Foreign investors are required by both the EB-5 Program and U.S. law to prove the lawful source of any funds invested in a new commercial enterprise in the United States. As such, investors and regional centers must carefully trace the path of all investment funds and provide supporting documentation to United States Citizenship and Immigration Services (USCIS) when filing the I-526 petition for conditional permanent residence. Investors should additionally be sure to document the lawful source of any funds used to cover administrative costs associated with the investment as required by USCIS.

Lawful Source of Loan Funds

An investor can use a loan to make up the EB-5 investment amount provided he or she secures that loan with personal assets. To prove the lawful source of investment funds derived from a loan, an investor therefore needs to submit the following documents with his or her I-526 petition:

• The investor must include a capital source statement explaining that the investment funds are derived from a loan secured by his or her personal assets. Additionally, the investor must submit bank statements proving receipt of the loaned funds.
• The investor must submit a loan contract specifying the terms of the loan, such as the repayment period and interest rate, and identifying the personal assets used as collateral to secure the loan.
• Also to be included are personal income tax returns from the previous five years. In some cases, as in countries where no income tax is collected, furnishing such records may not be possible. An investor unable to provide income tax records may instead submit a declaration from a tax professional detailing the required information and explaining why the investor’s tax returns are legitimately unavailable.
• An investor who has borrowed funds from an individual rather than a bank or other lending institution must submit documents supporting the lawful source of the funds used to make up the loan. These include a capital source statement from the lender and any other documents necessary to trace the source of funds, such as employment records or real estate contracts. The lender must also provide his or her personal income tax returns from the previous five years, although, as detailed above, this may be substituted for a declaration from a tax professional if necessary.
• Finally, the investor must submit documentation proving the lawful source of funds used to purchase the assets serving as collateral to secure the loan. For example, the use of a loan secured with real estate must be supported with documents proving ownership of the property as well as employment records and other material evidencing the lawful source of the funds used to initially purchase that property.

Unique Documentation Required

Each investor taking out a loan to make up his or her EB-5 investment amount will have unique documentation requirements based on the assets used to secure that loan. As such, investors and regional centers must work with knowledgeable financial and legal representatives to ensure they not only abide by U.S. laws but also meet the requirements of the EB-5 Program and thereby make successful adjudication of the I-526 petition more likely.