Malaysia’s sovereign wealth fund Khazanah Nasional has set up a subsidiary company which has begun to provide cash flow to film and TV productions using the country’s new 30% cash rebate scheme.
Malaysia introduced production incentives which are among the most generous in the world in order to help develop the country’s film industry and to support the newly opened Pinewood Iskandar Malaysia Studios.
“Within a month of opening we are full,” said Michael Lake, CEO of the studios, at a promotional event held in Hong Kong at FilMart.
The studios have been used by two local film productions and briefly by the Michael Mann-directed “Crash.”
Ten episode TV series “Marco Polo,” produced by The Weinstein Company for Netflix, is currently occupying all five sound stages at the Iskandar facility as well as its back lots. Production will continue through September.
To qualify for the rebate a film must commit to spending US$1.51 million (MR5 million) in country and receive a preliminary certificate of approval from the National Film Development Corporation (FINAS). In order then to claim the refund — which is related to in-country spending, not tax — a film must have completed production, have its accounts audited and receive a final certificate. It is anticipated that the rebate will be paid out some three months after approval.
But in order to bring forward the effect of the rebate and make the government incentive useful to a producer while the film is shooting, Khazanah’s Rhizophora Capital can provide discounted funding after the preliminary certificate is issued.
In other jurisdictions where incentives and discounts have been established longer private sector companies or banks might provide cash flow against the provisional certificate. “But in Malaysia this is new stuff. We had to provide it ourselves,” said Michael Lake, CEO of the studios. Khazanah is the major financier behind the studios, which opened for business last year.
Lake said that the studios are in the process of opening Asia’s largest purpose-built green screen tank.
Now that the studio is operational, it is attracting a growing number of related facilities companies. Japan’s Imagica recently opened the Imagica South East Asia digital post-production centre.