Translated using ChatGPT service.
On June 4, 2024, the Cabinet of Ministers approved amendments developed by the Ministry of Economics to the Cabinet of Ministers' regulations dated March 15, 2022, No. 173 "Procedure for Allocating State Budget Co-Financing for Foreign Film Production in Latvia" to ensure the announcement of a new (seventh) open call for project submissions for foreign film production in Latvia in 2024. The Latvian Investment and Development Agency (LIAA) is expected to announce the new open call for project submissions as soon as possible.
"I am pleased that the support program for foreign film production in Latvia will continue. The services provided by the film industry significantly stimulate the country's economic development and enhance the national image abroad, boosting exports, productivity, and the global competence of Latvia's film industry. With the help of state co-financing, employment is effectively promoted in various economic sectors, not directly related to the film industry (e.g., hospitality, catering, transportation services). For every euro of planned state funding, the expected export volume is at least five euros," emphasized Minister of Economics Viktors Valainis.
The amendments to the existing regulatory framework include additional conditions for the announcement of the new (seventh) open call for project submissions for foreign film production in Latvia. To receive state support, it is additionally required that the actual value-added tax contributions to the state budget according to the film's budget plan must constitute at least 14% of the total eligible costs. Additionally, the state co-financing amount will be up to 20% of the total eligible expenses specified in the co-financing agreement, which will facilitate faster project evaluation and reduce the administrative burden of calculating co-financing, simplifying the conditions. Furthermore, it is stipulated that for each planned co-financing euro, an export volume (foreign capital and funding for film production in Latvia and/or revenue from film distribution abroad) of at least five euros must be achieved, thereby promoting further industry growth, increasing export turnover, and strengthening Latvia's economic image.
To attract foreign investments, various financial mechanisms in the form of tax incentives and funds have been established in many countries in Europe and worldwide, making it financially attractive for foreign film producers to shoot films in those countries, recovering part of their investment. Similarly, in March 2022, the Latvian government approved a state support program developed by the Ministry of Economics for foreign film production in Latvia.
The conditions for receiving support are specified in the Cabinet of Ministers' regulations No. 173, dated March 15, 2022, "Procedure for Allocating State Budget Co-Financing for Foreign Film Production in Latvia." State co-financing has been granted if the film mentioned in the project submission is wholly or partially shot in Latvia, the services of individuals or legal entities registered in Latvia are used in the film production, the total project costs for feature films and animation films reach at least EUR 711,436, and for documentaries at least EUR 142,287. Additionally, at the time of project submission, the foreign producer must have at least 50% of the total film production costs available according to the financing plan.
Investments made in recent years to develop the film industry by supporting foreign film production in Latvia have attracted interest from award-winning directors and world-renowned actors, ensuring further industry growth, increasing export turnover, and strengthening Latvia's economic image. Examples of foreign films partly or wholly shot in Latvia include the TV series "Heirs of The Night" (Netherlands, Germany, Norway) filmed 85% in Latvia, with EUR 3,956,000 invested during production. Another example is the film "Ravens Hollow" (United Kingdom), filmed 100% in Latvia in 2021, primarily at Cinevilla, with EUR 515,000 spent on production. The second season of the globally popular TV series SISI was partly shot in Latvia, with EUR 1,500,000 of attributable costs in Latvia in 2022.
Details of the amendments to the Cabinet of Ministers' regulations No. 173, dated March 15, 2022, "Procedure for Allocating State Budget Co-Financing for Foreign Film Production in Latvia" can be found on the Legal Acts Portal.