Film Industry

OVERVIEW
When you chose Fiji, you will discover why it is becoming one of the most sought after location in the world. You will, experience the warmth and friendliness of its people; gain access to some of the most cost-effective production facilities; enjoy a fantastic exchange rate, and discover some of the most exotic shooting locations available in the world. Fiji provides the most exotic shooting locations in the world, from idyllic beaches, sand dunes, tropical rain forest, mountains, and rolling hills to city and suburban locations which can double of other cities. Film Fiji will facilitate with immigration permits and customs clearance and also negotiates with local authorities on your behalf for filming permissions whether it is for a single film, TV project, series, or as a long term corporate relocation. Fiji has most of the best film equipment & video editing in the South Pacific. Producers can hire film equipment from the local productions companies at a very low fee. Other heavy filming equipment can be brought in from overseas.

WHAT CAN FILM FIJI DO FOR INVESTORS
Film Fiji offers the following services to productions companies who wish to shoot in Fiji.

• Acts as a liaison with other government bodies, agencies and institutions whose cooperation, clearances, or services are required.
• Provides information, advises, directories, brochures and other collateral materials on locally available talent, crew, production resources & facilities.
• Offers location assistance by developing options for locations and providing photos and other materials describing potential shooting sites.
• Remains available to handle ongoing requests and/or sudden problems.

ADVICE AND RECOMMENDATION ON LOCATIONS
The Fiji Island offers different and alternative place to shoot. It is possible to find the wildest beaches up to spectacular colonial houses, through mountains, world religious celebrations, and endless sugarcane fields.

To shoot in Fiji it is important to consider if the location is situated in a public or private area. In this context it is of utmost importance to perform all necessary scouting, seek authorizations and permits in advance. Like the rest of the world, there are Rules and Regulations concerning restricted or security areas. Restricted and high security areas like the Airport or the Harbour will need more time to acquire authorization.

FILM MAKING INCENTIVE
The Film Making Incentive – Part II of the 6th Schedule of the Income Tax Act.
This is available to non-resident film companies only. The film company applies to Film Fiji for a reduced rate or total exemption of tax on the income of its employees who are non – residents and who are in Fiji for the purpose of conducting a film or television production.
The benefit is not based on location spend and is available to non- resident companies who intend to make a film in Fiji.

How does the mechanism work and what is the process?
The Applicant has to write a letter of application to Film Fiji giving the following information:

• Full name and address of film company;
• Full name, address, nationality, country of usual residence of the non-residentemployee and the salary that employee will be paid for the work done on thatproduction;
• Total sum of emoluments that will be paid to the local employees;
• Total amount the film company proposes to expend on local goods and servicesand a brief description of the goods and services;
• The length of time which will be spent on making the Fiji portion of the film;
• Title of the film and brief particulars of the script;
• Location(s) that the Film Company will use in Fiji.

Where the production entity has chosen to use this scheme, it cannot obtain any other tax concessions under Parts III and IV of the 6th Schedule.
At the end of the film, audited accounts are required to be given to the Film Fiji and Fiji Revenue and Customs.

F1/F2 INCENTIVES
What is the F1/F2 Incentive?
The F1/F2 Incentive are two streams of the same incentive. Both streams allow you (as a producer) to raise half of your production budget from Fiji investors. The Fiji Government incentivizes Fiji investors to invest in half (i.e. 46.5%) of the production budget for your film by offering them a tax deduction of 150 percent (for F1 Incentive) or 125 percent (for F2 Incentive). To qualify for F1, at least 50 percent of the running time of the end product film must show Fiji as Fiji. For F2, there is no requirement to show Fiji as Fiji.

How does this work?
To begin this process, the production company, must apply to FILM FIJI for a provisional certificate to allow you to raise money, ie. half your budget, in Fiji. Please note that you cannot raise money from Fiji investors under the F1/F2 incentive unless the FILM FIJI has issued you with a provisional certificate. I have attached the prescribed application form for information and record.

