Since its enactment in 1990, the EB-5 Immigrant Investor Program has been a popular way for foreign nationals to obtain U.S. green cards for themselves and their immediate family members. At a glance, the program is quite straightforward—a foreign national invests in a qualifying EB-5 project, and if their investment fuels the creation of at least 10 full-time jobs for U.S. workers, they obtain permanent resident status in the United States.
Investors must pour a certain amount of capital into their chosen EB-5 project to qualify for an EB-5 visa. The minimum required amount varies depending on whether the EB-5 project is in a targeted employment area (TEA), which can be defined as either a high-unemployment area, with an unemployment rate 50% higher than the national average, or a rural area, with a population of fewer than 20,000. For projects located outside of TEAs, EB-5 investors must invest at least $1.8 million, but for projects inside TEAs, the minimum required investment amount is $900,000.
After carefully conducting due diligence and selecting the most suitable EB-5 project, an investor initiates the process by filing Form I-526. In this petition, the investor must provide personal information and documentation proving the lawful sources of their investment capital, as well as documents proving the legitimacy and business potential of the new commercial enterprise (NCE) they are investing in.
While EB-5 investors must document the source of their investment funds, any legal source is permitted as long as it can be sufficiently traced. Investors often combine funds from numerous sources to meet the minimum investment amount requirement. Common sources include the following:
- wage earnings
- investments
- business income
- sale of assets
- retirement funds
- loans
The investment funds can even be a gift—it’s common for parents to donate EB-5 investment capital to allow their children to pursue permanent residency in the United States. In such a case, the recipient should provide a document certifying the transfer of the gift money, including a statement from the donor freeing the recipient from obligations to pay the money back, and the onus of tracing the lawful sources of the funds is then placed on the donor.
EB-5 investors are advised to work with an experienced EB-5 immigration attorney to determine the best sources of funds to document in their I-526 petition. Since documenting the lawful sources of EB-5 capital can be tiresome and time-consuming, knowing the easiest sources to trace can significantly expedite an EB-5 investor’s I-526 journey. Simpler source-of-funds documentation also facilitate the petition adjudicator’s job, potentially resulting in shorter wait times.
