As Trump And Congress Fail Dreamers, Canada Might Be An Option For Some

President Trump’s March 5th deadline for Congress to come up with a solution for the so-called Dreamers was set aside as legal challenges to the president’s attempt to end the DACA program wind their way up to through the court system. The Dreamers were given this reprieve that made it possible for them to continue renewing their DACA status by a recent ruling of the Supreme Court. Nonetheless, the future is uncertain for these illegal immigrants who came to the United States as children, and many are looking for other options.

Enter Canada.

There is one program that could help at least some Dreamers out of their quandry. It is the Canadian Express Entry Federal Skilled Worker Program. Under that program, an ideal candidate is someone who is in his or her 20s, speaks, writes, listens and reads excellent English, has one year of post graduate work experience in a skilled job and has a masters degree. Such a person would very likely qualify to be invited to apply for permanent residence in Canada.

Express Entry works on a point system grading your age, education, work experience and connections to Canada assigning a point score which you post with your profile. Once you post your profile on line, the Canadian federal government reviews your scores and if they fall into line with what is needed at the time, you are invited to apply for permanent residence. The advertising for the program indicates that the application can be processed within six months and it would lead to Canadian permanent residence. The last Canadian federal government draw invited applicants with a score of 446 or higher to apply. Married applicants are scored on a combined spousal basis. So in theory at least, within six months of applying a Dreamer with the right qualifications could be landed in Canada by applying through Express Entry.

The process involves passing an English language test, (yes, even if you went to a U.S. college that taught in English) and getting your credentials evaluated by an evaluation service like World Educational Services (WES). You can write the English language test at a test site in the United States, which can be located here. Note the test you want is the general test, not the academic one. WES has offices in the USA. (One happens to be in my building in Manhattan.) You can locate where to reach them here.  These two items are the prerequisites for getting started with Express Entry because they are needed to post your profile on line.

There’s one problem, however. It lies in Section 11 of the regulations under the Immigration and Refugee Protection Act of Canada. That section requires an applicant who is applying to immigrate to Canada permanently to apply from the applicant’s home country unless the applicant entered his or her country of residence legally. For those few Dreamers who did enter legally and then overstayed their visas this presents no problem. In the case of most Dreamers however, this disqualifies them since, by definition, they entered the United States illegally.  There are many articles that discuss the prospects of Dreamers coming to Canada. But they seem to miss the point raised by this regulation.

As best as I can make out, the challenge the Dreamers will have is they will need to return to their country of origin to obtain an immigrant visa to enter Canada, assuming they are accepted under Express Entry. One could ask for an exception on the basis of humanitarian and compassionate considerations pursuant to Section 25 of the Canadian Act. But in the absence of such an exception being made at the Canadian Consulate in the United States to facilitate a direct entry, a trip home would be required. For some Dreamers, those from Mexico, this would not pose much of a problem. For others, traveling home en route to Canada could be a significant challenge.

However, an applicant could prepare everything in advance and leave the Consular interview to the very last. That way there would be minimum time taken up abroad at the Consulate. But there would be the risk that in the last minute something goes wrong that would leave the applicant stranded – blocked from entering Canada but also blocked from returning back to the USA. Still, such a risk could be minimized by corresponding with the Canadian Consulate to underline the fact that the applicant is taking a huge chance in leaving the U.S. to get the visa to come to Canada to be more certain that the Canadian Consulate treats the applicant right and forewarns of any problems before the Dreamer leaves U.S. territory.

As it turns out, however, there is hope at the end of the tunnel here. After I first published this article, I received the following note from Dery & Associates, the firm I said “missed the point” up above. It turns out they never missed the point at all. They alerted me as follows:

Under Express Entry system, interviews are extremely rare. We have not had any requests for clients be called for an interview under Express Entry. In the past, interviews were slightly more common under Federal Skilled Worker but under this new system, it seems that Canadian immigration officials will do everything they can to avoid them. Furthermore, when a passport is requested for the applicants PR visa to Canada, the applicant sends their passport by mail. The applicant does not need to leave their country of residence to obtain their PR visa.

Even in the unlikely event that an interview was called and if the applicant lived almost their entire life in the USA, the interview would most likely be transferred to the USA. That said, there is no guarantee of this and it would be at the discretion of the visa officer to transfer the interview.

