The aggregate turnover of the film industry in Romania is of some EUR 53 million, out of which 82% is generated by foreign films shot in Romania, according to a PwC Romania study. The sector has the potential increase at least seven times if the state supported it with subsidies.

The film industry directly employs 650 to 750 film professionals and pays taxes of up to EUR 5 million to the state budget every year.

Moreover, the film industry sector has an important multiplication effect in the wider economy, generating revenues of up to EUR 149 million in sectors that are connected to the film industry. Thus, the PwC study estimates that the Romanian film industry has a total economic impact of some EUR 200 million, it creates between 1,600 and 1,800 workplaces and pays taxes of up to EUR 22 million to the state budget.

According to PwC, Romania can become an important European film producer if the state puts into practice favorable public policies, similar to those applied in other EU member states in Central and Eastern Europe.

“Although Romania benefits from a film infrastructure comparable to that in developed markets in Europe, very gifted film professionals, widely acclaimed on the global stage, as well as very diverse film locations, which has helped us attract some significant foreign productions, the local film industry has been facing a relative stagnation in recent years,” said Bogdan Belciu, Management Consulting Services, PwC Romania, one of the study’s authors.

“The overall costs for film productions in Romania are competitive, but the cost difference to other countries in the region (estimated at 3-5%) is not big enough to compensate for the lack of tax incentives that most of the countries in the region offer,” he added.

The state aid measures implemented by other countries in the region after the EU State Aid Schemes for the Film Industry was adopted in 2001 have led to a rapid increase in foreign film productions within the EU countries. For example, the Czech movie industry has reached EUR 260 million, while the sector in Hungary increased 7-8 times, to some EUR 230 million.

“A state aid scheme, similar to those implemented successfully for other economic sectors, could contribute to the rapid development of the sector in Romania. According to our estimates, the foreign film productions in Romania could increase by up to 7 times, to some EUR 350 million, and the total aggregated economic impact could go up to EUR 1.4 billion, with over 5,600 workplaces and paid taxes of EUR 110-140 million,” said Mihaela Mitroi, Tax and Legal Services Leader, PwC Romania.

PwC estimates that, if such an aid scheme were applied, it would generate budget revenues up to 4 times higher than the value of the subsidy, which is estimated at up to EUR 35 million per year (paid only if Romania attracts relevant and eligible film productions).

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International movie producers buy largest cinema studios in Romania

Irina Popescu, irina.popescu@romania-insider.com

(photo source: stocksnap.io)