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Location Incentive

KOFIC Location Incentive for Foreign Audio-visual Works
1. Program Summary
(1) Purpose
  • The money provided by this incentive program is in its entirety drawn from the Tourism Promotion and Development Fund and shall be used to support part of the expenses spent in Korea for producing foreign audio-visual works, for the purpose of tourism promotion, job creation and other economic benefits.
  • It is also aimed at encouraging the hosting of location shooting and post-production of foreign audio-visual works and thereby enhancing the production capacities of the Korean film industry and creating an international production network around it.
(2) Eligible Works
  • Feature films, television series and documentaries developed and produced by a foreign production company, in which the allocation of foreign capital in the production cost exceeds 80%
    • Feature film : a consecutive set of images or video on film, disks, or digital medium, with minimum runtime of 70 minutes produced for public viewing at a cinema, screening facilities or similar places and/or through on-line streaming.
    • Television series : a series of dramas or shows produced for television broadcast or on-line streaming, with a pre-planned set number of episodes sharing a common theme or structure.
    • Documentary : a documentary produced for viewing at a cinema, screening facilities or similar places, television, or on-line.
    * Animation, commercials, sports events, and educational programs are not eligible.
  • Eligible works must satisfy the following requirements:
    • Must receive approval from the Review Committee who will evaluate, among other things, the following three elements: (1) the degree to which the work promotes tourism ("tourism expansion"); (2) the degree to which the work contributes to the Korean film industry ("quantitative contribution"); and (3) the extent to which the foreign producer participates in the production of the work ("foreign engagement")
    • Must spend no less than 50 million KRW (approx. 44,000 USD) in Korea for production expenditure as recognized by the Korean Film Council (’Qualifying Production Expenditure' or QPE). For a television series, the production costs of all the episodes can be aggregated.
    • Must shoot more than 3 days in Korea
(3) Eligible Applicants
  • A corporation organized and registered as a business in Korea meeting the following requirements:
    • A film producer or a video producer recognized under the Film and Video Works Promotion Act or an independent broadcasting audio-visual work producer recognized under the Basic Law on Cultural Industry Promotion.
    • Must be a company who has signed with a foreign production company on a production service agreement, and thereby provides services necessary for in-Korea production of a foreign audio-visual project and operates and manages the relevant financial account for the production. This company must not be a Korean subsidiary of or a Korean company invested by a foreign production company. Provided that, the aforesaid foreign production company shall not be a Korean company’s overseas branch or owned more than 50% by a Korean company, its foreign subsidiary or a Korean person.
(4) Amount of Grant
  • Up to 20~25% of the total QPE in cash pending on the available amount in the program's total budget
    • 25% rebate : Shoot more than 10 days in Korea
      Spend more than 0.8 billion KRW(700,000 USD)
    • 20% rebate : Shoot more than 3 days in Korea
      Spend between 50 million KRW(44,000 USD) and 0.8 billion KRW(700,000 USD)
  • QPE recognizes only those costs incurred from 3 months prior to the commencement of the principal photography in Korea to the date of the audited expenditure statement. QPE must be paid by the corporate credit card(s), bank transfer with electronic tax invoice. (All payment methods should be described in the application form.) However, the exception may apply if the cash expenditure is inevitable due to lack of transportation and/or communication facilities.
    *Refer Exhibit A for the Standard of Qualifying Production Expenditure
  • Post production costs or labor costs for actors/actresses and staffs must not exceed 50% of the total QPE, the cost for the main casts must not exceed 30% of total labor cost a production applies.
  • The maximum grant per production is 0.2 billion KRW.
  • Any production cost for which government and government-related funding has been made available shall not be recognized as QPE.
(5) Application period
  • All year round
(6) How To Apply
  • Log in to www.kobiz.or.kr to apply online
(7) Program Budget
  • Program's total budget for 2021 is 384 million KRW (approx. 350,000 USD).