So over all, this is an excellent strategy to employ if, looking at the potential points you score, you look like you will get enough points. You can run a test score on yourself here. Enter tentative answers where you are not sure, such as your English language scores. If it looks good, why not try a Canadian application?

This article is reprinted from an article formerly published in the Forbes. 

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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. filmmaker’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 filmmaker 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. (Note that Canada does not have E-2 visas, so investors in Canadian films need to use the Canadian inter-corporate 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, particularly when what is being offered is an antidote to the runaway films phenomenon, 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.

Family Members

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.

Among the reasons investors make such investments are:

a) Providing a better future for their children, including better heath care, a solid education and a good job.

b) Earning income abroad through such investing.

c) Concerns about the environment, safety or deteriorating conditions at home.

d) Freer travel, a more comfortable lifestyle and less stress.

When compared to other options such as the EB-5 program, for reasons related to the amount to be invested, the processing time for success, the requirements to be met to be approved, the tax issues that have to be faced, the stifling level of agency scrutiny and the benefits to be gained, the use of E-2 and L-1 options for investor visas definitely merit careful consideration, especially when it comes to film making.

This article is reprinted from an article formerly published in the Forbes. 

Film Makers Look To Foreign Investors To Fund Independent Films

I first raised the idea of using investor immigration as a source of financing independent film making in North America in a Forbes article published not long ago. That idea has gained some attention from people in the independent film making community. For example, David Epstein, a Nashville entertainment attorney, calls foreign investor immigration a “breakthrough strategy” and “a new and innovative way of using good film scripts both as part of an investor immigration strategy and a new source of independent film financing.” David Ward, an Oscar-winning screenplay writer and Alfred Sapse, another entertainment attorney have also taken interest in the strategy. That said, more details about how this idea might work may help to clarify the steps that need to be taken to employ it in North America. For the sake of this article we will look at a potential Chinese investor, since that is where the need for a new immigration strategy is most acute because of the over 10-year processing time now required under the U.S. EB-5 program for Chinese investors and other problems associated with that program.

In my previous article, I described the explosive growth of the film industry in China. There is a natural synergy that could exist between Chinese investors currently involved in the entertainment industry and their potential North American film making partners. But not all Chinese investors are suitable. The ideal candidate would be a young Chinese national who speaks reasonably good English and who currently works as a manager or executive for an existing Chinese entertainment company or for a company in an allied industry. The candidate, or his or her family, would also obviously need to have sufficient money to invest in a well written script prepared by a leading U.S. film writer. There are good reasons for this carefully described ideal candidate as will become apparent from the requirements listed below.

To qualify for a U.S. L-1 work visa, the application must:

    1. First establish that over the course of the last three years the investor, or at least the lead overseas person on the project, has worked as a manager or executive in a foreign company for not less than one year. The investor need not be the person coming to the USA, it can also be a leading executive of the investor’s company. Sometimes a son or daughter could fill this role assuming the managerial or executive function was performed. The work should be in some way broadly related to the film or entertainment industry.
    2. The overseas company will need to become affiliated with a U.S. company to which the executive is to be transferred and through which the foreign investor will participate in the film project. Most often the affiliation is that the foreign company becomes the 100 percent owner and parent of the U.S. entity. The foreign entity cannot be newly established, there needs to be some business track record and seriousness of enterprise evident in its past.
    1. In the plan I outlined previously, the key ingredient was an investment in a new film script prepared for the foreign investor to be purchased through his or her U.S. company. The purchase of the script is the initiating event that will enable the foreign investor to establish his or her commitment to the business enterprise. While definitely the key, it is not however, the only requirement for obtaining the L-1 visa.
    2. As part of the submission for the L-1 visa, the investor will also need to show he or she has registered the U.S. company with the I.R.S. to get a Foreign Employer Identification Number (FEIN).
  1. The company will have to open a bank account with an American bank.
  2. The investor will have to prepare a business plan with income and expense projections for the next five years, preferably broken down monthly in the first year, quarterly in the second year and annually thereafter.
  3. The investor will need to show that he is coming to the U.S. to be a manager or executive of the U.S. affiliated company.
  4. He or she will need to show where his or her company will be located in the United States, preferably by way of a lease of office space.
  5. Finally, the investor will need to show that the U.S. company has been funded by a deposit of funds into the company’s bank account to be used for business purposes once the investor is in the United States. Depending on the nature of the film project the amount could be as low as say $ 200,000 U.S. or as high as  $750,000 U.S. or more. The investment needs to be reasonable given the business plan that is submitted. The first disbursement of funds would presumably be funding the film script. Thereafter the funds would be used to finance the company’s activities including a salary for the investor until the film opens to the public.

