The Audio Visual Industry, as defined for Fiji, encompass the full range of traditional media, new media and digital communications and technologies and, as such, have been described under the categories of:

• Film

• Television

• Video

• Music

• Computer Software

• E Commerce in all forms

• Telecommunications

It is recognised globally that these industries combined constitute the most powerful area of economic growth for the 21st Century.

Yaqara City is perfectly positioned to take advantage of this growth and contribute to the development of production, distribution and marketing in the audio visual industry worldwide.

The Fiji Government has embraced the proposal to introduce the audio visual industry to Fiji through tax incentives and has identified the following: -

• there exists a need to expand the country's economic base beyond its current dependence on the established industries of sugar cane and copra, gold mining, clothing manufacturing, timber production, fishing and tourism;
• that the e-commerce industry specifically, and the computer software and entertainment industries, are global and growing in all sectors.
• that Fiji has the potential to become one of, if not the most, desirable locations for the production and distribution of the audio visual industry products.
  

The introduction of the audio visual industry sectors to Fiji will impact on the economy by: -

• creating a significant boost to employment at both the skilled and unskilled level through providing opportunities in an industry with substantial appeal to young Fiji Islanders, while encouraging expatriate Fiji Citizens to return to Fiji or by attracting otheres to make Fiji their home;
• generating significant foreign exchange both from inflow of production finance and international transactions resulting from the marketing of Fiji copyright owned products;
• creating capital injection for the establishment of necessary industry infrastructure estimated to be valued at over two billion Fiji dollars.

The Government of Fiji has passed legislation which now provides the world's best legislative base for the operations of the audiovisual industries in Fiji. This includes a single administrative government body, the Fiji Audio Visual Commission and the specific Film-Making and Audio-Visual Incentives in the Sixth Schedule to the Income Tax Act (Cap.201) contained in Income Tax (film making and audio-visual incentives amendment) Act No 2 of 2002 and as amended by Bill No 3 of 2003 and by Bill No 6 of 2004.

Fiji's Audio Visual Taxation Incentives

The Film-Making and Audio Visual Incentives in the Sixth Schedule are divided into four parts:

Part I - General

Relates to the role of the Fiji Audio Visual Commission (FAVC) in its capacity to make regulations to prescribe relevant forms and fees.

Part II - Film-Making Incentives

Relates to certain specific film-making incentives by allowing the income qualifying employees involved in film making to be exempt from tax or taxed at a reduced rate.

Part III - Audio Visual Incentives

Relates to incentives for:

• Audio-visual productions;
• The Studio City Zone and
• Taxation Concessions to Residents of the Studio City Zone

Part IV - Film Tax Rebate

Relates to the provision of a 15% tax rebate for certain Fiji Islands qualifying incurred film production expenditure.

Overall, these Taxation incentives are directed towards the encouragement of the development of the following audio visual business activities by way of:

1. Taxation Incentives for Audio Visual Productions

An 'Audio Visual Production' is the production for exhibition or sale, or use in the conduct of business of:-

1. Film, including theatrical, short films and large format films;
2. Broadcast Television, including free-to-air, satellite or pay television or internet broadcast;
3. Video including direct-to-video and video disk program;
4. Audio recordings;
5. Computer Software of all description including R&D (as related to items 1-4);
6. Interactive Websites and e-commerce operations (as related to items 1-4);
7. Telecommunications (as related to items 1-4);

In summary, the following incentives apply:

• A gearing of tax deductibility in the year of capital investment in a qualifying audiovisual production of between 125% and 150% and the first either 50% or 60% of the invested amount recouped is exempt of income tax. These tax deductions are available to all taxpayers in Fiji including foreign companies. The production financing is available to producers of audiovisual material operating in Fiji including wholly foreign owned companies.
  

2. Taxation incentives for the Studio City Zone

The taxation incentives for the Studio City Zone are in summary:

• Lifetime tax free operating status for businesses engaged in a 'production activity' which means 'any activity in the production of, world-wide distribution of, conduct of business in, or supply of services to'

1 Film, including theatrical, short films and large format films;
2 Broadcast Television, including free-to-air, satellite or pay television or internet broadcast;
3 Video including direct-to-video and video disk program;
4 Audio recordings;
5 Computer Software of all description including R&D;
6 Interactive Websites and e-commerce operations ;
7 Telecommunications.

3. Taxation concessions for Residents of the Studio City Zone

• Tax free status for individuals earning income (min F$100,000 per annum) in the audiovisual industry or services to it by way of "income derived from work in Audio Visual Productions or production activities including contracted fees, wages, royalties and distribution of profits from Audio Visual Productions or production activities" and "income from sports performances including prize money, performance fees and endorsements", ie sportsmen and women, who have their principle residence in the "Studio City Zone", make an investment of not less than F$250,000 in either domestic real estate or business assets and resides in Fiji not less than 60 days (non citizen) or 183 days (citizen) per annum in aggregate.

Corporate Objective

The Company's corporate objectives are:

• to promote the development of the audio visual industry in Fiji;
• to manage the development of the "Studio City Zone" in accordance with world's best practice;
• to maximise the economic potential of the "Studio City Zone" for the benefit of Fiji and for shareholders in the Company and landowners;
• to provide shareholders in the Company with attractive returns on capital invested.

Company Activities

The Company, Yaqara Group Limited, is the sole and exclusive holder of the right to develop and operate the "Studio City Zone" in Yaqara, Viti Levu Fiji Islands pursuant to the Income Tax (film making and audio-visual incentives amendment) Act No 2 of 2002 as amended.

The Company has entered into binding lease agreements for the period of 99 years for a site totalling approx. 1800 ha with coastal foreshore and waters of totalling approx. 400 hectares.

The 'Studio City Zone" at Yaqara is government's designated location of the home of the audio visual industry in Fiji. The agreement requires that the development will be carried out according to commercially acceptable world's best environmental standards.

The Studio City Zone

The "Studio City Zone" is the dedicated area in which businesses and individuals must operate or reside to utilise full benefit of the tax advantages available in Fiji.

The existing audio visual industry taxation incentives in Fiji provide the Company and its current and future shareholders with a business opportunity that is, in the opinion of the Company's board of directors, one of the best business and commercial property development in the Asia Pacific Region.And one which ranks favourably with any development anywhere in the world.

What distinguishes the Yaqara City development from other tourist and land development projects is the attractiveness of the package of incentives underpinned by the world's most attractive financial framework for investors and participants in the audio visual industry.

The inclusion of personal tax free status for high net worth individuals who earn their income from the audio visual industry and from international sports establishes the Yaqara City as the only 'non-tax haven' country in the Asia Pacific region to offer such benefits.

Subject to meeting the income, investment and residential requirements, international sports stars from the Asia Pacific Region now have the opportunity of living tax-free in their own domain.

The Company is the promoter and manager of the Yaqara City. As such, the Company will develop the City and promote the audio visual industry in Fiji through a range of financial initiatives including joint ventures which includes identifying individual tenants or developers.

The foresight and innovative approach to the development of the new legislation by the Fiji government provides the Yaqara City with a significant advantage. In providing the audio visual industry with unprecedented benefits, it also allows the people of Fiji an unparalleled opportunity to develop skills and infrastructure with which to compete at an international level.