Film Rebate vs. Net Cost
Malcolm Scerri Ferrante explains why smart producers are focusing on “Net Cost” and not on rebate schemes alone, and how Malta can remain competitive if it invests seriously in crew training.
Where Malta has an important advantage
The rebate can also apply to salaries of qualifying foreign crew and, importantly, also to above-the-line salaries connected to the Malta shoot. This makes Malta more attractive for productions that need to bring in a significant number of international personnel, such as large studio films or TV series shooting only partially in Malta and therefore needing to bring along their core team.
The same applies to foreign cast. The low budget film used in this comparison will have approximately €175,000 in foreign cast salaries, the majority US tax residents. At an assumed 34.5% Malta effective rebate, that could generate a refund of €60,375 (or almost €70,000 if the film qualifies for a 40% rebate certificate) — an advantage that would not be available in the other competing countries for the same foreign cast which would also most likely not be found locally. (In reality, the foreign cast will cost the producer 10% in withholding taxes but this is a factor regardless of the rebate, and its cost is sometimes passed onto the cast.)
When Bulgaria may win
Bulgaria becomes particularly attractive when a production requires substantial set construction. Both construction labour and materials are significantly cheaper than in Malta. It is worth noting that Bulgarian construction crews are considered fast and productive, potentially reducing the time needed to build sets.
For a production with only modest construction, however, that advantage may be less important.
Where Spain struggles
Clearly Spain comes out as the most expensive. The results in this analysis are optimistic when considering that the Spanish crew rates are based on 10+1 hours rather than 11+1, which is the standard in the competing countries. Also — whilst some regions offer very generous rebates — the standard national baseline of 30% is tiered downwards to 25% after the first eligible million Euros. (However, a TV series can be accounted for episodically.)
If Spanish rates are not too negotiable because of the prevailing market conditions, then of course there is little hope for Spain to compete unless the film seeks its many unique locations which can then make it worth the greater expense of shooting there.
The wider picture
Cost of crews and extras is of course only one part of the decision. Producers will typically consider other factors such as weather and scheduling, equipment availability without expensive shipping costs, location permits, hotel rates, the attractiveness of a host country for a particular star, and — as explained above — whether experienced local crews will actually be available when the production needs them. For productions independently financed, the cash-flowing of the rebate, its bankability and its payout in a timely fashion is another factor always considered. And let us not forget probably the most important factor of all: locations. These will likely have a very big influence on the decision-making, as they should. (For example, Steven Spielberg used Malta to portray seven countries in his film Munich. That offered the production a special value hard to ignore, despite Malta having no competing rebate at the time.)
Of course crew rates depend on local market forces so the above figures can fluctuate and one country’s crew can suddenly become 10 or 15% cheaper or more expensive than another for a particular period.
However if one assumes 95% of the required crew is locally available in all four countries at a given time, then it is interesting to note that the country that currently has no reliable rebate — South Africa — manages to compete well with the other three and is closest to Bulgaria’s net cost.
Malta can still be the cheapest of the four, provided a big majority of the crew is local and the production therefore qualifies for a sufficiently strong rebate. However, switch 35 locals to foreign “imports” and for this particular film Malta falls from first to third place.
This small island nation has the potential to compete but its success depends heavily on securing a largely local crew and achieving a strong rebate simultaneously. Neither can be achieved without the other.
Last June, the Maltese film commissioner announced a €2m budget for “upskilling” crew. This couldn’t come at a more appropriate time, and it really should have started years ago once the rebate got ramped up. But better late than never. With some optimism these funds will remain allocated for training, and next year the industry will start seeing a glimpse of the first tangible results.
The Malta Film Commission’s dream for building a professional film sound stage will hopefully come to fruition one day, as this will help grow the industry even further. However if a film chooses Malta only for stage work, the reality is that there must be a good abundance of local professional crews in order for the country to compete on the Net Cost.
For producers, the lesson is that the most attractive headline rebate rate is not necessarily the cheapest production once crew availability and other practical costs are factored in.
Two decades ago I had just emigrated to Vancouver when a producer asked me to manage a shoot in another country.
Because we had previously worked together successfully, I accepted without hesitation. On the plane I read the script that reminded me of the beauty and landscapes of The Lord of the Rings.
The day after landing I found myself scouting locations with the creative team. We drove out of the city to see what, to my eyes, was a boring, grey countryside, nothing like the locations in the script that I had just read.
That evening I was in the office canteen with the two leading producers and I shared my first impulsive thought: The script reads like it should be shot in Vancouver or in Cape Town. I had discovered Cape Town a few months prior, a city indisputably as beautiful as Vancouver in terms of landscapes.