As mentioned previously, the inducements for the investor, (partly depending on negotiations with the U.S. film maker,) might include:

  1. The L-1 visa for the investor and all the members of his family, including living anywhere in the United States with the children attending college at internal resident rates as opposed to foreign student rates. Processing times generally, from the time of submission of the L-1 visa petition to the U.S. landing of the investor and his or her family, will be say, less than six months. Compare that with over 10 years for the EB5 program.
  2. Potential to convert the L-1 visa into an EB-1C green card and permanent residence by applying after one year’s presence in the USA for the whole family. Even with the recently imposed cut off dates in the State Department visa  bulletin on EB-1C applications, compared to the EB-5 program, this route is much better.
  3. Work with an established film maker in the U.S. learning the film business. Also, take advantage of the film makers contacts and access to major players in the film industry.
  4. A right to the film script and a share of the film revenues from the film as a result.
  5. An executive producer credit, and
  6. Foreign distribution sub-license rights for the foreign investor’s home market.

For the film maker the benefits are:

1.   Funding for the film script to be made.

2.   Help with producing the film, including the right to direct or play another role in the process.

3.   Guaranteed distribution in the investor’s foreign market.

4.   Potential funding for the full production of the film through the investor’s means.

5.   International exposure and contacts provided to the film maker by the foreign investor’s presence and connections.

6.   As Gary Wolfe, an international tax attorney points out, such projects may also be able to take advantage of major tax credits and rebates depending on where the film is made.

I have already pointed out that the rules for the L-1 visa are virtually the same for investors in Canadian films as well. It should be underlined that there are no guarantees of success in film production. It is a highly risky and speculative business. Nonetheless, through such an investment the Chinese investor will presumably benefit from being in the United States with an L-1 visa while the film is being developed and could also benefit from the success of the film once it is made.  Film makers from other countries, particularly those involved in film centers like Bollywood, Portugal, Canada (Toronto and Vancouver), or Nollywood, could also follow this route to the USA. Some may also be eligible for an E-2 visa – but this subject will have to be the theme of a separate article.

This article is reprinted from an article formerly published in the Forbes. 

Questioning Melania Trump’s Immigration History Helps Nobody

The Washington Post has questioned whether First Lady Melania Trump was deserving of the green card she received through the EB-1 program, which is supposed to be reserved for aliens with “extraordinary” abilities. The article states that, “Melania Trump’s ability to secure her green card not only set her on the path to U.S. citizenship, but put her in the position to sponsor the legal residency of her parents, Viktor and Amalija Knavs. The Washington Post reported earlier this month that the couple is now close to obtaining their own citizenship.”

First Lady Melania Trump (JIM WATSON/AFP/Getty Images)

Before marrying Donald Trump, Melania was a fashion model, and her profession afforded her an H-1B work visa. While the matter of the EB-1 green card may be something worthy of debate, the H-1B visa was pretty straightforward. Judging from the work as a fashion model that the First Lady did, it would not be unreasonable to approve the First Lady’s eligibility in that category. That’s because of the following explanation, provided by Inc magazine.

When Congress created a separate type of visa for celebrity occupations, including people like “performers, athletes, Nobel Prize laureates and religious workers,” Bloomberg said, “lawmakers realized they hadn’t put fashion models in a separate category.”

So, they lumped them in at the last minute with tech workers and other specialty occupations, under the H-1B visas. Subsequent efforts to move models to the category for performers and athletes have failed.

