How To Start A Film Production Company in Europe

Last updated: 13 June 2023 Views: 8797
How To Start A Film Production Company in Europe

So you want to start a film production company. You’ll have to move to America, right? Wrong! While Hollywood still dominates the global box office, Europe has a strong claim to be cinema’s second home. It’s where the medium was developed, and where many of the most experimental and interesting filmmakers have resided.

Currently the EU and European countries are making a real push to break America’s stranglehold. A number of funds are driving innovation and helping young filmmakers, while also promoting European culture and heritage. Among those countries, France is fast becoming the best place to start a film production company.

Nail Down Your Niche

Video is playing a much greater role online, and businesses are recognising the need to drive engagement with unique content.Lower level video production for SMEs and large enterprises is becoming more common, as are projects for individuals. Meanwhile online content creators are getting richer, outsourcing content production and editing to professionals by turning to single production companies. These companies film their events or adverts and keep their work on archivefor access and reuse in future years. Meanwhile developments such as Facebook’s custom videos generated with catalogued data show the future of this kind of personalised video production for independent consumption.

The issue here however is that if you choose to go into this smaller business-targeted film production you may not be able to benefit from grants. Most tax relief is aimed predominantly at more expensive film and TV productions. While investment may be more difficult to source, these sorts of companies scale much more quickly. A modest video production company will have to buy low level equipment and hire judiciously, working through many smaller projects and slowly expanding. A film production company only has to be around for a year and have gained sufficient experience to benefit from a range of grants, which will make projects much more palatable for you and your investors.

Take advantage of tax reliefs

Starting a production company in France can provide both EU and French funding. Note however that EU common market rules ensure the level of cumulative tax relief cannot exceed 50% of total spending, or 60% for other criteria such as co-productions. This is uniform across all countries except the UK, where there are exceptions for new directors and low budget films.

Related article: How to Start A French Company in 8 Easy Steps

Creative Europe

Creative Europe is an initiative designed by the European Commission to promote the growth of creative industries in Europe. By funding film production and distribution across Europe it hopes to expand the industry’s global reach, helping filmmakers and spreading European culture.

Companies can apply for a Creative Europe grant to fund either a single project or a slate of 3-5 projects. Single project applicants must have been formed for at least a year, and cannot be individual applicants. Those applying to fund a slate of productions must have been formed for three years or more, have proven experience, and have a long term plan to strengthen the international position, finances and innovative capacity of the involved companies.

The fund is aimed at both theatrical releases and other audiovisual works. Films intended for cinemas must be at least 60 minutes long, and should be animated features, creative documentaries or other works of fiction, although exceptions are possible. Other audiovisual works should be intended for release on television or similar digital platforms. Drama films or series must be at least 90 mins; animations should be at least 24 minutes long; and creative documentaries must be at least 50 minutes, with a minimum episode length of 25 minutes.

All works are also subject to cultural criteria. These include:

  • High creative/artistic value and cultural diversity
  • The potential to reach audiences in Europe and globally
  • Driving cooperation between companies from different countries
  • Marketing and distribution strategies built from the development phase

French tax relief

As with most nations, France provides its own national tax reliefs to stay competitive. A recent slate of reforms in 2015 and 2016 has made France one of the best places to make films in Europe. Two separate schemes now benefit both French and foreign companies, with the opportunity for French production companies to choose between the two schemes.

Companies paying tax in France are eligible for the national tax credit. This can be used to claim back up to 30m euros of investment (dependent on the EU cap). The rates are as follows:

  • 30% for theatrical animation, documentaries & fiction predominantly in French language
  • 20% for other theatrical works
  • 25% for audiovisual fiction/animation
  • 20% for audiovisual documentaries
  • 60% for directors’ 1st and 2nd feature / any production under €1.25M

Both the credit rate and credit cap are considerably higher than local rivals Ireland and Germany. The credit rate is also 5% higher than the UK, although the UK has no credit cap. The French credit notably has no minimum spend, meaning any eligible production by a French company can benefit from this tax relief (For more detailed information on how to open a French company, you can download our FREE guide on how to open a business in France).

TRIP - International Tax Credit

When involved in international co-productions, French production companies can also opt to offer production services and instead benefit from the TRIP credit. They cannot benefit from both tax reliefs simultaneously.

This credit applies to:

  • theatrical animated feature films,
  • theatrical fiction films with special effects representing a minimum of 15% of the shots, or an average of 1.5 plan per minute (such works are treated as animated films)
  • audiovisual fiction films and series produced as part of international co-productions for a minimum budget of €35,000 per minute, out of which 30% at least is covered by foreign funds (provided only that an additional French language version is delivered).

Films which meet these criteria are eligible for a 30% relief against specified expenses incurred by the French production services company, up to a maximum 30 million euros. The work must be connected with the French culture, heritage or territory.

A points scale is used to reward elements such as:

  • the number of shooting days in France
  • the technical services purchased in France
  • the French, French-speaking or European dramatic content (film locations, subject, story, characters)
  • the authors and collaborators being citizens of France or of other European countries.

The number of points required differs for fiction and animation. The animation scale is also used for works of fiction in which special effects represent 15% or more of the total number of shots. The work is not allowed to take advantage of any subsidies provided by the National Centre for Cinema and the Moving Image (CNC), excluding official co-productions with France.

Be careful of hidden costs

What seems a reasonable working day for an American probably isn’t for a French film worker. France has some unique worker protections including strict limits on hours worked per week.

More than 35 hours a week will require overtime pay, although there are now some exceptions to this that may apply to your shoot. Given that extra days can impact on location availability and massively impact costs, the working hours and salaries will need to be sorted out swiftly. This is all potentially open to change following the upcoming Presidential elections, however!

When dealing with and filming a large number of people, there are many legal factors that you may not have considered. Anyone appearing on film will have to sign release forms, and any piece of music captured (even diegetically appearing within the film) will have to be licensed and paid for. A lot of these issues are best farmed out to a dedicated legal department, but it’s a less obvious (and equally crucial expense) than equipment or actors.

While distribution has got easier with a variety of platforms, this is something you need to nail down early. This will likely form a part of your business plan and project outline, given that grants and reliefs are highly dependent on the film’s platform and content. But it’s good to have contingencies and a long-term plan for how your content will move between platforms.

If you need more information on film production company formation in Europe or to register a business in France – or for issues relating to AccountancyImmigration or Visas – please download our free guide below and either contact us directly by calling 0033 (0)1 53 57 49 10 or emailing us from our contact page and we’ll be happy to discuss your requirements.

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