Baltic Film Boom Meets Cash Shortage as Estonia Opens $18.2M Studio

Estonia opened its $18.2 million Ida Hub film studio complex in mid-October, and industry guests at Tallinn's Black Nights Film Festival will tour the facilities on November 21–22. The opening marks the sharpest edge of a Baltic production boom that now collides with a stubborn shortage of public money.

Edith Sepp, head of the Estonian Film Institute, calls the new complex — twinned with the Tallinnfilm Studios sound stages planned for 2028 — the start of "a whole new era of filmmaking" for Estonia. The country rebuilt its film infrastructure slowly from post-Soviet rubble. It took Christopher Nolan's "Tenet," shot in 2019, to put the smallest Baltic state on the global production map.

Since Estonia, Latvia and Lithuania introduced filming incentives more than a decade ago, demand has climbed steadily, driven by top-tier crews, competitive financial tools and varied locations. Baltic films and co-productions have also gained festival momentum: "How to Divorce During the War" at Sundance, "Ulya" and "Vesna" at Cannes, and the Venice Golden Lion winner "Woman Unknown."

What does Estonia's new studio change?

The Ida Hub complex in Ida-Viru County, partly funded by the European Union, operates as a one-stop shop. It combines two large sound stages of 1,200 and 2,000 square meters with training for next-generation professionals and a tech-driven startup incubator.

"Our vision is to establish Ida-Viru as a recognised and trusted production hub in the Baltic region, while creating tangible economic and professional opportunities for Ida-Viru County," says Teet Kuusmik of the Ida-Viru Investment Agency, one of three partners running the complex alongside the Ida-Viru Business Centre (IVEK) and Tehnopol.

Kuusmik reports growing interest from domestic and international markets. A TV production is in negotiation to film in December, and three larger film projects are under discussion.

By 2028, Tallinnfilm Studios plans a second complex near Tallinn Airport: three purpose-built sound stages totaling 2,630 square meters, plus SFX prop rooms, offices and multifunction rooms over five floors. International tenders for design and construction have opened. Sepp insists studios are "not simply buildings where films are made." She adds: "They create an entire ecosystem around them; they bring investment, create jobs, allow people to specialize and give our own filmmakers opportunities they have not had before. For a small industry, this is our physical home."

Estonia also raised its cash rebate from 30% to 40% in April. The effect was immediate. Within two hours, Film Estonia received 12 applications worth €5.8 million ($6.4 million) in rebates. Another 16 submissions followed between April and October, representing a further €6.4 million ($7 million). "These figures speak for themselves," Sepp says.

Where does the money run out?

For Sepp, Film Estonia's budget cannot meet growing demand. Producer Esko Rips, CEO of Nafta Films and co-producer of the Golden Lion winner and Danish Oscar submission "Woman Unknown," agrees.

"In our experience, decisions [from Film Estonia] are made quickly and the rebate is paid promptly. But the annual cash-rebate budget is limited, so availability can be an issue," Rips says. He notes higher crew and production costs in Estonia compared with Latvia and Lithuania.

As Estonia's State Budget for 2027 is finalized, Sepp is lobbying to raise Film Estonia's annual envelope to €10 million ($11 million). "Times are hard because of the war in Ukraine, no doubt in that. But the economy still needs to grow; otherwise we do not have enough funds to protect Europe," she says.

Why did "Woman Unknown" shoot in Latvia?

Latvia, propelled by the Oscar win for the animated film "Flow" in 2025, has intensified its hunt for foreign money. In late September, a delegation including Nafta Films, Baltic Pine Films, Cinevilla Films and Angels Films Studio flew to Los Angeles to meet representatives of Netflix, Disney, Lionsgate and Paramount. Liene Gulbe, film commissioner at the Latvian Investment and Development Agency (LIAA), led the group.

Rips chose Riga over his Estonian hub for "Woman Unknown" for three reasons: availability at Riga Film Studios, Riga's architecture matching the film's Copenhagen World War II setting, and Latvia's stronger financial package. Combining the national rebate with the Riga Film Fund's incentive can push support to 50% of eligible local costs. Latvia contributed around €2.2 million ($2.4 million) — nearly half the film's budget.

