Mongolia to Launch 30% Film Production Incentives

Mongolia is to launch film production incentives from early next year. The move adds to the attractions of a varied and little-exploited country.

The country’s parliament in Ulaanbaatar approved the measures in late August in the hope of expanding its creative industries.

“We have been promoting Mongolia as a location since 2017 when we joined AFCNet [the Asian Film Commissions Network]. Now we have a government that is willing and planning for development of the content industries,” Orgil Makhaan, president of the Mongolian National Film Commission told Variety. “There is no reason why, over time, Mongolia cannot be the next New Zealand or Iceland.”

Primary among the package of measures is the establishment of a 30% location incentive scheme for qualifying and accredited film and television productions that take place in the country. Open to productions with a minimum spend of $500,000, the system is a cash rebate that is not linked to the tax system or other credits.

A similar 30% rebate system is also being established for film and TV projects which use a substantial number of Mongolian personnel for post-production.

The new law introduces two other rebates: a 10% cultural incentive available to productions that highlight Mongolian culture and heritage; and a 5% foreign crew and talent incentive.

Significantly, the three schemes may be combined to generate rebates of 45% for particular projects that tick all the boxes.

Alternatively, for those which don’t meet all the criteria, there will also be a newly available 20% Mongolia Film Incentive. This applies to local or joint-film productions that promote Mongolian culture and heritage to international audiences. (Mongolia currently has no bi-lateral co-production treaties, meaning that all multinational projects are constructed as privately contracted joint ventures.)

Several jurisdictions in Asia have introduced production incentive schemes over the past few years, including Malaysia, Thailand, The Philippines and Qingdao in China. Some schemes may be small in scale, but locations managers report that studio production heads expect to be able to access soft money schemes and that without them their locations and allied industries were at a disadvantage.

For now, the Mongolian incentive scheme has no ceiling, meaning that even a mega-budget Hollywood tentpole could qualify for a 30% rebate. In practice, government is expected to set aside a specified budget that will be available from when the schemes become operational on Jan. 1, 2022.

“We’d love to have a Marvel or Loki film shoot here. In practice, we’d probably try to work out something of good for both parties,” said Makhaan. The country has already been accessed by shows including Netflix-Studio Dragon Korean series “Crash Landing on You” and “Sink or Swim.”

“We are working hard to make sure that all the details are ready by January. Accessing the scheme is likely to require a Mongolian partner or the establishment of a local company. And we’d expect the production to use some local crew, though having an international cast is not going to be a problem,” said Makhaan.

“We also have until January to establish the way that the cultural incentive will. Qualification may be through a point system, as in some other countries, though this has not been finalized,” said Makhaan. “We expect it to be overseen by an eleven-person committee, that involves three or four government representatives and the majority from the film industry.”

Since joining AFCNet, Mongolia has pitched itself at locations expos in Los Angeles and Busan. As the country diversifies its economy away from a heavy dependence on mining, it is re-branding itself as a modern nomadic society, and one that is open to soft-power and cross-border co-operation.

Makhaan says that selling points include: Mongolia’s ease of connection (1.5 hours flight from Beijing, 3 hours from Seoul and 7 hours from Berlin); sunshine on 80% of days, even in winter; four distinct seasons; cityscapes reminiscent of ex-Soviet Bloc architecture; and hugely varied landscapes (deserts, icy mountains, steppe-grasslands, dense forests).

“We don’t have New York-like streets or marine locations, though, with a massive freshwater lake, we come close on that front. And we have pretty much everything else,” said Makhaan. “Now we have the location incentives too.”