Israel to Invest NIS 60 Million to Lure Foreign Film Studios

State will offer foreign producers a 20 to 25 percent refund on their expenses in Israel.

The government will invest NIS 60 million over the next three years in an effort to promote foreign film and television productions in Israel.

As part of the experimental project, the state will offer foreign producers a 20 to 25 percent refund on their expenses in Israel, under a deal reached between the finance and industry ministries and the Israel Film and Television Producers Association.

The ministries are still discussing the exact refund to be offered producers and the threshold conditions they will be required to meet.

"We checked the procedures used in other countries that give benefits to foreign productions, and found that these benefits do wonders for the hosting state or city's economy, industry, tourism and cash flow," said producer Haim Mekelberg of the producers association. "For instance, Hungary, where three or four foreign movies used to be filmed annually, enacted a law in 2004 to give producers a 20 percent refund. By 2008, 47 foreign productions were made in Hungary, and in 2009, 52. These productions brought Hungary an estimated half a billion dollars a year."

Foreign film production companies prefer to go to countries where they are offered refunds, and as a result, they avoid Israel almost entirely, he added.

"Five months ago, representatives of an American television network wanted to film a series in Israel at a $30 million investment," Mekelberg said. "They came here and met several officials, seeking an offer of a refund on their investment here, but received none. In the end, they filmed the series in Jordan, where they were offered a 30 percent refund."

The producers hope the project will restore Israel's situation to what it was in the 1980s, when large foreign productions such as "Rambo 3" and "Iron Eagle" were made in Israel.

"If a law stipulates an automatic refund for foreign productions, it will be great news for us, because it will provide more work for people in the film industry, which is now in a bad way," Mekelberg said, adding that the influx of funds would also boost local industry.

A law passed in October 2008 was intended to promote foreign productions in Israel, but failed because of the complicated refund procedure it instituted. That law required local producers to pass the refund on to the foreign producers after collecting the money in advance from local service providers. But the local producers had trouble carrying out this procedure, Mekelberg said.

Now, the foreign producers will be granted an automatic refund out of money the state has set aside for this purpose.

"The government attributes great importance to promoting the Israeli film industry and encouraging foreign film and television producers to shoot films in Israel," the Finance Ministry said in a statement, adding that it and the industry ministry are now "drafting the terms and incentives to be offered foreign productions that come to Israel. The procedure is expected to be completed in the next few months."

"The foreign film industry can make a considerable contribution to the economy and employment," added the Industry, Trade and Employment Ministry. "It also has other advantages, such as strengthening tourism and showing Israel from a different, more positive angle than is usually seen in news broadcasts worldwide. Several foreign productions have already contacted the ministry to examine the possibility of filming in Israel."