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Olivewood incentive scheme gets 2026 extension

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The Olivewood incentive scheme designed to promote Cyprus’ revamped audiovisual sector for big movie studios to sprinkle more Hollywood magic has been given a three-year extension till the end of 2026.

The news was delivered by the Commissioner for State Aid Control, Stella Michaelidou, while the decision will need to be ratified by the Cabinet.

Once approved, some €90 mln will be earmarked for the scheme to cover projects coming in the second half of the year, until the end of 2026.

The scheme was introduced in 2017 but was only used from 2019.

In 2020, the scheme was redesigned, raising the ceiling by several million euros to attract the film industry’s big guns.

It was introduced for three years, expiring at the end of this year, with the Cabinet initially issuing a temporary extension until the end of 2024.

Tax rebates and credit breaks are on offer, with the most attractive incentive being a maximum 35% reimbursement for nearly all expenses made in Cyprus.

It covers hiring local filming crews, renting portable toilets, and recruiting animal actors.

The state scheme covers rebates worth €25 mln per year, with officials aiming to use the entire budget.

Film production companies in Cyprus can choose between a cash refund and a tax credit.

They will benefit from the tax deduction for investments in infrastructure and equipment and the VAT refund on eligible expenses.

Productions that can benefit from the scheme include cinematic movies, TV movies, series or miniseries, digital or analogue cartoon movies, creative documentaries, and reality TV that directly or indirectly promote Cyprus and its cultural wealth.

Productions that received funding include the thriller “The Ghosts of Monday”, which got a rebate of €142,000; the historical drama “Tel-Aviv/Beirut”, also receiving €142,000; and the movie “SOS Survive or Sacrifice”, starring William Baldwin, which was approved for €192,000.

Missing from the list of productions receiving rebates is the first major Hollywood film to be shot entirely on the island, ‘Jiu Jitsu’.

The film cost €25 mln and was to shoot Cyprus to Hollywood stardom.

But the venture became a nightmare after Hollywood producers sued the authorities, namely the state agency for attracting foreign investments, Invest Cyprus, for not honouring the incentive scheme.

The producers behind Jiu Jitsu, the first major film project to be shot entirely in Cyprus in 2019, starring Oscar winner Nicolas Cage, claim the government did not fulfil its €8.5 mln rebate obligations.

Fallout

Following the fallout, they abandoned plans to carry out five projects worth €125 mln on the island, taking with it the credibility of the audiovisual incentive scheme.

However, the industry proved to be able to shake off the shock, attracting big film productions, including a co-production of a Cypriot and a US company, The Islander.

The Islander, starring Agni Scott and multi-talented Harry Connick Jr., is currently in post-production, and producers hope to see it in cinemas this month.

According to film industry sources, The Islander was to be the most expensive Cypriot production, with producers waiting to show the world their work.

Calling the shots behind the camera is South African Cypriot Stelana Kliris.

Olivewood has also been chosen for a new UK drama series on Channel 5.

The miniseries will be shot entirely in Cyprus and screened on Channel 5, the UK’s third-largest commercial TV station.

Love Rat will be a four-episode series produced by Clapperboard Studios and distributed internationally by Entertainment One (eOne).

Love Rat is an escapist fantasy that transforms into a terrifying psychological thriller, commissioned by Channel 5, owned by leading entertainment company Paramount Global.

In May, a Swedish reality show called “The Challenge” wrapped up shooting in Cyprus.

After years of being filmed in Malta, the Swedish producers decided to try Cyprus.

The Swedish crew set camp near Alaminos village in the Larnaca district, just off the Nicosia-Limassol highway.

“The Challenges” was based on the longest-ever running reality show “The Real World,” on air since 1992, where contestants take part in a series of physically challenging tests while living under the same roof under the constant eye of the cameras.

“The Challenge”, filmed over 19 episodes in just 23 days, is set to air in Sweden at the beginning of 2024.

Production costs for Cyprus are expected to exceed €2.4 mln, excluding taxes and mandatory contributions to the state.