  • The grants are taxable.
2. Grant Application and Payment Process
(1) Application Process
  • Overall process : (1) Provisional application; (2) Entering into an agreement; (3) Final application; and (4) Grants awarded
    • Provisional application : The applicant submits the provisional application with supporting documents. The Review Committee evaluates the application and decides on the eligibility and the provisional grant amount, if any. Finally, KOFIC, after deliberating upon the Review Committee's evaluation results, makes the final decision and notifies the applicant.
    • Entering into an agreement : KOFIC and the recipient enter into a grant agreement.
    • Final application : The recipient submits the final application and the supporting documents such as the audited statement of expenditure, the certificate of subsidy settlement report, and the Review Committee makes the final decision on the eligibility and the final grant amount.
    • Grants awarded : KOFIC deliberates on the final evaluation results of the Review Committee and makes the payment to the applicant.
(2) Provisional Application
  • The Applicant must submit the following documents no later than 30 days and no earlier than 90 days prior to the commencement of the principal photography in Korea
Provisional Application
On-line submission
  • ① Provisional Application (KOFIC Form)
    • - Applicant information and foreign production company's information
    • - Synopsis
    • - List of locations for the shoots, languages, director, confirmed cast, production staff and all technical equipment providers
  • ② Overall Shooting Plan in Korea
  • ③ Copy of the applicant's business registration, copy of the corporate registry and certificate of registration either as a film producer, a video producer, or an independent broadcasting producer
  • ④ The foreign production company's business registration and corporate registry or its equivalent
  • ⑤ Summary of estimated budget and detailed budget outline of production costs to be spent in Korea (KOFIC-recommended form; fill out all major/minor categories)
  • ⑥ The final script and its Korean translation
  • ⑦ Director filmography along with data of box office releases and scores, theatrical revenue, film festival awards etc.
  • ⑧ Talents(leading and supporting actors) along with data of box office releases and scores, theatrical revenue, film festival awards etc.
  • ⑨ Producers, writers and cinematographer’s filmography along with data of box office releases and scores, theatrical revenue, film festival awards etc.
  • ⑩ The total production costs financing plan prepared by the foreign production company (KOFIC Form)
  • ⑪ A copy of the investment agreement from the foreign production company and its notarized Korean translation
  • ⑫ A copy of the production service agreement between the applicant and the foreign production company, and its notarized Korean translation
  • ⑬ Pledge of Non-sexual offences record (KOFIC Form)
  • ⑭ Pledge of sexual offences prevention (KOFIC Form)
  • The applicant may not apply for an amount exceeding the amount estimated to spend in Korea stated in the production service agreement.
  • In the event that KOFIC requests additional documents, the applicant shall submit the documents within 5 days. Any delay may result in cancellation or deferral of the application.
  • KOFIC shall convene the Review Committee which then shall evaluate the application documents and decide on the applicant's eligibility, approve or disapprove the grant, and the grant amount.
  • The Review Committee shall set the grant amount within the total program budget remaining on the evaluation date.
  • KOFIC shall deliberate upon the evaluation results of the Review Committee and make the final decisions and notify the applicants accordingly. KOFIC shall have the final authority on the eligibility and the amount, and its decision is not subject to appeal. However, provided that an application previously rejected has been edited to meet the requirements, may be resubmitted.
  • In the event that the applicant selected for provisional support withdraws its application more than two times, the Review Committee may exclude such work from consideration.
  • In the event that the applicant got the development and production support from KOFIC for the same work, the Review Committee shall exclude such work from consideration.
  • If the applicant is in the period of sanction due to the violation of the rules and regulations of KOFIC or agreements with KOFIC, the Review Committee shall exclude such work from consideration.
  • The applicant must be debt-free with respect to KOFIC before the provisional application is submitted.
(3) Enter into an agreement & Register on a Integrated Management System for the Government Subsidy
  • The applicant and KOFIC shall sign an agreement within 2 weeks after the results of the provisional application process are announced.
