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Addressing the EB-5 “Lawful Sources of Funds” Requirement

Addressing the EB-5 “Lawful Sources of Funds” Requirement

Since 1990, foreign nationals from various countries have taken advantage of the EB-5 Immigrant Investor Program to start a new life in the United States with their spouse and unmarried children younger than 21. Investors must part with $1.8 million—$900,000 for targeted employment area (TEA) projects—but an EB-5 investment in a bright, promising future in the United States is more than worth it, and if they select their EB-5 project carefully, investors may also earn a handsome return on their initial EB5 investment amount.

While the EB-5 program is known as one of the quickest and simplest methods to long-term U.S. immigration, an EB-5 investment still has to fulfill several requirements to qualify its investor for a U.S. green card. One such requirement is to provide documentation that proves the EB-5 investment capital originated from lawful sources. Although it makes sense for United States Citizenship and Immigration Services (USCIS) to require proof that its green-card-by-investment program is not promoting crime, either in the United States or abroad, the source-of-funds requirement can be time-consuming and challenging for investors to complete, depending on the type of funds comprising their EB5 investment.

To quote USCIS verbatim, an investor must “demonstrate by a preponderance of the evidence that the capital invested, or actively in the process of being invested, in the new commercial enterprise was obtained through lawful means.” Put more simply, an investor must provide evidence that shows their EB-5 investment capital is more likely than not lawful.

Different Investors Require Different Documentation

The difficulty behind offering general advice regarding the source-of-funds requirement is that each EB5 investment is different and thus requires different documentation. Procedures can also vary by country, with some documents more accessible in certain countries than others. Then, there’s the translation requirement—if an investor’s source-of-funds documents are not in English, they will also have to supply certified translations in English.

As USCIS allows EB-5 investment capital to come from any number of sources so long as it can be proven to derive from lawful sources, a wide array of documents could constitute source-of-funds documents for an EB5 investment. Below is a non-exhaustive list of potential source documents:

  • Tax returns
  • Bank statements
  • Loan documentation
  • Investment records
  • Employment records
  • Sale of asset records
  • Accounting records from the investor’s own business
  • Records of private transactions, such as gifts

How Long Does It Take to Gather Lawful Documentation?

The length of time any given EB-5 investor will require to gather the documents necessary to prove the lawful sources of their EB5 investment capital varies based on their country and the sources of their funds. Investors should speak with their EB-5 immigration lawyer to determine the most suitable sources of funds to use. EB-5 investment participants should also start considering the lawful sources of their capital in the investment planning stages, as their attorney will likely request the documents long before I-526 petition submission.

Additionally, the sooner an investor gathers source-of-funds documents, the sooner they can begin their new life in the United States. Delays in the document-gathering process will inevitably lead to delays in filing the I-526 petition, which will push the date of immigration to the United States further back.

Maximize Data Collection for Maximum Chances of I-526 Success

If you’re not sure whether to include a particular document—then you should probably provide it! Investors aren’t penalized for providing too many documents to prove the lawful sources of their EB-5 investment funds, and any document that can sway the adjudicator’s opinion in favor of the investor is a good thing.

In some cases, certain documents or records may not be available to the investor. If, for example, an EB-5 investor’s bank deletes bank account statements from its archives after a certain period of time, the investor may not be able to access necessary records to prove the sources of their funds. Fortunately, there are workarounds in such situations—an investor may ask their accountant to provide a sworn affidavit that details the same information that the bank statement would have, alongside a justification of why the original document is unavailable. Using such solutions to source-of-funds obstacles, most investors can secure their bright future in the United States.