My new bosses gave me a stare that said, “It’s too late to change.”
Later I discovered the service company had travelled to Los Angeles to sell the concept of shooting the film in their host country using their country’s new rebate as their calling card. I learnt the studio had got excited and made a decision without bothering to scout the country first, and without waiting for a budget.
In the first week of filming, the studio boss was on set and our outgoing key grip greeted her and asked her how she felt. Her response was “I don’t understand why we are here.”
As a few weeks went by and rushes reached the studio executives in LA, we received a message loud and clear: We need better locations and those around us are not good enough. We needed to look beyond our borders and so we went to a neighbouring country and shot there in spectacular locations for two weeks.
A year later, when the film was in post, the execs felt the film was still missing high value location cutaways. So a second unit with doubles for the actors was set up. Guess which country was chosen? Vancouver.
The film obviously went over budget but it looked great. Whilst the financial incentive was attractive at first glance, the speed and experience of the local crews, the need for many translators and the additional filming required in two other countries were not factored in. The film broke even after Print & Advertising costs but it could have made many millions in profit had the executives thought harder about the “where to shoot?” question and not be simply driven by a rebate alone.
The moral of this story is that for many years producers have been chasing rebates without thinking of the real net costs, and I feel some still do. But the smart ones know that the rebate percentage alone is not the be-all and end-all. Proper research and development, together with professional budgeting, is integral to deciding where to shoot.
Comparing costs before and after a rebate
Recently I did a cost comparison of four possible filming destinations - Malta, Bulgaria, South Africa and Spain - for a low budget production involving six weeks of shooting. The analysis considered:
a crew of just over 100 (95% of whom would be local and the rest flown in from the US);
100 background extras on the day being costed;
limited set construction;
a production that is mainly based in a studio (or warehouse in the case of Malta), rather than dependent on locations;
The comparison was focused on the daily cost of the total crew (BTL + ATL with minimal breakage) — considering the average of their salaries — and the 100 extras on that shooting day.
Before cash rebates or tax credits, the estimated daily total cost of salaries (including 5% foreign crew) and applicable employer costs (fringes) is lowest in South Africa and highest in Spain:
South Africa: €28,363
Bulgaria: €35,889
Malta: €42,664
Spain: €55,489
Once the available rebates or tax credits are applied to those crew salaries that are eligible for the respective rebate, the picture changes.
Malta's estimated net daily crew cost falls to between €25,812 and €30,078 since the effective “net” rebate ranges from 29.5% to 39.5%.
Bulgaria comes in at €28,229 with a 25% rebate, South Africa – which has no reliable rebate - at €28,363.
Spain comes in at €40,417 with a rebate of 30% in a region with sufficient qualified crew available.
So, at the outset, Malta can be the cheapest option - but only under the right circumstances.
The big question for Malta: crew availability
The main challenge is not necessarily Malta's crew rates. It is whether enough suitably experienced local crew are available.
First, Malta’s maximum rebate of 40% (39.5% after a 0.5% skills contribution) is dependent on each department hiring a minimum percentage of local crew.
Secondly, if a production has to bring crew in from abroad, flights, hotels and per diems can add considerably to the budget.
The analysis also estimates that if thirty-five of the local crew positions had to be filled in Malta by foreign ‘imports’, for a six-week shoot plus preparation and wrap, the gross additional cost would be at least €360,000. This assumes a four-star hotel room is sufficient for each member, economy travel and a modest per diem. After applying a safe effective rate of 34.5% for the Malta rebate — because, according to the official guidelines, the top rate will only apply when all departments reach a minimum specific percentage — the net additional cost would be €235,800, but it would still make the production more expensive than having a fully local crew, as it would increase the daily shooting cost by €7,860 if shooting on 5-day weeks.
These calculations are minimally optimistic as they assume the foreign crew are hired from a country where they do not cost more than Maltese crews. And they do not calculate the added ground transport that would be required since foreign crew will not have their own transport, unlike local crew.
For producers, this means that crew availability needs to be considered alongside the headline rebate, not after it.
Footnote: For the purpose of this comparison, the shooting regions analysed were specifically Malta, Sofia (Bulgaria), Madrid (Spain) and Cape Town (South Africa), all centres for strong local film crews provided there is no excessive number of productions taking place at the same time. The data for this analysis was cordially sourced from Nu Boyana, Palma Pictures, Spain Film Connection and Film Afrika.
31 August 2026