The foreign investment rebate system managed by Film Estonia since 2016 was established first and foremost to attract more foreign investments related to the film industry to Estonia.

Parties involved in the system have acknowledged that it has been working well. Well enough, even, that the €2 million per year currently allocated to reimbursements is small enough that it is starting to stunt the development of the field.

According to EFK board member Elen Kallas, a cap on the size of the support measure should be ditched altogether.

"In 2016, when this measure was first launched, these caps all had their place," Kallas explained. "By now, however, the industry has grown and thrived so nicely that there is an increasing amount of interest in coming to film in Estonia. The projects have gotten bigger too. They used to come to film in Estonia with budgets under €1 million; now they want to come with investments of €2 million or more."

The cluster's board member noted that the current project cap makes it impossible to bring large-scale projects to Estonia. "Some projects are just starting to pass us by," she stressed.

This year, seven projects are awaiting responses to Film Estonia applications, the approval of which would require an additional €3.4 million in rebates from the state.

According to Kallas, filmmakers from Denmark as well as Hollywood have shown interest in Estonia, with Estonian locations, crews or actors to potentially be utilized for production.

Minister: Film industry investments directly support the economy

The Ministry of Culture is aware of the industry's concern, and has submitted a proposal to the Estonian government to allocate additional funding in this order of magnitude to the Film Estonia program as an extraordinary measure.

Pentus-Rosimannus said that she would welcome the allocation of additional funding to the program for this year.

"This is a solution and a field which directly supports the economy as well," she explained. "When talking about filmmaking and specific applications, we know and can see in these cases that a significant portion of the money brought into Estonia reaches not only filmmaking, but also all other sectors as well. This is something that certainly deserves support."

The minister said that the money could theoretically be taken from the government's reserves. The issue won't begin to be discussed in more detail by the government, however, until the supplementary state budget matter has been settled. The latter is expected to happen within the next couple of weeks, she added.

In addition to a one-off cash injection, Pentus-Rosimannus continued, the longer-term perspective needs resolving as well — i.e. whether and to what extent the cap on the support measure should be increased.

"As we generally have a very recently reviewed economic forecast and not every sector is seeing such a great interest in activity in Estonia, then it is worth highly valuing all of these examples of where this interest remains high," she said. "We need to consider how this maximum benefit to Estonia provided by external interest can be sustained as well."

Siim Rohtla, adviser for the audiovisual field at the Ministry of Culture's Arts Department, said that increasing the cap on the support scheme would be a longer-term solution, which would still need more precise specifications and negotiations with the Ministry of Finance. This is definitely a crucial issue for the film sector, he added.

"Rejecting applications to the rebate program could mean long-term consequences for Estonia, such as the suspension of cooperation and loss of trust," Rohtla warned. "From our perspective, this has certainly proven itself as a very good and effective measure that is certainly worth strengthening."

The Ministry of Culture estimates that the requested additional cash injection would bring an additional €11.4 million to Estonia, with a net impact on the Estonian economy of at least €8 million.

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