Foreign production companies in the US market: What do you need to know?
Managing Attorney for US law firm Szew Law Group, Andrea Szew, explains the visa options available for foreign production companies in the US.
Production companies looking to film in the United States with foreign talent have a couple key issues to think about when it comes to getting visas for their cast and crew: Who will sponsor the foreign cast and crew? What visa options are available?
Most types of visas require a sponsor (also known as the petitioner), who can either be a US individual or company. Many productions choose to open a US entity to produce the project and then, that US entity also acts as the sponsor for the foreign cast and crew. Alternatively, a US agent could act as a sponsor. A US agent is either a US individual or company that agrees to act on behalf of the foreign company solely with respect to filing immigration documents. The agent enters into an agreement with the foreign company, authorising them to file all immigration documents and to accept service of process on any claim related to anyone they sponsor. The foreign production company remains the employer for the cast and crew. This is a good option for a single project or a production that will only need to film in the US for a short period of time. However, this option may limit the type of visas available.
Choosing to open a production company in the US is a decision that requires the involvement of both US and foreign professionals. Every decision during the process will likely have a corresponding tax consequence in the owner’s home country. There are two common types of entity structures that are used in the US: (i) a Limited Liability Company, usually treated as a “pass-through” entity for taxes, meaning any profits pass through to the owners (reported on the individual level), or (ii) a C Corporation, which pays taxes on any profits (reported on the business level). Each entity has its pros and cons and the chosen structure is usually dependent on the preferred tax treatment of the income, taking into consideration the taxability in both the US and foreign country.
Once it is determined who will be the sponsor, then a decision on what type of visa to apply for needs to be made. Using a US agent, the cast and crew would likely be limited to an O visa (extraordinary ability visa) for a key person, and then O-2 visas for the necessary support personnel. For example, if the director of the production can meet the requirements of extraordinary ability set by US immigration laws and regulations, then he/she will get the O-1, and all the support personnel needed for him/her to direct the film will obtain O-2s. This is one of the only options when using an agent. However, when a production company establishes a US entity, then a couple more options come to life: namely, the E-2 (investor visa) or the E-3 (Australian professional visa).
One of the most useful and flexible is the E-2 treaty investor visa, which is available to certain countries – Australia being one of them – that have treaties with the US. The E-2 visa is granted to investors who open US businesses (including production companies), so long as the investment is substantial, will produce enough income to support not only the investors but other employees, and will grow over time. There is no minimum required amount for the investment; however, it must make sense for the type of business, number of investors, and what is needed to start up the company and make it profitable. Once the investor (either an individual or company) qualifies for the E-2, then the company is able to sponsor key executives or employees with essential skills to also enter on the E-2, so long as they have the same nationality as the investor. These visas can be obtained in a relatively short period of time once the investor has qualified for the initial E-2. This is a great option for a production company that wants to expand into the US market and is looking at doing multiple projects over time.
Another visa only available to Australians is the E-3 professional visa. This visa may be used for Australian professionals who hold university degrees in their field of work. This is a great option for the technical crew, directors, cinematographers, composers, editors, etc. Any position within the production that would normally require a university degree could qualify to use this type of visa. Both E visas allow spouses to work in the United States and are applied for directly at the consulate, allowing for a much quicker processing time.
This is only a snapshot of some of the options which production companies can consider when looking to produce in the US. Starting the discussion and planning early is critical to lay the basic ground work for a smooth entrance into the US market when the time comes.
The Szew Law Group is based in Los Angeles and consults internationally on immigration to the USA. www.szewlaw.com
This article originally appeared in IF Magazine #179 October-November.