The Inc. article adds, “A new analysis by Bloomberg‘s Frank Bass and Kartikay Mehrotra shows that foreign fashion models are more than twice as likely to be granted H1-B visas than foreign computer programmers. ”

So far, perhaps understandable. My experience is that women of her former stature qualify for H-1B visas. As for getting the green card, apart from winning some international award such as an Oscar, Nobel Prize or the like, the U.S. Citizenship and Immigration web sites spells out the other criteria to qualify for a green card in the EB-1 category. They are:

Criteria for Demonstrating Extraordinary Ability
You must meet 3 out of the 10 listed criteria below to prove extraordinary ability in your field:

  • Evidence of receipt of lesser nationally or internationally recognized prizes or awards for excellence

  • Evidence of your membership in associations in the field which demand outstanding achievement of their members

  • Evidence of published material about you in professional or major trade publications or other major media

  • Evidence that you have been asked to judge the work of others, either individually or on a panel

  • Evidence of your original scientific, scholarly, artistic, athletic, or business-related contributions of major significance to the field

  • Evidence of your authorship of scholarly articles in professional or major trade publications or other major media

  • Evidence that your work has been displayed at artistic exhibitions or showcases

  • Evidence of your performance of a leading or critical role in distinguished organizations

  • Evidence that you command a high salary or other significantly high remuneration in relation to others in the field

  • Evidence of your commercial successes in the performing arts

As to whether the First Lady met these stringent criteria, one would need to see the materials that were submitted in support of her application to the U.S. immigration office. At least two of the items on the list were probably in her submission: published materials about her and commanding a high salary. While one can perhaps doubt about whether the First Lady had what it takes to meet any of the other criteria, it may be quite likely that she was able to provide evidence of other qualifications. However, there is something about this line of attack that troubles me.

I find some of the questions being raised about the First Lady distasteful and mean spirited. As far as I am concerned, Donald Trump is open territory and deserving of many of the criticisms leveled at him. Criticism comes with the job and when he makes a blunder he deserves a rebuke. This attack on the First Lady is different.

In my view the questions that were raised about Slovenia and the modest numbers of successful immigrant applicants from that country had no place in measuring the First Lady’s qualifications.  Give the poor country a break and if you are going to pick a quarrel about immigrants levels, pick it with countries with larger, more economically advanced populations that have sent abundant numbers to America. What is more, what do the immigrant numbers from Slovenia really have to do with whether Melania Trump is qualified?

What is more disturbing to me is the ad hominem nature of the attacks on the First Lady. Not everybody is as articulate as Michelle Obama or Barbara Bush, nor perhaps as well educated. Let’s remember that English is the First Lady’s second language. I would invite those who are criticizing her to try doing it in another language to get a sense of the handicap involved in the First Lady’s defense of herself in English. To more directly address the immigration question, while Melania Trump is no Einstein and thus may not be eligible for an “Einstein visa,” let’s remember, as is apparent from the criteria set out above, that is not the criteria for approval. When compared to others who have received the same green card, including models I have represented, apparently she measured up well enough to be approved. Perhaps that’s because her qualifications were not measured by perfection, but by the balance of probabilities – the proper measure in this instance.

That said, let us return to the immigration debate in America, but let us stay away from unfriendly aspersions about immigrants who have legally succeeded in their efforts to join us in this country, nor on their efforts to sponsor their family members so long as the laws allow for that to happen.

This article is reprinted from an article formerly published in the Forbes. 

How U.S. Filmmakers Can Make More Movies And Earn More Money By Involving Foreign Investors

In 2017, North America, the world’s largest movie market, saw a steep decline in box office revenues. Still, North America, that is to say the United States and Canada, generated a total of $40 billion in box office sales for theatrical distribution. That did not include multiple ancillary revenue streams such as: 1) other platform distribution 2) merchandising 3) music, including soundtracks 4) celebrity image name and likeness merchandising 5) product endorsements and 6) personal appearance revenues for stars. Not bad for a “decline” in the industry.  Still, employing sound immigration, tax and investment strategies, the U.S. film industry could do much better.

New thinking is needed to improve North America’s revenues and film making in Hollywood. Using a combination of sound immigration, tax and financing advice, Hollywood filmmakers can improve their success. Pic: Wikipedia

New thinking is needed to improve North America’s revenues and film making in Hollywood.

The Global Market Is Exploding

As revenues from North American box offices were declining last year, global film revenues grew widely. For example, in 2017, China took in almost $9 billion in movie revenues, that is to say, over 20 percent of global box office film revenues. That was second only to North America. According to Claudia Lin Margolis, an international business consultant working in the Asian market with The Wolfe Law Group, China is expected to overtake North America’s lead in next few years. That is because of a huge wave of new construction of movie theaters, its growing demand for movies in general, and its interest in co-production work with U.S. filmmakers. India, with over one billion people, like China, is also a growing market for the consumption of films and for co-productions between Hollywood and Bollywood. There is every reason to expect India also to emerge as a major international film market competing with North America, China and other countries. When you consider rapid changes in technology such as multiple distribution platforms for movies, including satellite, cable, DVDs and streaming via the internet like Netflix – all this adds up to a spectacular future for the film making industry globally and especially for U.S. filmmakers and the distribution of their films worldwide.