  • Three (3) copies of the agreement shall be submitted, one of which shall be notarized at the applicant's expense.
  • In interest of an efficient allocation of the program budget, if the principal photography in Korea does not commence within 3 months after entering into the agreement, KOFIC may cancel the agreement and the grant.
  • The applicant must register the contents of the subsidy execution and settlement in ‘Integrated Management System for the Government Subsidy’ established by The Ministry of Strategy & Finance of Korea.
(4) Interim Partial Pay-out
  • If deemed necessary, the applicant may request a one-time partial settlement of the grant before the production is completed by submitting a few documents including a certificate of performance bond and an audited expenditure statement for the costs incurred thus far.
(5) Final Application
  • The applicant shall complete the production within 12 months after submitting the provisional application, and submit the final application and other supporting documents below within 3 month after the production is complete in Korea. Submission period can be extended upon the parties' mutual consent
Final Application
On-line submission
  • ① Final Application (KOFIC Form)
    • - Synopsis
    • - List of locations for the shoots, languages, director, all cast, all production staff and all technical equipment providers
  • ② Daily shooting report
  • ③ Summary of total production costs, and detailed breakdown of total production costs spent in Korea (KOFIC-recommended form; fill out all major/minor categories)
  • ④ The final script and its Korean translation
  • ⑤ The total production costs financing plan prepared by the foreign production company (KOFIC Form)
  • ⑥ The audited expenditure statement (on the KOFIC-recommended form) and the certificate of subsidy settlement report
  • ⑦ The distribution / exhibition agreement or any certificate of such distribution / exhibition, and its notarized Korean translation
  • ⑧ Bank records (one copy) of foreign currency transfers by foreign production company
  • ⑨ Confirmation of completion the class for sexual offences·sexual harassment prevention (KOFIC Form)
  • ⑩ The condition report on Production staff wage
  • ⑪ Statistical data on participant gender ratio (KOFIC Form)
Off-line submission
  • ① DVDs containing the cuts shot in Korea
* Following documents must be resubmitted in the event of any changes to the original application:
  • Applicant information and foreign production company information (KOFIC Form)
  • The applicant's and the foreign production company's business registration and corporate registry or its equivalent
  • The applicant's certificate of registration as a film producer, or a video producer, or an independent broadcasting producer
  • A production service agreement between the applicant and the foreign production company, and its notarized Korean translation
  • Distribution/exhibition agreement
    • In order to prove that the production is complete and therefore the work is ready for theatrical exhibition, television broadcasting or on-line streaming, the recipient must submit the work with the credits attached.
    • In the event that the production is not completed, digital files or DVD must be submitted in the form of the edited version that is equivalent to the final version.
    • In the event that the digital files or DVDs are not provided, KOFIC shall be allowed to attend the screening of the work.
    • A distribution/exhibition agreement between the foreign production company and local distributors or a certificate thereof shall be submitted.
  • Audited Statement of Expenditure & Certificate of Subsidy Settlement Report
    • In accordance with the Article 27 of the Subsidy Management Act and the Article 12 of the Enforcement Decree of the Subsidy Management Act, the recipient must submit an audited statement of expenditure and the certificate of subsidy settlement report on all claimed QPEs and the auditors as is qualified by the Article 3 of the Act on External Audit of a Corporation must meet the following requirements :
      • Shall not be the recipient's shareholder, investor, full-time officer, employee or employer
      • Shall not be subject to the restrictions under Article 33 of the Certified Public Accountant Act
    • The auditor shall certify on the expenditure statement that (1) he meets the aforesaid qualifications; and that (2) he has thoroughly fulfilled his auditing role by checking whether production expenses spent in Korea have been administered in accordance with the KOFIC Location Incentive ‘Standard for Qualifying Production Expenditure’ and the support documentation has been lawfully prepared. The auditor shall also state the total amount of the QPE, and shall attach the following documents as well as the audit report in accordance with the guideline for Verifying of the Subsidy Settlement Report and the detailed criteria of auditing the subsidy recipient, as it is stated in the guidelines for Managing the Operation of Governmental Subsidies(Ministry of Strategy and Finance, 2017 June 1):
      • Summary of production expenses spent in Korea (KOFIC-recommended form; fill out all major categories)
      • Detailed expense report of production expenses spent in Korea (KOFIC-recommended form; fill out minor categories)
      • Detailed expense report referred to the final application (KOFIC-recommended form; prepare in the order of major, intermediate, and minor categories; fill in the dates, recipients, amounts, and method of payment; and print out each major category separately).
