One of the beautiful things about the EB-5 Immigrant Investor Program is its flexibility. Foreign nationals from any country can participate in the residency-by-investment program, and their EB-5 investment capital can come from almost any source, as long as it is legal. This flexibility opens the program up to many foreign nationals dreaming of a life in the United States for themselves and their immediate family members.

Sourcing one’s EB-5 investment funds is often among the most complicated and time-consuming aspects of the EB-5 process. Newcomers to the program are often unsure as to where they may source their capital from. Below are five of the most common sources of EB5 investment capital and tips on demonstrating their legal sources to United States Citizenship and Immigration Services (USCIS).

EB-5 Investment Capital from Employment

Many foreign nationals who make an EB-5 investment earn their capital through employment. The employment may be with any company and in any sector, as long as it is legal. Depending on an investor’s employment situation, proving the lawful source of their employment income may necessitate collecting documents from multiple companies, sometimes dating back several years. In countries with less rigorous record-keeping standards than the United States, necessary documents may not always be available—but an experienced EB-5 immigration attorney can typically advise investors of a workaround.

Various documents can be used to prove the legal sources of an EB5 investment earned through employment, including bank statements, paystubs, and a letter from the respective employer confirming the position and salary. But proof of employment alone isn’t enough—an EB-5 investor must also demonstrate that they have paid all applicable taxes on their income by supplying their tax returns.

EB-5 Investment Capital from the Sale of Property

Whether they inherited a property or bought it and have sold it for a large capital gain, EB-5 investors commonly use the sale of property to fund their EB5 investment. To prove the lawful sources of such capital, the sale agreement is obviously necessary, as well as bank statements showing the funds being deposited in your account from the buyer. But that’s not all—USCIS wants to see that an EB-5 investor originally obtained the property legally. This may entail including the initial purchase agreement, along with proof of the legal sources for the capital used to purchase the property, or inheritance papers. Then, of course, an EB-5 investor must show they paid any property taxes due on the property.

In some cases, an investor owns a property for a significant period of time before selling it, making it difficult to trace the documents from the time of initial purchase. Under such circumstances, USCIS may be satisfied with a note explaining why obtaining these documents is impossible, backed up by statements from local experts. An EB-5 immigration lawyer can guide EB-5 investors through the best solution for their situation.

EB-5 Investment Capital from Loans

Loans are also an acceptable source of EB5 investment capital, whether they come from an institutional lender or an individual. However, securing a loan from an institutional lender is always the safer bet, as USCIS does not require documentation on how major banks sourced their capital for the loan. If contracting a loan from an individual, an EB-5 investor must include evidence showing how the individual acquired the amount. Another important condition to note is that a loan from a friend should be at market rate—USCIS is prone to deny loans significantly below the market average.

To be on the safe side, it’s also recommended to secure the full amount of the loan with the EB-5 investor’s personal assets. Courts have ruled that unsecured loans are indeed valid for EB-5 investment purposes, but with USCIS’s tendency to alter its interpretations on a whim, it’s far safer to use a secured loan, if possible. Again, experienced EB-5 counsel can help determine the best path for any individual EB-5 investor.

EB-5 Investment Capital from Gifts

Though it may come as a surprise to some, gifts are a common and valid source of EB-5 investment funds, particularly from parents to children. Most young EB-5 investors come to the program by way of a gift from their parents, allowing them to work toward U.S. permanent residency as they complete their studies in the United States.

While a gift is a perfectly valid source of EB5 investment capital, investors must still prove the legality of the gift. First, they must provide a written document detailing the gift, with the donor stating in no unclear terms that the recipient has no obligation to repay the amount. If a gift tax is applicable, as in some countries, such as South Korea, the investor must also include records of the tax having been paid.

However, the bureaucracy doesn’t stop there—USCIS wants to confirm that the donor obtained the capital from lawful sources. Therefore, the donor must agree to divulge comprehensive information on the sources of their funds, just as a principal investor would do for employment income. Additionally, if the donor is not an immediate relative, it’s always good practice to include an explanation as to why the donor was willing to gift such a large amount to the EB-5 investor.

EB-5 Investment Capital from Inheritance

Like gifts, inheritance may be used as a source for an EB-5 investment, but the documentation for inherited EB5 investment capital can be tricky. Naturally, the relation of the investor to the deceased must be demonstrated, as well as a copy of the will or other evidence of their right to the inheritance. If the applicable country or state levies inheritance taxes, proof of payment must also be included in the investor’s I-526 petition.

Where inheritance source of funds gets difficult is in demonstrating the legal source of the deceased’s capital. In some cases, this can entail tracing decades of documents, some of which may be impossible to obtain. Explanations attesting to the impossibility to obtain such documents and affidavits asserting the source of funds may be acceptable alternatives—as always, an EB-5 immigration lawyer can provide tailored advice for any investor’s situation.

Consult with an EB-5 Immigration Attorney

This is a non-exhaustive list showcasing merely the most common sources of EB5 investment capital. Investors can and do use an array of other sources to fund their EB-5 investments, and as long as they can prove the money came into their possession legally, anything goes. It is also, of course, possible to use funds from several different sources.

With a complex program like the EB-5 program, it’s important to remember that there is no one-size-fits-all solution, and all investors have unique situations. That’s why it’s imperative to retain an experienced EB-5 immigration attorney who can guide you through the best sources to use for your EB-5 investment.