How much does this application cost?
The application fees for F1/F2 incentive are as follows:

BUDGET (FJD$) F1 FEES (PLUS VALUE ADDED TAX) F2 FEES (PLUS VALUE ADDED TAX) FILMS
Up to FJD$3m:FJD$250 FJD$500
FJD$3m:FJD$7m FJD$300 FJD$750
Over FJD$7m: FJD$350 FJD$1000

TV SERIES/DIRECT TO VIDEO
Up to FJD$1m:  FJD$150 FJD$300
FJD$1m – FJD$2m: FJD$200 FJD$350
FJD$2m – FJD$3m: FJD$250 FJD$400
FJD$3m – FJD$7m: FJD$300 FJD$600
Over FJD$7m: FJD$350 FJD$1000

Please note that Value Added Tax (“VAT”) is 12.5 percent.
Note also that all VAT paid in Fiji for local goods and services in relation to the production can be refunded by the Fiji Government upon completion of the production.

How do you find Fiji Investors?
We strongly recommend that you contact a Fiji promoter (co-producer) to help you find investors to raise half your production budget in Fiji. We will be happy to send you some names if you wish. Once you decide on a Fiji promoter, the FILM FIJI will be limited to playing a facilitator role only as we will be processing your application for provisional certificate (and when the film is complete, for final certificate).
What are the basic requirements to qualify for provisional certificate for F1 or F2 Incentive?
The basic requirements for both the F1 and F2 Incentive are virtually identical. You will need to send us:-
(i) completed application form and application fee;
(ii) a script or synopsis of the film (confidentiality assumed);
(ii) preliminary budget (clearly identifying proposed Fiji expenditure from foreign expenditure);
(iv) confirmation of chain of title (if applicable);
(v) completion bond certificate or letter of intent from reputable bond company stating intention to bond production;
(vi) proof of distribution in Fiji and at least one other significant international market;
(vii) list of investors and amounts invested;
(viii) acquisition and development agreement (if relevant); and
(ix) copies of cast and crew agreements (if available at time of application);

What are other important requirements?
(i) You will also need to pay the FILM FIJI a non-refundable Audio Visual Levy of 0.75% of the total production budget prior to commencement of filming;
(ii) You will need to open a Fiji Production Bank Account in a Fiji bank of your choosing and deposit your 53.5% of the budget in that account before filming commences. Please note that the Fiji investors’ funds will only be released from escrow after your money has been deposited in the Fiji Production Account.
(iii) You will need to establish a Fiji resident company for the purposes of applying for the incentive and registering for tax.

What can I do to facilitate the application process?
Please note that the above are not exhaustive lists, we strongly recommend therefore that you engage one of the main Accounting Firms in Fiji to help you manage your application process from the start. All the Firms recommended have had some experience in processing film incentive applications with our Commission and they will be able to ensure that your application meets all our relevant criteria. We will also be able to send you some names of local accountants.

What do I do next?
You will need to get in touch with a Fiji promoter to help you raise your capital and a Fiji Accounting Firm to help you put together your application for provisional certificate. We, as a Commission, will be liaising very closely with your Fiji Accountant to ensure that the content of your application and the relevant accompanying documents meet with our criteria.

STUDIO CITY CONCESSIONS
Residents
An individual, who is a resident, approved by Film Fiji is not eligible to claim in a year of assessment the tax exemption under paragraph 60(2) unless the individual:Is resident in the zone for at least 183 days in the year of assessment;

1. Maintains a primary place of residence in the zone
2. Provides to Film Fiji confirmation and certification of

• Net annual audio-visual earnings in excess of $50,000
• Source of audio visual earnings whether from within Fiji or from outside Fiji
• Assets held in excess of $100,000

Non-Residents
An individual, who is a resident, approved by Film Fiji is not eligible to claim in a year of assessment the tax exemption under paragraph 60(2) unless the individual-

1. Is resident in the zone for at least 60 days in the year of assessment
2. Maintains a primary place of residence in the zone
3. Provides to Film Fiji confirmation and certification of

• Net annual audio-visual earnings in excess of $100,000
•  Assets held in excess of $250,000