        * All of the above must be submitted in soft copy (e.g. Microsoft Excel)
  • Expense Report of the Total Production Costs
    • The recipient must submit an expense report on the total production costs prepared by the foreign production company in order to prove that more than 80% of the total production costs were drawn from foreign capital.
    • As to the production costs not yet disbursed by the date of the aforementioned report, the foreign production company must state the amounts and their uses in the report.
  • In the event that KOFIC requests additional documents, the applicant shall submit the documents within 5 days. Any delay may result in cancellation or deferral of the application.
  • KOFIC shall convene the Review Committee which then shall evaluate the application documents and decide on the eligibility and the final grant amount, taking into consideration of the ""tourism expansion", "quantitative contribution", "foreign engagement", and fiscal feasibility.
  • If the actual production proceeded differently from the plan set forth in the provisional application and the Review Committee does not find the changes reasonable, KOFIC may cancel the grant.
  • KOFIC shall deliberate upon the evaluation results of the Review Committee and make the final decision and notify the applicants accordingly. KOFIC shall have the final authority on the eligibility, and its decision is not subject to appeal.
3. Others
A. Procedure and Method of Subsidy
  • KOFIC shall send the grant to the applicant’s bank account in accordance with the finalized production costs, check on whether the grant has been used for the original purpose during final support evaluation, and may determine whether to grant depending on the results.
  • The grant shall be managed and executed by using a separate bank account and deposit account of the ‘Integrated Management System for the Government Subsidy’, and the grant shall be executed and settled in accordance with the regulations established by KOFIC.
  • The applicant shall submit the documents required for granting by KOFIC and documents required for confirmation on necessary procedures.
  • The grant shall be made upon a separate application after signing a contract. However, in case of reasons for redeeming after granting, the principal will be redeemed with a separate disciplinary measure.
B. Execution of Subsidy
  • The applicant shall execute and settle in accordance with the regulations established by KOFIC.
  • The applicant shall submit required documents and bank account transaction details in ‘Integrated Management System for the Government Subsidy’, so that KOFIC can check on the granting.
  • KOFIC may inspect on execution and settlement of grant and may request the Third Party of the inspection if necessary. In this case, the applicant shall respond actively.
  • The applicant shall not use the grant on certain types of business such as clubs and bars where the corporate card use is limited.
C. Duty to Notify for Approval
  • The applicant shall get the approval from KOFIC in case of significant changes as follows.
    • Change on contents due to changes in the situation, extension of the period, or change in the distribution of costs required for the project (including the project change).
D. Command of Execution
  • The applicant shall fulfill the support project in accordance with [Subsidy Management Act], Enforcement Decree of Subsidy Management Act, [Guidelines for Managing the Operation of Governmental Subsidies] by Ministry of Culture, Sports and Tourism, [Regulations on Film Development Fund and Subsidy Management] of KOFIC, and other accounting-related legislations and delivery conditions. If the applicant fails to fulfill the project in accordance with legislation, decisions on granting, or KOFIC’s regulations, KOFIC may issue necessary orders or investigate the applicant.
