Are Tax Incentives the Answer for Thailand's Film Production Services Industry?

By Scott Rosenberg

Bangkok, Thailand July 26, 2009 - Recently, as the economic recession hits home across the globe, tax incentives for film location shoots are coming under question. Are they worth it? Do state coffers register on the plus side from film shoots or is revenue being lost? This article will take a look at some of the issues.

First we have to understand that of the over 74 countries and 83 localities offering benefits, incentives and tax credits for foreign location shoots NO 2 are the same. This makes it very difficult to evaluate the effectiveness of such measures.

The State of New Mexico (USA) has been providing tax incentives to film companies since 2002. The program has been successful in the sense that companies are coming to New Mexico to make movies. In the first fiscal year of incentives, two companies received credits for qualified projects. For fiscal year 2008, thirty-one projects qualified for tax credits totaling $38.2 million. Since the credits are for production related expenses in New Mexico and the credit for the time period was twenty-five percent, this implies that the industry spent $152.8 million on production in New Mexico during the year.

New Mexico offers not only a 25% Film Production Tax Rebate on all qualified direct production expenditures in the state but also a Film Crew Advancement Program - an on-the-job training program which offers a 50% reimbursement of wages paid to New Mexican crew members in below-the line job positions to provide them with work experience to assist them in obtaining continual work in the industry.

On the other hand, The Federal Reserve Bank of Boston's New England Public Policy Center released an analysis of Connecticut's film tax credit program that's costing the state almost $90 million per year. The research suggests that the state's tax incentives may do more harm than good.

Some of the key points:

1. The credit does not pay for itself.
2. The economic benefits generated by the credit are likely to be short-lived.
3. The film tax credit may be less cost-effective than certain other business tax incentives offered by the state such as the research and experimental expenditures credit.
4. There is a race to the bottom among states competing to offer the greatest film industry incentives. It may be difficult to establish a sustainable film industry.

In Ireland, a whole different scenario is taking place. Recently a group has been calling for the scrapping of the Irish Film Board which would axe 16 people and save the government US$ 32 million.

The group calling for the dissolution of the Film Board proclaimed, "Given the scale of tax expenditure ($679 million since 1993 and $46.5 million in 2008) via the tax incentive scheme for this sector, and given the level of international competition in this market space, there is no objective economic case for subsidizing the Irish Film Industry.”

And the list goes on and on.

So what does this mean for the Thai production services industry which has been lobbying the Cabinet for tax credits to increase its competitiveness in the world market in attracting international production shoots to its shores?

Deputy Commerce Minister Alongkorn Ponlaboot announced on July 23 the Commerce Ministry would propose to the Cabinet in August a tax refund of 15-20 per cent for international production houses using Thailand as a film location.

The Kingdom now earns approximately Bt 2 billion (US$ 58.9 million) a year from international firms using Thailand for shooting, but if an incentive policy like a tax refund were in place, that would rise to Bt 20 billion ($588.4 million), the Minister maintained.

In addition, a White Paper on Advantages of Foreign Production Filming in Thailand developed by the private sector Foreign Production Services Association claims that presently there are an estimated 50,000 people working directly and indirectly in the filming industry. That number is estimated to increase to 65,000 after the introduction of filming incentives as the filming industry will have an overall positive growth.

The problem is how will Thailand measure the results of such tax-credits? The West has very specific based economic modeling systems to measure results. Even the very positive New Mexico study maintained that each modeling system has well known advantages and disadvantages and results could alter depending on which is used.
Are such forecast an measuring models utilized here? I don't think so.

It is true Thailand needs to remain competitive in a VERY competitive international marketplace but can't this be done by more specific bi-lateral audio visual treaties with individual nations?



True you have the same measurement difficulties but with varied benefits and the fact that "two heads are better than on" it may be easier to track results.
Thailand is already one of the most popular international locations for foreign production shoots – the Thai "brand" is strong.

Let's not move hastily but spend a bit of time studying the situation first.

Don't Believe Me - Believe Them Who's Saying What About Film Shoots in Thailand?

by Scott Rosenberg

Bangkok, Thailand July 19, 2009 - Why should you believe me? I'm just an entertainment journalist. Despite my many years reporting the news, attending and participating in film festivals and markets, and meeting with "players" in the film industry of the World, I've never written a screenplay or made a movie.

But I have interviewed hundreds of people and for the last sixteen years domiciled here in Thailand, have found that EVERYONE likes to come to Thailand to make movies.

Could the answer be as easy as Academy Award winning director Danny Boyle (pictured) maintained when I asked him why he liked filming in Thailand (The Beach 2000): "I like working with the Thai people," he said.



