As the movie industry shifted from shooting with film to digital cameras, Vancouver couple Paul St. Amand and Maja Zdanowski recognized a need for a mobile post-production facility where producers and directors could screen each day’s shots on set.
Mr. St. Amand had worked as a producer in TV and film for more than a decade, and Ms. Zdanowski had expertise in post-production work on big budget movies including TRON: Legacy and Resident Evil: Afterlife.
They launched Cosmic Post Inc. in 2011 with a couple of partners and $1-million in private equity and vendor financing. They had created a high-end studio in a 40-foot trailer outfitted with state-of-the-art equipment where producers, directors and directors of photography could see what they will get in theatres in 2-D and 3-D without having to travel off the set, thus saving time and money.
But immediately after they launched, the British Columbia film industry took a dramatic downturn.
“Things started to change quickly,” notes Mr. St. Amand, who is president of Cosmic Post. “Ontario introduced a new tax credit that was an incentive to shoot movies there, and the Canadian dollar was strong, making it less attractive to American companies. This happened right after we launched, and that made it challenging.”
Saddled with significant debt and few opportunities in British Columbia, they decided to look for business beyond Canada.
“We didn’t just sit around and put our heads down. We went for it,” Mr. St. Amand says. Through a producer friend in India, Cosmic Post landed a contract to provide post-digital work for southern India’s first 3-D action film, OM. They couldn’t take their equipment but set up a small mobile facility.
Then Cosmic Post bid on Oblivion, a big-budget movie starring Tom Cruise. In Los Angeles, Mr. St. Amand and Ms. Zdanowski, who is vice-president of post-production and operations, met with the producers, established a relationship and landed the job.
Oblivion would be shot in Louisiana, and the Cosmic Post team learned that the state has a burgeoning film industry. They decided to open a head office in Baton Rouge at the Celtic Media Centre, as well as satellite offices in Vancouver and Los Angeles.
“One of the good things about our business model is that we are mobile,” says Mr. St. Amand. “One of the reasons we went to Louisiana is because it offered incredible tax incentives. The film industry there is growing quickly and there are new soundstages being built.”
Soon after finishing work on Oblivion, Cosmic Post landed a contract for Black Sky, a New Line Cinema tornado disaster movie now in production. “We’ve had nothing but great feedback. So good, so far,” Mr. St. Amand says.
Cosmic Post would like to invest in more mobile post-production facilities so it can be on the ground in the United States and Canadian West and East coasts simultaneously, as well as expand into Europe.
Mr. Amand says it wasn’t difficult to get the required permits to move the business south of the border, but he says it’s important to “do your research and hire a good lawyer.”
Joe Grasmick, a Buffalo lawyer who specializes in Canada-to-U.S. immigration for businesses, agrees that the first step should be to consult an immigration lawyer. “If you get stopped at the border, you can’t do a market study or rent office space. Immigration is the first issue that comes up,” Mr. Grasmick says.
He helps about 100 Canadian businesses a year make the move. There are multiple kinds of permits, and the one you require depends on the nature of your business or service.
“It’s really rare that you would not actually be able to come to the U.S., but it depends on how much paperwork they are willing to do. Some people give up because they think it’s too much work,” says Mr. Grasmick.
Kevin Quinn, a senior executive with the HSBC commercial banking group based in Buffalo, says his team has relationships with more than 1,000 Canadian businesses that have relocated to the United States or expanded operations there.
“The good news is there is a well-established track for Canadian companies to follow and a well-established base of support,” he says. “The U.S. market is very much consumer-driven, and if you have a product or service that has attraction to a U.S. consumer, there is a lot of opportunity.”
He says a wise step is to find a mentor in a Canadian company that has done this.
“Companies that come to the States may not consider interest rate fluctuations, foreign exchange fluctuations and various tax ramifications,” Mr. Quinn says. “All of those situations can be detrimental to your cash flow, and if you haven’t considered those in advance, you might find your product or service accepted, but your company unprofitable.”
Steps to consider
- Contact an immigration lawyer;
- Conduct market research to see if there is an appetite for your product or service;
- Build a team of advisers including an immigration attorney, accountant, banker and customs broker with strong cross-border expertise;
- Consult the Canadian Trade Commissioner Service to see what programs and advice it has to offer;
- Contact local chambers of commerce or economic development departments in the state or area you are considering locating to, to see what tax incentives they offer.
Source: Joseph Grasmick and Kevin Quinn