So the question is how can a U.S. filmmaker employ sound immigration, tax and investment strategies to attract capital for his or her film and capitalize on these growing foreign markets to make even higher returns than in the past?

How To Make More Movies and Earn Way More Money

The answer is simple.

A U.S. filmmaker, with the help of immigration, tax and financial advisers, can find a foreign investor already working in the entertainment or allied industry abroad to help him or her set up a U.S. company. The new company is created as a film finance and production company with film distribution rights in the investor’s home country and elsewhere. For investing say, a minimum of $350,000 U.S., the investor’s foreign company becomes a 100 percent owner of the new U.S. company.

For the U.S. company’s first project, it invests say as little as, $250,000 in a film to be produced by the U.S. filmmaker. Obviously the filmmaker needs to be first rate. I have in mind people like David Ward, who won an Oscar for The Sting and wrote the screenplays for Sleepless in Seattle and Major League, or Alfred Sapse, an entertainment attorney who has produced some 20 major films. The exact amount can be tailored to the investor’s financial capabilities and the film’s budgetary requirements.

Experienced filmmakers like David Ward who won an Oscar for The Sting, could help foreign investors make great films in the United States that could find an international audience. Pic: Wikipedia

The foreign investor, as a manager or executive of his foreign company wishing to transfer to America to work in the U.S. entity, gets: 1) A U.S. L-1 work visa for the investor and his or her family to live and work in the United States. The visa is usually issued for three years and can be renewed for up to seven years. It can also be converted into a EB-1C green card. The investor gets a work permit, the spouse can also get an Employment Authorization Card and the investor’s children can attend school at U.S. domestic tuition rates. 2) An executive producer credit on the film. 3) The opportunity to work with and learn the film business from a top-rate U.S. professional filmmaker.

The foreign investor’s U.S. company gets 1) Distribution rights for the film in the investor’s home country and 2) Such rights in any other agreed territories. 3) An agreed “piece” of the gross or net revenues of the film.

A New Way To Finance Independent Films

The intersection of this model with current independent film production and distribution practices opens the door to making independently financed films using foreign-sourced investor funding. The investor puts up say, $250,000, which goes to the filmmaker’s company for the project. Each project should be a separate company and can involve different amounts. The filmmaker uses the funds to finalize the script and the company starts pre-production. The script is the key, however. Then, the filmmaker and the investor seek out a production budget based on 1) the script and 2) the filmmaker’s credentials and 3) the foreign investor’s credentials and support. Between the script being finalized, pre-production, principal production and post production and then ongoing distribution, each film may safely take up to seven years which aligns nicely with the L-1 visa maximum time frame. The foreign distribution component ensures that this is not just a “one film” production company, but an ongoing business. Fees for immigration, tax and financial advice will probably take up most of the balance of the investor’s $ 350,000 investment.

Better Results For Investors

Obviously the investor cannot get a guarantee that the film will be produced. However, minimally he or she will get an interest in the script which may prove to be a very valuable asset in itself and valuable exposure to the U.S. film industry. For Chinese or Indian investors who have not yet applied for EB 5 visas, this proposal leading to an early entry into the U.S. with an L-1 work visa may be especially interesting. For Chinese or even Indian investors who have applied for an EB 5 visa but are subject to a backlog in processing, this L-1 visa idea could be used to access the U.S. while awaiting the over 10 year projected processing approval time. For investors from other countries, this plan could be used with an E-2 visa if their country has an investment treaty with the United States. Such a visa would make the project even more viable since the investor would not necessarily need a connection previously to the entertainment industry or a foreign based company to start with.

Leading international tax attorney Gary Wolfe likes L-1 and E-2 U.S. immigration work visas because they can be used to avoid significant U.S. tax exposure for foreign investors. Pic: Wolfe

Gary Wolfe, a leading international tax attorney, especially likes this L-1 and E-2 visa approach to U.S. film making because such visas enable him to help foreign investors avoid the significant U.S. tax exposure present in other forms of U.S. immigration options. What is even more important is that these L-1 and E-2 visas can be obtained within a few months and the investors do not have to wait years to move to the U.S. with their families.

