How to Prove Your Legal Source of Funds for EB-5 Investment?

Legal Source of Your EB5 Investment.

The Immigrant Investor Program, also known as “EB-5,” was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. In our previous post we gave you some tips on what kind of the evidence you should submit to the USCIS in order to prove that you fulfilled all requirements set by this Program. To recap, you need to demonstrate that you are investing required one million dollars (or USD 500,000 if you plan to invest in Targeted Employment Area) in for profit new commercial enterprise, which you will actively manage, and your investment will create at least 10 full-time jobs positions. The most difficult and tricky process is to proof the lawful source of funds.

EB5 Investment Evidence.

According to the EB-5 regulations you shall submit foreign business registration records, corporate, and personal tax returns filed within 5 years, evidence identifying any other source of capital, or documentation of court judgments or pending court case. But this is just the start and in fact, USCIS requires much more than these documents. Without evidence indicating the precise path of funds, you cannot meet the burden of establishing that the funds are yours and come from the lawful source.

Lets imagine, that half of your funds is a result of the gift from your mother Mary, you also inherited a few thousands from your uncle Bob and the rest of the money you are planning to get by the selling your house. Be prepared that you need to document not only these transactions but you have to go deeper. Regarding gift from your mom, you shall submit the evidence how Mary obtained these funds including whether a gift tax was paid. In case of inheritance, the Bob’s source of funds may be the issue as well. If you are selling a property, you will need to provide the buy/sell agreement, proof of the transaction and bank statement showing receipt of the purchase price and proof that any applicable taxes have been paid. You can also include a copy of the real estate listing of your house to show that it was on the market and at what price. Also, you should be prepared to document how you earned the funds to buy the property in the first place.

As you can see, proving the lawful source of capital can be lengthy process but generally, the best strategy is to start with who originally got the funds. There’s no harm to submit a diagram or description of the path of funding to paint the entire picture. Don’t forget that in filing an EB-5 petition, you may bring also other individuals under investigation and they must be prepared to withstand USCIS scrutiny.

Since every investment and case is specific, contact immigrationbiz.com for more information and let our professional team to help you.

Click here to learn more about Regional Center investment. 

Click here to learn more about the documentation for EB5 application. 

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