Question For FilmTVLaw.com:

I’d like to co-produce my feature film with a Chinese production company. Besides setting up the production company, is there anything else I need to be aware of? Do we need a contract and what law applies to an international co-production?

Answer by Brandon Blake, Entertainment Lawyer:

Having just gotten back from the Hong Kong Filmart, I certainly encourage everyone to explore the market for your film or television series in Asia, and particularly in the Chinese market.

The energy and activity at Filmart is no comparison with the last AFM in November. Although AFM was busy, I found many of the most active buyers were coming from Asia, and especially from Chinese streaming platforms. Filmart this year was on a whole different level. Many active buyers, many new and impressive Chinese production companies represented, and surprisingly, a level of technological innovation that was entirely missing from AFM. From glasses-free 3D, to emersion VR production, to 3D color printing technology, cutting-edge entertainment technology is being incorporated right now by many Chinese production companies on a big scale and there is not any analog to it in the US at the moment except at the studio level.

So, exploring Asian co-productions, especially with China, is a good idea.  Please also see my Entertainment Lawyer Question and Answer Forum at www.filmtvlaw.com, for more in-depth advice that I publish twice a month.

Co-productions between production companies can occur at a lot of different levels. For example, when you hire a Canadian post-production house to edit your feature, that is, in a sense, a kind of co-production. Of course, on an informal level, co-productions go on all the time, and there is no limit to working with production companies based almost anywhere in the world.

However, there are a couple of things that producers are usually trying to achieve through a foreign co-production, and when we talk about an “official co-production”, we are talking about the opportunity to take advantage of international production incentives, tax credit schemes, access to television markets, and the ability to sell your film or television series as a “local production” in the particular country or countries of the co-production.

Official co-productions are created by treaties between nations. Canada is the king of co-productions, with co-production treaties with more countries around the world than any other country. China has also been actively entering into co-productions treaties around the world. Many EU countries have co-production treaties, and there are also EU wide incentives available, but interestingly EU membership does not automatically create co-productions between EU countries. Contact the film commission of each country to determine potential co-production partners.

There is good news and bad news about setting up a co-production with China. The good news is that China is one of the few countries in the world to have a co-production treaty with the United States. Strangely, the US has negotiated fewer co-production treaties than any other industrialized country in the world. In fact, the US does not even have a co-production treaty with Canada or Mexico.

The bad news is the co-production treaty between China and the US is not very broad. There are no film incentives available from China for US co-productions, and film and television projects produced under the treaty do not qualify as local productions in China. 

To truly take advantage of the world of foreign co-productions, you must gain access to other national co-production partners. It is not uncommon anymore to have multi-party co-productions, sometimes involving three or more countries. Many countries around the world have done a better job protecting their national film and television industries and supporting their local production companies. 

There are opportunities to gain access to foreign co-production incentives, and our firm can work with you to strategically plan a co-production to take full advantage of international incentives, even if your production company is based in the United States. As with any entertainment matter, please do not make a decision about complex issues without consulting an experienced entertainment lawyer first. Feel free to contact my office at www.filmtvlaw.com about a quote.

- By Brandon Blake, Entertainment Lawyer