The future of U.S. film making is bright for those who are prepared to take up the challenge. What is more, very similar rules to the L-1 rules outlined here can be employed by filmmakers in Canada to help them in their efforts as well – while taking advantage of Canadian government and tax incentives. By accessing these global resources North American filmmakers can make more movies and earn way more money – leading the way into a bright future for all.

This article is reprinted from an article formerly published in the Forbes. 

EB-5 Investor Immigration Program Faces New Challenges From Kushner’s Involvement

Recent news reports indicate that companies owned by President Donald Trump’s son-in-law Jared Kushner are under investigation. The U.S. Securities and Exchange Commission is looking into their attempts to line up investor money from Chinese investors by presenting their New Jersey real estate projects as EB-5 visa investments. What is more, U.S. tax authorities have requested documents from lenders and investors in real estate projects managed by Jared Kushner’s family. Mr. Kushner has already been linked to Special Counsel Robert Mueller’s investigation into Russian election meddling. In short, Kushner is increasingly under fire and appears to be the target of multiple investigations. Nowhere are these developments more troubling, however, than in the EB-5 investor immigration world.

Mr. Kushner’s EB-5 related problems have brought unwanted infamy to an investor immigration program that has already had its share of problems. Earlier this year the Lucky Dragon Hotel project in Las Vegas involving Chinese EB5 investor immigrants closed down. It was reported that 60 investors stood to lose $ 500,000 each as well as legal fees they paid while not getting their green cards. For some time now Chinese investors have increasingly been losing interest in the program because of the more than 10 year wait times required, the uncertainty associated with its renewals, and new Chinese restrictions on the outflow of capital from the country.

In articles I previously wrote I looked at practical alternatives to the EB-5 program. In the first article I compared the EB-5 program to the E-2 work visa program, suggesting the E-2 visa is preferable. In that article I even suggested how a Chinese investor who normally could not qualify for an E-2 because China does not have an investment treaty with the USA, could qualify to obtain an E-2 visa by becoming a citizen of Grenada. In the second article, I suggested that for those Chinese investors who had an existing business in China, and investors in other countries who may not qualify under the E-2 visa, the EB-1C program is better.

Now consider the tax issues associated with the EB5 program. Gary Wolfe, a leading international tax attorney, summarized them nicely as follows:

The extent to which a new immigrant is exposed to U.S. taxation is:

    1. 1) Imposition of federal and state (e.g. CA) “blended income tax”rates up are to 55 percent.
    2. 2) For 2017, U.S. estate and gift taxes of 40 percent (after the personal exemption of $5.49 million or, the combined $10.9 million for a husband and wife plus gift exemptions of$14,000 each for that year, thus totaling $11.26m for husband and wife.)
    1. 3) Risk of creditor attachments. Over one million lawsuits are filed yearly in California. Plaintiffs attorneys look for “deep pocket defendants” who hold assets titled in their individual names or closely held entities. Investors often fall into this category.
    1. 4) U.S. worldwide information reporting requirements for undisclosed foreign bank accounts. (FBAR filings/FinCen Form 114 for foreign bank accounts over $10 thousand. Failure to file is an annual 50 percent penalty. That can be up to 300 percent if non-tax compliant for 6 years. Willful FBAR failure to file violations can also result in a 10-year felony for each year FBAR is not filed.
  1. 5) Foreign Account Tax Compliance Act (FATCA) requires reporting by foreign banks on U.S. account holders (adopted March of 2010 and is effective for tax years thereafter). Form 8938 is a separate tax filing due (attached to Form 1040) for foreign financial assets over $50 thousand. Thus taxpayers with foreign bank accounts over $50 thousand have to file both the FBAR and the FATCA filing (Form 8938) or risk multiple civil and criminal tax penalties.

