Cyprus’ revamped audio-visual industry called Olivewood is at risk as authorities have not kept their part of the deal in reimbursing film projects shot on location as promised through an incentive scheme.
Jiu Jitsu, starring Oscar-winner Nicolas Cage is the first international movie shot in Cyprus, attracted by a film incentive scheme promoted by the government, and overseen by Cyprus Invest, but producers claim they have not seen one cent in rebates.
They made the claims after their film was embroiled in a tussle between its directors and Auditor General Odysseas Michaelides who is, reportedly, looking into the incentives for films, including theirs.
It is claimed the Auditor general is preparing a report into the incentive scheme, suggesting film incentives are linked to scandals involving the disgraced passport for investment scheme.
In comments to the Financial Mirror, Jiu Jitsu producer Chris Economides refuted such unsubstantiated innuendo.
He argued the authorities should be focusing on fulfilling their obligations to the film’s investors they “so passionately tried to bring in”.
“Both the company and sponsors of the film Jiu Jitsu despite investing their money for a year and a half did everything that was asked by the Republic of Cyprus…they have not received a single cent,” Economides said.
Jiu Jitsu was the first Hollywood film shot entirely in Cyprus and had a late November US release.
The €25 mln film headlining Cage was attracted by Cyprus’ new scheme and due an €8.2 mln rebate.
The government has provided €25 mln for ventures it might fund yearly to promote the audio-visual industry.
The scheme provides Cypriot and foreign producers with incentives, cash rebates and/or tax credits of up to 35% on qualifying production expenditures and tax allowances of 20% for investment in infrastructure and equipment.
“In our case, we hired 220 Cypriots to work on Jiu Jitsu and not the six as required by the scheme,” Economides said.
Red tape delays
He said the producers have done everything asked of them, but the authorities have unduly delayed.
“We were asked to have an auditing firm to go over our books. We did so. Then they decided that they would assign a second firm to check our books.
They finally got round to it in July, many months after we had done our bit”.
Meanwhile, Jiu Jitsu’s accredited director Demetri Logothetis is in Cyprus to prepare for his next film, Man of War, which is slated to begin in January-February but is facing delays due to red tape.
Logothetis pointed to time-consuming procedures and changes required by the licensing authorities, who are asking the producers to resubmit their petition for support from the incentive scheme after authorities had amended it.
“We are here, ready to start the official pre-production of Man of War for over a month [but] we are still waiting for the film committee”.
The producers need the approval of the committee set up by Cyprus Invest, to obtain a guarantor certificate that will allow them to turn to banks and investors for funding.
Economides said they refiled an application, but its approval is tangled in red tape, made worse after allegations that the team may be involved in dodgy ‘golden passport’ cases.
Logothetis said investors have grounds to pull out of the project as approval seems to be stuck.
“I have worked in large studios as well as in many production companies. I was invited, and I came to Cyprus in good faith,” said Logothetis.
He argued that 220 Cypriots were employed on Jiu Jitsu while the producers paid for 8,200 stays at hotels, rented dozens of cars, hired catering services, bought construction materials, paid taxes and helped the local economy.
“The only one that has not met its obligation so far is Cyprus it has not paid its bill”.
“Not only did we do our part as producers, obtaining funding and spending in Cyprus, but our film is celebrated as an independent film with great success.
“It was a very good advertisement for Cyprus since the movie was a big hit.
“In return, I see my film being used as a tool in a political dispute while my partners in the venture saw their names dragged through the mud,” said Logothetis.
He said now, during the pandemic, is not the time for Cyprus to go back on its word.
“There is an urgent need to produce entertainment now if nothing else to fill the void created.
“Next year will bring more financial uncertainty. A new film industry in Cyprus could help cure all of this. Cypriots will be hit even harder if Olivewood is left to die.”
The Cyprus film incentive scheme launched in 2018 to promote Cyprus as a film production destination and boost local talent in the industry.
The Cyprus Filming Scheme, designed by the government, approved by parliament, and overseen by Invest Cyprus, (Cyprus Investment Promotion Agency), dedicated to attract and facilitate foreign direct investment into the country.
No one from Invest Cyprus made themselves available for comment.