Film production companies

3. EIS investment offers film production companies an alternative method of raising finance for the development and production of feature films to the more established:

a. film partnerships providing equity investment in the production costs of a film (these schemes afford high net worth investors a 40 per cent tax break on the cost of production but normally have a very high threshold for minimum investment in the scheme);

b. sale and leaseback funds (which may be prevented from being combined with the equity investment under paragraph 3(a) above as so-called 'double-dipping'); or equity investment in the budget of the film or the film production company by so-called 'angel investors' (a high risk investment with no guarantee of any return or profits if the film fails at the box office).

4. EIS investment can be in an individual film or slate of films or in the film production company itself.

5. It is also possible to set up:

a. a so-called 'seed funding' company that sources EIS investment in order to develop a film or a slate of films to the production stage (for example by purchasing options, preparing budgets, paying scriptwriters, casting and sourcing distribution agreements and pre-sales); and b. a production funding company which uses EIS sourced funds to purchase the fully developed film or films from the 'seed funding' company and funds the production costs of the film.

6. EIS investments funds may be safely combined with sale and leaseback funds.

7. EIS investment does not require negotiations between the investor, the production company and any other investor (such as a distributor or provider of government subsidy) in respect of recoupment corridors and distribution of profits.

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Film Making

Film Making

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