Foreign investors are required under the EB-5 Program to document the lawful source of any funds invested in a new commercial enterprise (NCE) in the United States. United States Citizenship and Immigration Services (USCIS) therefore requests that investors using proceeds from the sale of real estate to make up the investment amount provide supporting documents to evidence that those funds have been obtained lawfully. This is required both by the EB-5 Program and by U.S. laws.
Investors are required to make an investment of $1,000,000 or $500,000 if the NCE is in a targeted employment area, this being an area with a low population or high unemployment. However, investors may also face administrative costs relating to the investment, and the funds used to cover that amount must also be sourced lawfully and documented in the materials provided to USCIS for the I-526 petition for conditional permanent residence. Investors using real estate sale proceeds must provide the following documents for these purposes:
- The investor must submit a capital source statement explaining that the investment funds are derived from the sale of real estate. Additionally, the investor must detail how he or she obtained the real estate, for example, how the funds used to purchase the real estate were acquired. The investor must also include a bank statement proving receipt of the sale proceeds.
- The investor must provide the purchase contract and sales contract for the
- To establish ownership of the property, the investor must submit an ownership certificate as well as any tax certificates to evidence the payment of taxes related to the property.
- The investor must also include with the application his or her personal income tax returns for the previous five years. An investor legitimately unable to provide these records, as in countries where government records are destroyed after a certain length of time, may instead furnish a declaration from a tax professional from his or her country of origin detailing the necessary information and stating why official records are no longer
An investor using real estate sale proceeds to fund an EB-5 investment will likely need to provide additional documentation to more fully trace the path of the investment funds prior to the purchase of the real estate. For example, an investor who has been gifted the real estate property will need to submit a gift letter and capital source statement from the person who has bestowed the property, whereas a person who has purchased real estate using his or her salary will need to support that claim with employment records and additional bank statements.
As is the case with any other documents necessary for the I-526 petition, source of funds documents should be prepared with the assistance of experienced financial advisors and attorneys knowledgeable about the specific requirements of the EB-5 Program. In addition to increasing the chance of successful adjudication of an I-526 petition, such assistance can ensure that investors and regional centers are in compliance with the laws of the United States and investors’ countries of origin.