Film production companies registered in Hong Kong that are creditworthy i.e. without bad loan, and have produced at least two films in the past ten years for commercial theatrical release in Hong Kong before applying for guarantee under the scheme. For newly formed companies with no track record, the same experience of the producer or the director of the film will count.

Guarantee of not more than one film for each film production company at any one time. The company (i.e. the company directors), the producer and the film director will be regarded as a single entity.

The film production company cannot be a related company of the PLI or the company engaged to provide the completion arrangement.

Criteria for film production proposals -

1. at least 50% of the major cast and film crew are Hong Kong permanent residents (The major cast and film crew include the following production roles ¡V i) film director; ii) screenwriter; iii) leading actor; iv) leading actress; v) supporting actor; vi) supporting actress; vii) producer; viii) cinematographer; ix) editor; and x) art director.); and

2. the film is a feature film for commercial theatrical release in Hong Kong.

Equity of a minimum of 30% of the budget for film with budget not exceeding $7.5 million, OR equity of at least $2.25 million for film with budget exceeding $7.5 million, by the film production company.

Loan of not more than 70% of the budget for film with budget not exceeding $7.5 million OR $5.25 million for film with budget exceeding $7.5 million, by the PLI under the guarantee.

Guarantee of 50% of the loan by FGF i.e. a maximum of 35% of the budget or $2.625 million, whichever is the less.

Film completion arrangement for the film secured prior to applying for the loan guarantee.

Shooting of any part of the film has not commenced.

The Fund and the PLI concerned will have the first call on any income received or proceeds recovered from the film for repayment of the loan. Any loss arising from the film will be first accrued to the equity provided by the film production company.

The film production company has to assign all of the rights of receivables of the film to and arrange a charge over all copyrights in favour of the PLI until the loan has been repaid. The PLI will share the rights with the Government in accordance with the risk sharing ratio of the loan guarantee when the PLI calls the guarantee payment from the Government.

The loan under guarantee to be used wholly and exclusively for the production of the film under guarantee.

Use of the loan under guarantee to repay any other loan is disallowed.