Independent Films - 'Tickets to America' For Foreign Investors
For a foreign investor who wants to come to the U.S., a purchase of a U.S. film maker’s screen play may end up being a “ticket to America.” A strategy involving the sale of a film script as the initial basis for an investor visa application makes sense because it not only helps the foreign investor and his or her family to qualify to come to America, but also helps the American independent film maker get his or her film made. The new approach combines current cutting edge tax planning with an advanced strategy to facilitate E-2 and L-1 foreign investor visas to quickly come to the U.S. Instead of waiting for years, (such as in the case of Chinese investors who now must wait over a decade to immigrate to the U.S.,) with this strategy foreign investors can enter the U.S. within a matter of months. What is more important, this strategy will cost far less than the now popular but far more demanding and somewhat distressed EB5 program which is about to be reshaped with even more stringent financial requirements, including a moratorium of 120 days on new filings, an increase in the minimum investment required and more jobs to be created.
In a previous article I focused on Chinese investors and the use of the L-1 inter-corporate transferee visa to move to the U.S. with their family. In this article I would like to focus on the E-2 visa for investors from other countries who can use this cutting edge thinking to come to the U.S.
The E-2 requirements are set out below in point form:
- The investor must be a citizen of a country that has an investment treaty with the U.S. There are over 100 such countries, but the list excludes Brazil, Russia, India and China, (the BRIC countries) as well as Israel at the moment. Investors from these latter countries would need to go the L-1 visa route.
- The investment must be substantial. In my previous article I talked about an investment of $ 400,000 U.S. to purchase a script, that would almost certainly qualify. Investments of smaller amounts, even below $ 100,000 U.S. have been known to receive approvals, but this is dangerous territory.
- Speculative or idle investment does not qualify. Uncommitted funds in a bank account or similar security are not considered an investment.
- The investment must generate significantly more income than just to provide a living to the investor and family, or it must have a significant economic impact in the U.S. I believe film making is a field inherently significant to America and may very well receive favorable treatment in this category, although it is not a guaranteed way to get the E-2 visa.
- The investor must have control of the funds, and the investment must be at risk in the commercial sense. Loans secured with the assets of the investment enterprise are not allowed. Purchasing a film script as part of the E-2 strategy would usually satisfy this point.
- The investor must be coming to the U.S. to develop and direct the enterprise. If the applicant is not the principal investor, he or she must be employed in a supervisory, executive, or highly specialized skill capacity. In the case of a film E-2 application, the investor would probably be involved in pre-production and securing foreign distribution rights for films.
Applying for the Visa
Applicants for visas generally apply at the U.S. Embassy or Consulate with jurisdiction over their place of permanent residence of the investor. Each application for a E-2 visa includes:
Online Nonimmigrant Visa Electronic Application that initiates the process.
A passport valid for travel to the U.S. and with a validity date at least six months beyond the applicant's intended period of stay in the U.S.
A business plan outlining what the business will be doing over the course of the next five years, including income and expense projections. This is the key document that the attorneys prepare for the film financing strategy.
Application Document Requirements
The application must be filed with the appropriate fee payment, and evidence that:
The applicant must control the enterprise, usually by showing ownership of at least 50% of the company.
If the applicant is not the principal investor, he or she must be employed in an executive or supervisory capacity – such as where the son of the investor applies to get the E-2 visa and come to America.
Approval and Processing Time
In most cases the visas are granted for five years and may be renewed in five year increments indefinitely.
Spouses and unmarried children under 21 years of age, regardless of citizenship, may receive derivative E visas in order to accompany the principal visa holder.
Both the L-1 and the E-2 visas afford investors very significant benefits in the spread between resident tuition and foreign student tuition for their children. Over a four-year bachelor’s program of say $ 40,000 U.S. per year, that would amount to $ 160,000 U.S. per child. Also, spouses can work for the company. If investors take advantage of various state tax credits and subsidies open to film makers, they can substantially reduce their costs as well.
- New York
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