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ILW.COM EB-5 Blog

Proving a Lawful Source of Funds for EB-5 Investments

Rating: 6 votes, 5.00 average.

Foreign investors participating in the EB-5 Program, by
which they may obtain green cards for an investment of $1 million (or $500,000 if
investing in a Regional Center) into a United States commercial entity, must
submit proof that the funds invested came from a lawful source. 


USCIS regulations prohibit the use of investment capital or
assets obtained either directly or indirectly by any unlawful means such as
criminal activities.


To prove that the investment capital was obtained by lawful
means requires documentation of the path of the funds. Simply submitting bank
letters, or bank statements showing the depositing of the funds is
insufficient.


While the petitioner and his family may submit affidavits or
declarations identifying the source of the funds, independent corroborating
evidence is necessary and must be submitted along with the petitioners I-526
(Immigrant Petition for Alien Entrepreneur form).


While the documents needed to prove that the investment is
from a legal source will be specific to the investor and to their individual
source of funds, the following forms of documentation may be submitted as
evidence:


1) Foreign business registration records or other evidence
of the funds as related to the business, including the business' tax returns
dating back five years, audited financial statements, licenses, stock
certificates indicating ownership, documentation relating to the sale or
acquisition of the business, and the related proceeds or funds from such sale
or acquisition.


2) Personal tax returns filed anywhere globally for the
prior five years. Investors are permitted to show a "pattern of income" in
support of their petition, however it is preferable to show more than the
required five years of tax documentation if choosing this option to justify the
investment funds. Supporting documentation of income can also include paystubs
from an employer, employment contracts, or letters documenting bonus, stock
options or promotions.


3) Documents identifying any source of the money including savings
and personal investment records can be submitted to show that the funds were
accumulated over time if the investor's annual income is not substantial enough
to show a "pattern of income" on its own.



  • If the funds were obtained by sale of real
    estate, the documentation may include purchase or sales contracts, appraisals
    of the real estate, documentation of income acquired from lease of real estate
    and the contracts evidencing the same, and or deeds and mortgage documents.

  • But if the funds were a gift, which is a
    permissible source, the USCIS will require information on the gift giver and
    track the source of funds from that person.


4) Certified copies of civil or criminal actions and
proceedings, or any private civil actions involving money judgments against the
investor within 15 years are required if the funds are from a lawsuit or legal
proceeding. Evidence of the awards or settlements may be submitted.


Finally it bears noting that if the funds have been acquired
by a loan, there will be even closer scrutiny of the source of funds. Since
regulations expressly prohibit using a loan that is secured by the assets of
the new commercial enterprise, any petition that reflects capital obtained by a
loan secured in this manner will be denied.  

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