC is VIDXB, the region’s first annual gathering celebrating the world of online video. It will take place from December 8 to 9, 2017, at the Dubai World Trade Centre. The event will kick off a year-round series of programs to promote local content, showcase emerging technologies and facilitate skills development for Dubai’s growing digital media talent pool.
Other talent-building platforms in Dubai include in5, an enabling platform for entrepreneurs and start-ups, offering access to investors, and YouTube Space at Dubai Studio City, an incubator space giving YouTube creators from across the region free access to high-end audio, visual and editing equipment, in addition to training programs, workshops and networking events.
SPREADING THE WEALTH
As the global drama business continues to boom, the question now is, will other countries begin offering incentives?
“The challenge in Africa is that the wealth is mainly in the far north and the far south,” says EP Financial Solutions’ Hadity. “The countries in the middle are just not in a position to offer much. There might be an opportunity in Kenya, but I don’t see anything happening soon.”
Namibia has also been talking about getting into the act since Mad Max Fury Road. In North Africa, Tunisia has potential but is hindered by a perception of political instability, according to Hadity, who was involved in financing the Oscar-winning The English Patient there. “Production has happened there and there is a traditional connection with the Italians, but I think that the location between Algeria and Libya is a drawback, especially for Americans.”
In the Middle East, Jordan might be joining the competition with incentives before too long. Hopes for new initiatives were fanned when Princess Rym Ali spoke at an event hosted by Jordan’s Royal Film Commission during the Cannes Film Festival in late May. “Jordan is trying hard,” Hadity says. “They appear to be deep into conversations about creating incentives. I see a fair chance that a new policy might be announced by spring of 2018.”
While new competitors mull getting into the game, generous incentives have already put those countries offering them high on the list of potential destinations for many producers. It’s a pretty safe bet that others will be joining them in coming years.