E. Carryforward
  • Carrying the subsidy forward is not allowed in principle. However, in case of subsidy carried forward due to inevitable reasons, carrying the subsidy forward for 3 fiscal years is not allowed.
F. Cancellation on Granting
  • In case of applying to Article 21 of [Subsidy Management Act], violating the subsidy granting conditions, or applying to any of the following Sub-Paragraph, KOFIC may cancel all or part of the final decision if any of the following acts are found.
    • If the applicant filed a false application or received grants by unlawful means.
    • If the applicant used the grants for other purposes.
    • If the applicant violated the rules or legislation, violates KOFIC’s measures taken in accordance with granting conditions or legislations, fails to fulfill the duties specified in the agreement, or violates terms and conditions of subsidies presented by KOFIC.
    • If the preconditions directly related to the grants are not met after approval.
    • If the applicant received the subsidy from other institutes or private organizations with the same or similar project plans.
    • If the results for submission of performance repot and subsidy settlement are unsatisfactory
    • If the applicant loses the ability to perform the project or if the copyright is voluntarily transferred to the Third Party.
    • If the applicant fails to handle the matters on closing, default on national tax and local tax, and credit default.
    • If the person sentenced to imprisonment or medical treatment and custody disposition in accordance with Article 2 of [Act on Special Cases Concerning The Punishment, Etc. of Sexual Crimes] (the person whose sentence in accordance of Article 7 of Act on the Lapse of Criminal Sentences has not been lapsed yet) is the member of the work or group (except the case where the person is simply a member not involved in representation or business execution authority or decision-making process).
    • If the person is sentenced to imprisonment or fine in accordance with Sub-Paragraph 2, Paragraph 2, Article 37 of [Equal Employment Opportunity and Work-Family Balance Assistance Act] (the person whose sentence in accordance of Article 7 of Act on the Lapse of Criminal Sentences has not been lapsed yet).
    • If the applicant violated Article 17 of 「Children Welfare Act」.
G. Disciplinary Measure and Punishment for Cancellation on Subsidy Granting Decision
  • If the granting decision is cancelled due to non-fulfillment of duty or illegal receipt of grants by the applicant, following disciplinary measure and punishment may be sentenced in accordance with [Subsidy Management Act].
    • Return of grants and interests in accordance with Article 31 of [Subsidy Management Act]
    • Exclusion from performance in accordance with Article 31-2 of [Subsidy Management Act]
    • Penalty (up to 5 times the subsidy) in accordance with Article 33-2 of [Subsidy Management Act]
    • Announcement of the list in accordance with Article 36-2 of [Subsidy Management Act]
    • Rules in accordance with Article 40 or Article 41 of [Subsidy Management Act]
H. Matters Regarding Guideline on Standard Wage and Use of Contract Form
  • In accordance with Article 3-3 of [Promotion of the Motion Pictures and Video Products Act], the applicant must submit ‘Inspection Material’ (Annex) requested by KOFIC for the preparation of guidelines on the standard wage for staff in reporting the project results.
  • If film producer or film production company applying for the project fails to pay the wage to the staff, violates Article 3-4 (specification of labor conditions in signing the labor contract), or fails to follow the standard form in accordance with Paragraph 1, Article 3-5, KOFIC may exclude the film producer or film production company from the project review in accordance with Article 3-8 of [Promotion of the Motion Pictures and Video Products Act]
    ※ (Annex) Payment of Wage for Staff
  • According to the increase in the minimum wage in 2021, the applicants must reflect the following on the wage for staff.
    • Per Hour ; Increase from KRW 8,590 in 2020 to KRW 8,720 in 2021
    • Monthly Pay (209 hours) ; Increase from KRW 1,795,310 in 2020 to KRW 1,822,480 in 2021
I. Matters Regarding Prevention of Sexual Offence at Film Production Site and Gathering of Basic Gender Equality Policy Materials
  • The applicant (main participants including producer, director, camera director, producer) shall submit a ‘Certificate’ (Annex) to clarify that main participants have not been sentenced to a fine or more by sexual offense and have not been involved in ‘Sexual Harassment at Work’ defined in Article 2 of [Equal Employment Opportunity and Work-Family Balance Assistance Act].