Consider these now new (2018 forward) tax pitfalls Wolfe has identified:

  1. Elimination of multiple federal income tax deductions, such as: a) for alimony paid, and b) for payments in excess of $10 thousand annually for all state, and local income taxes paid, as well as for property and sales taxes paid and casualty losses for personal property (as for example in the wildfires that raged through California in 2017).
  2. A one in three chance of an IRS tax audit if earnings and/or net worth exceed $10 million under the little disclosed IRS Tax Wealth Squad (formed in 2010) as a special  audit division of the IRS (which evaluates both income and net worth levels, triggered when a US taxpayer receives multiple K-1s from various investments.
To summarize, the EB-5 program has endured a lot of trouble in recent years. Apart from some losses by EB5 investors, Chinese long waiting times, uncertainty associated with the program’s renewals and Chinese restrictions on the outflow of capital, two new challenges have entered the picture.
One is the problem created by Jared Kushner’s use of the EB5 program to raise money in China for his New Jersey real estate projects. This has not helped strengthen the program’s image nor boosted investor confidence in it, particularly because he is related to the President yet under investigation.
The other is the new tax realities facing EB5 permanent residents in America, particularly when viewed through President Trump’s new tax act.
The point of this article is that by resorting to the E-2 visa, or even the L-1 inter-corporate transferee visa when the investor owns a company overseas, investors can avoid a lot of the problems outlined. As the Eb-5 program faces increasing scrutiny, these alternate investor programs appear to be better options for many investors.
This article is reprinted from an article formerly published in the Forbes. 

Is A Breakthrough For Dreamers Imminent?

Congress appears to be poised to adopt legislation dealing with DACA, or Deferred Action for Childhood Arrivalsthe immigration program set up in 2012 by President Obama. DACA allowed illegal immigrants who entered the United States when they were minors to benefit from a moratorium on their expulsion for a period of two years and to be eligible for a work permit, subject to strict conditions. DACA has been an indispensable protection for these young people who are stuck in the paradox of being American at heart but without the right to stay because they entered the county illegally.

For the most part, today’s Dreamers are young academics between 20 and 30 years old, perfectly integrated into society. Many of these children of America are successful examples and boosters of the American economy. DACA has allowed them to live without the fear of being deported and thus to build their lives in all serenity.

The latest polls reveal that 76% of Americans support Dreamers and are convinced that they have their place in society and that they must be saved. But this reality is mixed with the fears of the moment on immigration. It has therefore been difficult to find the legal tool that will find the balance of protecting these illegal young people without encouraging illegal immigration.

Dreamers Act: Almost Two Decades of Frustration

The name of Dreamers comes from the bill Development, Relief and Education for Alien Minors (DREAM) Act introduced in Congress in 2001. The purpose of this bill was to regularize the situation of these young people by giving them, first of all, a right to permanent residence and then to become U.S. citizens. It has been 16 years since various versions of this bill were proposed but ended up defeated.

The End of DACA: A Time Bomb

The situation of Dreamers has become a time bomb.

On Sept. 5, 2017, the countdown began as President Trump announced that DACA would end on March 5, 2018. From that date, young people under DACA will not be able to renew their status and thus will be left in an untenable position of possibly being deported. Congress has until March 5 to find a fix for these Dreamers. After that date, every day, about 1,000 Dreamers will be deprived of their right to work and be at risk of being deported because of the cancellation of their DACA status.

On Monday, the U.S. Senate began a debate on immigration that was scheduled to last a week. According to some of the senators, the chances of reaching an agreement before the expiration of the deadline are slim. The Senate would need 60 votes in favor of any proposal.

It seems that the majority of the senators want to provide protection for the Dreamers. Even if both parties agree on the general idea, however, some Republicans have tried to use the debate to win concessions on other immigration measures as the price for their support.

However, the pressure is mounting. For example, the American Immigration Lawyers Associationsubmitted a petition to urge the Senate to make a decision urgently. Other individuals, associations and various leaders are all trying to push the Senate to find agreement on this theme. Even freelancers have written blog posts calling on people to contact the Senate and let the senators know that they want an agreement to be reached on the situation of the Dreamers.

Other Options for Dreamers

There are two categories of alternatives for Dreamers. The first would be to try to find other legal alternatives to remain on American soil. The second would be alternatives dealing with moving to another country. But recently a compromise proposal in the Senate has been gaining steam and looks like it may find enough backers to break through the logjam. We should know in the next day or two whether that will happen. For the sake of the Dreamers, and for progress on immigration as a whole, let’s hope that happens.

This article is reprinted from an article formerly published in the Forbes.