Danish producer Mikael Rieks credits the Latvian crew. "'Woman Unknown' is a quality auteur feature. It was crucial for us not to compromise on the high production value and [director] May el-Toukhy's vision. We trusted Nafta Films and built a mutual language," says Rieks, who previously worked with Latvian co-producer Madara Kalnipa on "Boundless."

Latvia's other assets include the Cinevilla backlot, the largest in the Baltics, Riga Film Studios' sound stages and the LED Unit virtual production studio. In 2025, LIAA paid out more than €3.1 million ($3.4 million) to eligible international projects; Gulbe expects that to climb to €6.9 million ($7.6 million) next year. Thirteen international projects were backed in 2025, versus 16 so far this year.

Forma Pro Films, which partnered with France's CG Cinéma on Andreï Zviaguintsev's "Minotaur," Kristen Stewart's "The Chronology of Water" and Kirill Serebrennikov's "The Disappearance of Josef Mengele," will deliver three star-studded co-productions in 2027:

• Cary Fukunaga's thriller "Blood on Snow," with Aaron Taylor-Johnson, Eva Green and Benedict Cumberbatch
• Albert Serra's "Out of This World," with Riley Keough and F. Murray Abraham
• Bella Thorne's directorial debut "Color Your Hurt"

"We are looking into 2027 with open heart, sleeves up and ready to work," says Forma Pro producer Svetlana Punte.

Dita Rietuma, head of the National Film Centre of Latvia, calls the body's 2027 budget of approximately €6.6 million ($7.3 million) "very limited for a country with an ambitious and internationally recognized film industry." She sees the extra €1 million proposed by the government for 2027 as "a first step, rather than a solution to the structural underfunding of Latvian cinema." The challenge, she says, is turning world-stage momentum into sustainable local development.

How big is Lithuania's record?

Lithuania registered 19 international projects in 2025 under its 30% tax incentive — a private tax shelter, unlike the Estonian and Latvian cash rebates — up from 11 in 2024. A record €25 million ($27.7 million) flowed through the incentive for a total spend of €85.7 million ($95 million).

"Foreign productions benefitting from the scheme spent nearly €56 million ($62.1 million) in Lithuania, also a record amount," says Deimantas Saladžius, head of production and industry at the Lithuanian Film Centre.

Sony Pictures Television's "Star City," the Apple TV+ "For All Mankind" spinoff serviced by Baltic Film Services, secured the scheme's largest grant at €6.9 million ($7.6 million). Separately, 21 co-productions worth €12 million ($13.3 million) in local spend received €3.6 million ($3.9 million). "Beyond the numbers, we see international co-productions as an important opportunity for Lithianian filmmakers to access larger financing structures, exchange creative expertise and reach a wider international audience," Saladžius says.

He describes government-backed planning for a new large-scale film studio in Vilnius as "an important step towards strengthening Lithuania's international competitiveness," citing a potential infrastructure gap that could curtail growth.

The Vilnius Film Fund, Lithuania's first city-level film fund, doubled its submissions from seven to 14 and approved projects from four to eight between 2025 and 2026, according to Jurate Pazikaite, film commissioner and head of the Vilnius Film Office and Film Fund. Eight co-productions tapped its €150,000 ($166,300) budget this year, including "How to Divorce During the War" and Studio Uljana Kim's "Dice-Ching-O-Mat," vying for best Baltic film at Black Nights.

Vilnius, featured in "Chernobyl," hosted 65 commercials and 22 features and TV productions in 2025. "Star City" alone employed around 140 Lithuanian crew members. "The project demonstrated both the city's architectural versatility and its ability to accommodate ambitious productions," Pazikaite says.

What binds the three countries is the gap between private demand and public supply. Studios are rising in Ida-Viru County and, by 2028, near Tallinn Airport. Rebate applications arrive within hours. Whether the 2027 state budgets follow will decide if the Baltic boom becomes an industry built to last.