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Increasing investment in independent films is providing foreign investors with a ticket to an E2 treaty investor visa and access to the United States, according to a Forbes report. Purchasing a US filmmaker’s screen play could lead to a coveted E2 US visa.
Sanwar Ali workpermit.com comment:
I think the Forbes report may be exaggerating the benefits of investments in independent films to obtain an E2 visa. It does seem to be very expensive. There is also the risk that you could lose all your money. Prospective E2 investors may wish to consider cheaper options as well costing say tens of thousands of dollars instead of hundreds of thousands of dollars. Perhaps some of the time people selling these expensive E2 visa schemes are doing so because they can make more money out of these type of schemes compared to cheaper E2 US visa routes.
There is also the E1 Treaty Trader visa scheme which may be worth considering. This is based on substantial trade rather than substantial investment. It should be noted that the E2 visa and E1 visa schemes are only available for certain nationalities. For example, Indian and Chinese nationals cannot apply for these visas unless they are married to nationals of E2 and E1 visa countries.
According to the Forbes report an application for an E2 treaty investor visa involving investment in an independent film script is a great strategy. He said: “It makes sense because, a foreign investor - along with their family - not only qualify for US entry, but an independent American filmmaker gets their film made too.”
This new method of securing a US visa combines current, cutting-edge tax planning with a clever way to aid foreign investors to obtain E2 and L1 visas for quicker entry into the US. Rather than having to wait for years, which is the case for Chinese investors who face waits exceeding a decade, this tactic can see foreign investors granted US entry within months.
Reduced costs for a US foreign investor visa compared to EB5 immigrant investor
In addition to providing quicker entry, investing in an independent film as part of an L1 visa or E2 investor visa application is far more cost-effective than the stricken EB-5 immigrant investor programme. The EB-5 visa is currently facing a crackdown amid alleged abuse of the system by foreign investors.
Widespread reports indicate that the EB-5 programme will be hit with even more, heavily stringent financial requirements – including a 120 day processing time for new applications, a rise in the minimum investment needed, plus a requirement to create more full-time jobs for US workers (currently set at 10).
Eligibility criteria for an E2 treaty investor visa
- In order to qualify for an E2 treaty investor visa with an investment in an independent film, applicants must be a citizen of a country that has an investment treaty agreement with the US. More than 100 countries have an existing agreement with the US.
However, the BRIC countries (Brazil, Russia, India and China), plus Israel currently don’t have a treaty investment agreement in place. Israel is in the process of agreeing a deal, but years of delays have so far scuppered any agreement. Investors from countries with no deal with the US will need to pursue an L1 visa.
- A substantial investment is needed. It is estimated that a minimum of $400,000 is needed to purchase a film script, which would be enough to meet the financial requirements of an E2 treaty investor visa. Smaller investment amounts of around $100,000 have been approved, but it’s a risky strategy
- Your investment must be ‘active.’ Speculative or idle investment is ineligible. The promise of funds in a bank account or a similar type of security will not be deemed an investment. You must have the money or assets available.
- There must be a return on investment beyond that of providing a living for an applicant and their family or there must be a substantial economic advantage for the US as result of invested funds.
The film industry is favoured in the US, so an investment in this category has a higher chance of being accepted, though it’s not guaranteed to result in an E2 visa.
- Investment funds or assets must be controlled by the applicant. Loans secured against the assets of an investment company are prohibited. However, investing in a film script will typically meet the necessary criteria.
- An investor must be coming to the US to grow and direct the enterprise. If an applicant is not the primary investor, they must be hired in a supervisory, executive, or highly specialized skill capacity.
For an independent film-based investment this would typically be an involvement in pre-production and gaining foreign distribution rights for films.
How to apply for an E2 treaty investor visa
Typically, an applicant will need to attend a US Embassy or Consulate in their home nation. An E2 visa application includes the following:
- An Online, Nonimmigrant Visa Electronic Application that starts the process.
- A passport that’s valid for travel to the US and remains valid for at least six months after an applicant’s intended duration of stay in the US.
- A business plan detailing what the enterprise will be doing over the course of the next five years, including income and expense projections. This is a key document that is prepared as part of the film financing strategy.
In the report it is suggested that in view of the investment requirements, processing times, the strict criteria, the tax issues and scrutiny surrounding the EB-5 immigrant investor programme, the L1 and E2 investor visas represent a much more accessible route into the US when investing in independent films.
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