Where Films Shoot Now: Treaties, Offsets and the New Hubs

A co-production treaty is not a tax incentive, and conflating the two is the most common expensive mistake in international financing. A treaty determines whether your film is national in two countries at once. An incentive determines how much money comes back. You usually want both, and they are negotiated in different places.

What does a co-production treaty actually do?

It lets a film qualify as a domestic production in each signatory country, which unlocks each country's national funding, broadcast quotas and incentives simultaneously. That is a different and often larger benefit than a rebate, because it opens doors that money alone cannot.

The UK leads globally with 43 bilateral co-production treaties, alongside a 34% BFI Film Tax Relief rate. That combination — treaty breadth plus a competitive relief rate — is why the UK remains one of the most active production hubs in the world despite not being the cheapest.

Which territories have the strongest incentives?

Australia's structure is worth understanding properly because it is three separate offsets, not one. The producer offset applies to eligible Australian features; the location offset targets qualifying international productions shooting there; the PDV offset covers post, digital and visual effects work done in Australia regardless of where principal photography happened. A production can be structured to use the PDV offset without shooting in the country at all.

Where is capacity actually growing?

Two answers: Asia and the Gulf.

South Korea and India are described as the two fastest-growing co-production hubs in Asia, driven by streaming demand and new bilateral treaty activity. India's case rests on the combination of a 1.4 billion-person domestic market, the world's largest film output by volume, a competitive incentive regime, and increasing international streaming deal flow.

On infrastructure, Sharjah Media City has launched Shams Studios with 9,600 square metres of purpose-built soundstages, aimed explicitly at international producers from the UK, US and India as studio space shortages persist in North America and Europe.

How does this connect to the US production decline?

Directly. Incentive-rich markets including the UK, Ireland and Eastern Europe gained share while US production hubs experienced sharp declines. The 73,000 US production jobs lost since 2022 and the growth in these territories are two views of the same movement.

For US-specific state incentive competition, film tax incentives in 2026 covers the domestic picture. This piece is about what happens when you leave.

What should a producer actually do with this?

Three checks, in order:

1. Check treaty coverage before incentive rates. A treaty is structural; a rebate rate can change with a budget cycle. If your financing partners are in a treaty country, that shapes the whole structure.
2. Separate the offsets. Australia's PDV offset shows that post can be located independently of the shoot. Do not assume the whole production has to move.
3. Check capacity, not just rate. A 40% rebate is worth nothing if there is no stage available in your window — which is precisely the gap new entrants like Shams Studios are targeting.

If you are hiring locally in a new territory, where the film jobs went covers the labour side, and you can scout crew by city directly.