[Edaily Starin YUN GI BACK Reporter] Will a new channel for private investment emerge in the Korean film industry, where even works by world-renowned directors are struggling to attract domestic investors?

Director Lee Chang-dong proposed to President Lee Jae-myung the adoption of “SOFICA,” France’s film and video industry investment system, drawing attention to the possibility of “Korean-style tax incentives for film investment.”
During a roundtable discussion with filmmakers held in France on the 7th (local time), Director Lee noted that France has operated the SOFICA system—which provides tax incentives to film investors—for 40 years, and highlighted the need to introduce it in Korea. President Lee also expressed his intention to have relevant government agencies look into the system.
SOFICA is not a system in which the government directly subsidizes film production costs. Rather, it consists of specialized financial companies that invest in the film and video sectors; when private capital, such as that from individual investors, acquires shares in these companies, it is eligible for income tax reductions under certain conditions. According to the French National Center for Cinema and the Moving Image (CNC), since its introduction in 1985, approximately 2.5 billion euros (about 3.9024 trillion won) have been raised and invested in some 3,500 film and video productions.
The basic tax reduction rate is 30%. If a SOPICA meets certain requirements—such as investing a specified percentage or more directly into a production company’s capital—the rate rises to 36%; if additional investment requirements are met, it can increase to a maximum of 48%.
In exchange for these tax benefits, certain conditions apply to the investment targets. According to the CNC, for investments made in 2026, SOPICA funds have committed to allocating at least 91% of their non-affiliated investments to independent production and distribution. They have committed to allocating 74% of their film investment to projects with production budgets under 8 million euros (approximately 12.4 billion won) and 35% to films by directors making their first or second feature.
In essence, the government designed the program so that, in exchange for reduced tax revenue, private capital would flow toward low- to mid-budget and independent films—which typically face greater difficulty securing funding in the market—as well as works by first-time directors.
The results have been significant. Films such as *Anatomy of a Fall*, winner of the Palme d’Or at the Cannes Film Festival; *Dahomey*, winner of the Golden Bear at the Berlin International Film Festival; and *Flow*, winner of the Academy Award for Best Animated Feature, all utilized SOFICA investments. According to the CNC, approximately 73 million euros (about 113.9 billion won) has been raised for investments in 2026 as well.
South Korea also offers tax incentives for audiovisual content. Under the current system, production companies in the film, broadcasting, and online video service (OTT) sectors can deduct a portion of their production expenses from corporate or income taxes. For small and medium-sized enterprises (SMEs), the basic deduction rate is 15 percent, and they can receive additional deductions if they meet certain domestic production requirements.
The biggest difference from SOPICA lies in who receives the benefits. While the South Korean system alleviates the production cost burden on “creators,” SOPICA reduces the investment risk for “investors” through tax incentives. It is a structure designed to attract private capital into the film market rather than relying on government finances or policy funds.
This ties in with the investment crisis currently facing the domestic film industry. Director Lee’s new film, *Possible Love*, was ultimately produced with Netflix investment after failing to secure domestic investors. The reality that even a world-renowned director struggles to secure domestic film capital highlights the frozen state of the investment market.
If a Korean version of SOPICA becomes a reality, the key issue is likely to be “where to direct investments” rather than the magnitude of the tax incentives. Unless, as in France, a certain investment ratio is mandated for independent, low-to-medium-budget films and works by new directors, there is a risk that tax incentives could be concentrated on large-scale productions with high box-office potential.
Other challenges that need to be addressed include tax law amendments, potential revenue shortfalls, and the coordination of roles with existing seed funds and tax credits for audiovisual content production costs. On the other hand, some observers suggest that—unlike the traditional approach of increasing production subsidies—this could serve as a new policy tool for the Korean film industry, which is facing an investment cliff, by attracting private capital directly into the film market.
Given that President Lee has mentioned a review by relevant ministries, it remains to be seen whether SOPICA—which has been in operation in France for 40 years—will actually make it onto the table for South Korea’s film policy.