Balkan Film Co-productions: 5 Costly Mistakes and How to Avoid Them

Here are the five most expensive mistakes I see repeated, and how to avoid them.

MISTAKE #1: “The Contract? Let’s Use Google Translate”

Real Case: A producer from Rome signs a co-production contract with a Serbian company. The Italian version says “exploitation rights shared 50/50.” The Serbian version (the binding language) specifies “all distribution rights in the Balkans belong to the Serbian partner in perpetuity.” Result: impossibility of selling the film in Serbia, Croatia, or Bosnia forever.

Why it happens: Balkan legal systems derive from different legal traditions. Terms like “copyright,” “exploitation rights,” or “distribution” have different legal nuances depending on the jurisdiction.

The Solution: Always use specialized legal translators. The contract must be bilingual with a clear prevailing language clause. Ideally, use an English contract as a neutral language interpreted according to UNIDROIT principles.

• Cost of mistake: €50,000 – 200,000 in lost rights
• Cost of prevention: €800 – 1,500 for professional legal translation

MISTAKE #2: Ignoring Bilateral Treaties

Real Case: An Italian producer co-produces with a Bulgarian partner without formally structuring it as an “official co-production.” Result: loss of €350,000 in Eurimages funds and the 30% Bulgarian tax credit.

Why it happens: Official co-production status is not automatic. It requires registration with respective Film Commissions, minimum participation quotas (usually 20-80%), and prior approval from national authorities.

The Solution: Verify BEFORE shooting if a bilateral treaty exists between Italy and the target country. Structure the co-production according to treaty requirements and apply for certification with the MiC (Italy) and the foreign entity.

MISTAKE #3: “The Local Partner Handles Everything”

Real Case: An Italian producer transfers €200,000 to a Croatian service provider without a detailed contract. The partner misses milestones, and the producer discovers they have no access to local suppliers or guarantees for fund recovery.

The Solution:

• Perform preliminary due diligence on the partner (financial records, references).
• Use a “milestone-based” contract with payments tied to specific deliverables.
• Include an international arbitration clause (e.g., Milan Chamber of Arbitration).

MISTAKE #4: “Shared” Copyright Without Defining WHO Owns WHAT

Real Case: An Italy-Poland co-production. The contract states “shared copyright” but does not specify who can license to platforms like Netflix or who has the “final cut.” The film remains blocked for 2 years due to partner disputes.

The Solution: Insert a detailed clause specifying the “Chain of Title,” decision-making powers over distribution, and an analytical revenue split for every territory and platform.

MISTAKE #5: Assuming “EU = Same Rules”

Real Case: An Italian producer hires a Bulgarian crew thinking there is no bureaucracy. They later discover that Bulgaria requires specific work permits and that social security contributions must be paid locally, leading to tax penalties in Italy due to mismanaged VAT.

The Solution: Seek preliminary cross-border tax advice and verify the professional certifications required in the host country.

The Anti-Error Checklist

• ✅ Contract translated by a legal translator (not Google).
• ✅ Official co-production formal structure.
• ✅ Due diligence on the local partner.
• ✅ Detailed and analytical copyright clause.
• ✅ Milestone-based payments with guarantees.
• ✅ Neutral arbitration forum.

The True Cost of Legal Counsel

Many producers view legal fees as an unnecessary expense, only to lose massive amounts to avoidable errors. Legal consulting in international co-productions is mandatory insurance for your investment.

DANDI.media offers specific packages for Balkan co-productions, covering contract review, due diligence, and tax compliance.

CALL TO ACTION: 📩 Free audit of your co-production contract: send your draft to info@dandi.media