FILM TAX REBATE - CONDITIONS
Details of the Film Tax Rebate are available in the Sixth Schedule of the Income Tax Act (ITA). The payment of the Rebate, which is based on actual spend, is subject to the production company meeting all the requirements for Rebate as per the 6th Schedule of the ITA. The following are some of the main requirements:
1) The production company is a Fiji resident.
2) Minimum spend by the production is FJ$250,000 (film/TV) or F$50,000 for Television Commercials.
3) The production company must demonstrate that it is able to release and distribute the film in at least one significant international market.
4) The production company must engage the services of Fiji citizens in the movie production and must utilize technicians, students and technical aid facilities at the Film Making School at Fiji National University or any other similar local institutions.
5) The production company must have Workman’s Compensation for all locals engaged in the production and insurance cover, including public liability cover, for all locations used.
6) The production company is required to satisfy the following funding arrangement in order to qualify for the Tax Rebate:
a) Not less than 10% of total budgeted QFPE should be deposited into the Fiji production account before commencement of principal photography.
b) Not less than (next) 40% of total budgeted QFPE should be deposited into the Fiji production account midway of the production.
c) Balance of funds to be (Next 50% of total budgeted QFPE should be) deposited into the Fiji production account not less than two weeks before the end of the production.
7) The production company will be required to submit weekly cost reports and weekly production reports when production commences in Fiji.
8) The production company will be required to submit a production schedule before production commences.
9) At the end of the production, the production company must submit audited accounts of the production expenditure.
10) The production must only engage licensed Audio Visual Agents on the production.
11) The production must engage a local Line Producer or Coordinator who is a licensed Audio Visual Agent.
12) The production must acknowledge the Government of Fiji and Film Fiji in the film.
13) Regardless of the jurisdiction that the film’s story is portraying, the film must state “Filmed on location in Fiji” in the final edited version of the film.


Qualifying Fiji Production Expenditure (QFPE)
In addition to the QFPE detailed in the Sixth Schedule of the ITA, the following are some additional QFPEs approved by the Fiji Government:

1) Local Goods and Services: All expenses incurred in Fiji for the purchase of local goods and services will be QFPE.
2) Air Fare: Return air fares for all foreign cast and crew will be QFPE only for travel on Air Pacific. If foreign cast and crew are travelling on any aircraft not operated by Air Pacific then 15% of the expenditure incurred on those return air fares will be QFPE.
3) Insurance: Insurance premium paid for the purpose of the production in Fiji will be QFPE if insurance is purchased from a local insurance company in Fiji.
4) Locations scouting visit: Expenses incurred in Fiji on goods and services whilst on the final locations survey is QFPE.
5) Costumes, make-up and set design: 75% of the expenditure incurred on the purchasing of costumes, make-up and set design properties not available in Fiji that will be used in relation to the film production in will be QFPE if the said properties are left in Fiji at the end of production.
6) Post production allowance: Post production allowances will be QFPE and varies according to the budget of the film's budget : $75,000 if budget up to $3m/$100,000 if budget up to $5m/$150,000 if budget up to $7m/$200,000 if budget up to $10m/$250,000 if budget more than $10m - all Fiji dollars.
7) Producer’s fees: Expenses incurred for services by the producer will be QFPE but it will not exceed 10% of the total production expenditure on goods and services purchased in Fiji.
8) Writer’s fee: Expenses incurred for services by the producer will be QFPE provided that the rights are registered in Fiji.
9) Hiring of Cameras and Filming Equipment: Cost of hiring cameras and filming equipment from outside Fiji will be QFPE provided that such cameras and filming equipment is not available in Fiji.
10) Raw Stock: Cost of raw stock will be QFPE if supplied by a local company.
11) Customs Bond: The production will not be required to pay the Customs Bond for equipment and other items that will be brought into the country for the purpose of this production. However, all items brought into the country will be verified by Fiji Customs on arrival and should be verified again by Fiji Customs when it leaves the country. Duty will have to be paid on any item(s) brought into the country that does not return. Any rebate payable will be withheld until all items are cleared by Fiji Customs.