  • KOFIC may cancel the support when the applicant is later found to be sentenced to imprisonment or medical treatment and custody due to sexual offense. KOFIC may also cancel the support when the applicant is under indictment or trial for the sexual offense and confirmed to be sentenced to imprisonment or medical treatment and custody later.
  • Before starting the project, all participants (producer, director, camera director, leading actor, and CEO) of the applicating company shall submit the ‘Pledge of Sexual Offences and Sexual Harassment Prevention and Supervision During Production Period (Annex)’ and ‘Confirmation on Completion of Class (KOFIC supports the expenses for the class) for Sexual Offences and Sexual Harassment Prevention (Annex)’.
  • The film producer or film production company applying for the support project shall specify the genders of the representative applicant and main participants (producer, director, writer, leading actor) in the application form for the support project.
    ※ The gender data is utilized only for the actual condition investigation to establish the Korean film gender equality policy and the gender ratio will not be open to the Review Committee members during the review on the support project.
  • In reporting the support project results or submitting the settlement documents, the applicant must submit the statistical data on participant gender ratio (Annex) required by KOFIC.
    ※ (Annex) Records on Sexual Offences or Sexual Harassment
    ※ (Annex) Statistical data on participant gender ratio
J. Provision and Utilization of Information for Research and Policy Development Purpose
  • KOFIC may use the information related to film work (or film made based on the support project) acquired in fulfilling this clause for research and policy development purposes. Upon receiving the requests on providing the information, the recipient shall submit the related materials to KOFIC.
K. Protection of Child and Youth’s Human Rights
  • When an applicant legally hires a person under 18, it shall provide separate care to guarantee a right to learn, right to rest, and safety right. The support project may be canceled when the business violates prohibited acts from Article 17 of Children Welfare Act (Damaging youth’s psychological health and development, mandating circus which may harm youth’s health or safety under the purpose of public entertainment or promotion).
L. Health Right of Worker and Safety Supervision Duty
  • The applicant shall not expose film-related workers to acts harmful or dangerous to health and shall provide a sanitary and safe work environment. The applicant shall provide separate safety equipment if necessary and shall have a duty to take immediate measures such as appropriate compensation in case of accidents that occurred at work.
M. Indication of Credit
  • If the applicant gets cinematized and released, the recipient must indicate the fact that the work is supported by KOFIC (download a prescribed form from KOFIC website) on the promotional materials and the film and shall get prior approval from KOFIC.
  • With the support of the KOFIC Location Incentive / KOFIC’s logo
    With the support of the KOFIC Location Incentive
N. Submission of Distribution Results
  • The applicants must submit two(2) DVDs of the final cut after completing film production and/or after the release.
  • After completing film production, the applicant must submit the distribution results including the release in overseas theaters, televisions or release via online.
O. Composition of Review Committee
  • KOFIC shall construct a Review Committee consisting of no more than 7 people (from or outside of KOFIC) who shall decide on the eligibility, whether to reward the grant, the feasibility of the budget and its actual administration, and the grant amounts.
  • KOFIC shall accept only those provisional applications accompanied by sufficient support documents, and the Review Committee shall evaluate the applications in the order of acceptance.
  • The Review Committee may make additional document requests to the applicant through KOFIC for a detailed evaluation. The evaluation shall take place only when the applicant submitted all required documents.
For more information, please contact:
Team
  • International Relations Team
Manager
  • Ms. KIM Jo eun
E-mail
  • kimgood92@kofic.or.kr
Download
Download
KOFIC Location Incentive Guidelines 2021
Standard for Qualifying Production Expenditure 2021
KOFIC Location Incentive AD