How the EB-5 immigration visa can aid film financing

Column: Immigration lawyer Lorraine P. D'Alessio discusses the U.S. visa program, which is designed to attract job-creating businesses and can also be used for film projects.

Lorraine D'Alessio headshotBy Lorraine P. D’Alessio

The most common method of film financing – raising money and having it matched by producers and investors in exchange for a cut – is not the only tried-and-true method. Studios both large and small have increasingly used one immigration visa program, the EB-5, to attract foreign investors as a way of diversifying their sources of capital. It’s a lengthy process that requires diligence, but once established, the EB-5 has proven to be a major benefit.

The EB-5 is, in essence, a robust visa that gives a foreign investor and their family the ability to live in the United States with a conditional green card. With a $1 million investment, or a $500,000 investment if it is based in an area with high unemployment, as well as evidence that the investment is creating at least 10 full-time jobs, the visa is alluring for wealthy foreign nationals that don’t fit neatly into other visa categories.

It has seen an influx of investors, particularly from China, looking to lay down roots or park assets in the United States. Facilitating this is the addition of “Regional Centers” – business entities that file for the classification and have the benefit of more lax visa criteria. For example, investors normally have to be directly responsible for 10 created jobs to qualify for EB-5. If they work with a business that is designated a regional center, they can also count indirect jobs creation – jobs created not by their investment, but the result of their investment, like tenants in a building.

Regional Centers can take on any form and can be financiers for any project, such as building construction. The EB-5 has helped financiers raise billions for hotels, restaurants, shipyards and more. But it has also regularly and successfully been used to finance films.

Regional Centers can take years to set up, however. Delays can come from the formulating of a business plan that illustrates the economic impact, accounting for the legality of investor funds, complications in getting money out of strict financial systems like China, and a lengthy adjudication process.

The strict standards of this program tend to ebb and flow and further concern about the risk of fraudulence within the program has seen increased scrutiny from lawmakers. A bill proposed in the United States seeks to increase the standard of evidence in demonstrating that an investor’s funds come from lawful sources, which may lengthen the process or turn away potential investors.

Still, as one financial source among an array of others, it bears investigating. The more diverse your sources are, the better. With this goal in mind, pursuing EB-5 investors, either by forming your own regional center or working with an existing one, is a worthwhile venture.