Certainly, Thailand is renowned for the smiles, the warmth and the hospitality of its populace but that can not be the only reason for taking a production on the road to film in Thailand.

Another Academy Award winner, William Hurt who was in Thailand shooting Shadows, when asked what he thinks of Thai production services said, "They are phenomenal!"

Tom Waller, is managing director of De Warrenne Pictures one of the leading international production companies in Thailand. De Warrenne provides full production services and logistics support for foreign films shooting in Thailand.

Tom says, "The main strengths of the film industry here are that Thailand offers excellent value for money in terms of the cost of crew labor and services for foreign films wishing to shoot here.

By coming here to shoot your production using local equipment and crews, you can expect to save money on your budget and achieve high production values - the skillset and work experience is here and there is already an infrastructure as Thailand has its own healthy film industry. It is also easy to accommodate crews and provide logistics support - almost everyone involved in the film industry here has some grasp of the English language.

Chinese director Zhimin Sheng (Fu sheng, Bliss 2006) agrees the lower cost of shooting in Thailand is a factor for shooting here: “If I’m making a thriller, for example, I’ll shoot in Thailand, not China, in order to cut costs.”

Hong Kong based Pulse Films director/producer Patrice Paujal answering the question of why he likes to shoot here said, "Thailand is a tapestry. You have everything here – Bangkok itself is like a movie set".

One of the most prolific British directors (now domiciled in Thailand), David Winters (The King Maker 2005) who produced and directed over 70 films in an 8 year period agrees with Tom's assessment: "There are many opportunities for shooting films in Thailand: mainly because of the cost of the labor in producing films here. Another main reason is there is already an infrastructure existing here as there are many local films made each year. You have a choice of many post-production houses, as well as many labs.

Thailand is the only real center for film making in all of South East Asia. Many other countries talk about making International films, but they do not have the opportunity to work on many and so it is more of a dream than a reality.

For me Bangkok is the center of all serious business in this country and so I prefer to base myself here. Plus there are many more people to choose from when you are making a film. Also, all of the equipment houses are here, so if you need some equipment or lights right away you can get it without stopping the production. Bangkok to me is like the LA of Thailand."

Other film makers agree that film making facilities in Bangkok are world class.

Singaporean director Jack Neo (I Not Stupid 2002, Money Not Enough 2006) said on a recent trip to Thailand: "The theaters and facilities in Bangkok are excellent. I do my post-production work here. ... I’m ...amazed by the facilities!"

Agreeing with Jack was Malaysian actor-director Hans Isaac (City Sharks 2003): "We always come to Bangkok for our post-production work, but it was on this trip, that we realized how advanced, the film facilities are, and how many options we have!

So what more can I say?

Yes, Thailand has beautiful landscapes, from mist covered mountains to pristine beaches and underwater wonderlands – from "moonscaped" riverbeds to eons old dinosaur grave yards. Whatever you are looking for in your film shoot – whatever your budget level, you can find it and film it here in Thailand.

But as I said earlier, don't believe me – believe them!

Bangkok, Thailand – July 9 2009 - In an ongoing effort to inform and upgrade standards of the private sector foreign film production services, the Thailand Film Office, Department of Tourism Development, Ministry of Tourism and Sports held a training program July 1-3 2009 in Bangkok.

The Seminar brought together representatives of the Immigration Bureau and Department of Labor (visa types and application process for working foreign crews); Bureau of the Royal Household (filming in locations under the Royal Household's care); Customs Department (process and procedure for import of equipment and materials used in filming); Fine Arts Department (rules and regulations for filming within its jurisdictions); Department of National Parks, Wildlife and Plant Conservation (rules and regulations for filming within National Parks); Revenue Department (tax rates, payment methods and double taxation laws); State Railway of Thailand and Airports Authority of Thailand (rules and regulations for filming within their jurisdictions); Civil Affairs Department (filming in military jurisdictions and request for weaponry support) and the Bangkok Metropolitan Administration (filming in Bangkok).

Over 200 representatives of the film production services sector attended the meetings, information from which will help increase their understanding of processes for foreign production filming in Thailand so they can advise foreign productions better.

In her opening statements, Ms. Wanasiri Morakul, director of the Film Office noted that foreign productions in Thailand generate income of over US$ 56.8 million a year plus an undetermined amount that gets spent and filters into the grassroots economy in the provinces.

In addition, it was announced that the number of foreign productions filmed on location in Thailand in 2008 was at an all time high (526 productions which include documentaries, TV & film, music videos and commercials) with 2009 numbers at the half year (236) looking to meet if not beat last year's total. Overall foreign location shoots contributed US$49 + million annual business in the Kingdom.

In '08 Japanese (134) and Indian (123) productions led the way followed by European productions (106) and others.