For the EB-5 program, investors must make an initial capital contribution for an investment known in EB-5 terms as a New Commercial Enterprise (NCE).
The amount is set at $800,000 for investments in Rural or High Unemployment TEAs (Targeted Employment Area) and $1,050,000 for non-TEAs.
USCIS requires investors to prove in the I-526E petition that their investment capital is legally sourced. The funds need to have been sourced in a manner that is legal in the EB-5 applicant’s home country as well as in the United States. This includes income from employment, assets like stocks or patents, or funds in bank accounts or that are gifted.
All sources must be traceable to comply with anti-money laundering regulations. Non-English-speaking investors must have all documents officially translated.
The scrutiny by USCIS extends beyond just the investment capital. They also verify the lawful source of administrative fees associated with EB-5 projects.
Petitioners must meet the “preponderance of the evidence” standard, showing that it is more likely than not that the investment funds are legally obtained. However, aiming for a higher proof standard strengthens the case.
Documentation is key for EB-5 visa applications. This includes individual tax returns for the past five years and audited financial statements. Also, detailed records of transactions for assets leads to a stronger petition.
These assets can range from bank accounts, real estate, business ventures, and investments. They can also include employment income, inheritances, gifts, divorce and legal proceedings, and both secured and unsecured loans.
Here is a list of typical documents to support the source of funds.
Earnings from Employment
– A detailed statement indicating the funds for investment are accumulated from earnings. This should include the employer’s name, salary records/paystubs, and total earnings accumulated.
– Bank records evidencing salary deposits.
– Statement from spouse if they supported living expenses, allowing the investor to save from their salary.
– Employer-issued contract and income verification corroborating salary records in the statement.
Proceeds from Property Sales
– A comprehensive statement explaining funds available from selling property, detailing the property’s acquisition such as original purchase funding sources
– Bank record showing receipt of sale proceeds.
– Agreements for the purchase and sale of the property
– Certificates of property ownership and related tax documentation
Returns from Stock Sales
– A statement outlining the acquisition and sale of stocks, including how sale proceeds were obtained.
– Bank records confirming deposit of stock sale proceeds.
– Documentation of the funds’ legal source used to initially purchase the stock. Admissible documents include salary records or property sale details.
– Contracts for stock purchase and sale and share transfer agreements tracing the stock’s ownership .
Gifts
– A statement that funds were received as a gift and identify the donor. The giftor must also include how they acquired the funds.
– Donor’s statement detailing their fund source, matching the investor’s statement.
– Bank records showing deposit of the gifted funds.
– Gift confirmation letter from the donor, stating the amount and no repayment requirement.
Inheritance
– A statement clarifying funds were inherited, identifying the deceased and their funds’ source.
– Evidence of relationship to the deceased, such as a death certificate
– Copy of the Will and Bank statements showing fund transfer from the deceased’s account to the heir.
– Documentation proving the deceased’s lawful acquisition of the assets, like earnings statements or tax records.
– Affidavits or endorsements from credible sources if no documentary proof exists.
Borrowed Funds
– A statement outlining loan specifics and collateral; for private loans, identifying the lender and their fund source.
– Loan agreement.
– Bank records indicating loan amount deposit.
– Private lender’s statement detailing their fund source, aligning with the investor’s statement.
– Ownership deeds, valuation certificates of assets used as collateral.
– Official records and tax documents proving that taxes were paid to secure the loan against the assets.
– Verification that assets used for collateral were lawfully acquired.
In addition to verifying the source of funds, investors must also document the legal pathway of these funds. This includes the transfer process to the New Commercial Enterprise in the United States. This can be complex for investors from countries with strict capital outflow restrictions, often requiring multiple transactions.
The bottom line for EB-5 investors is ensuring that the source of funds (SOF) and source of wealth (SOW) are thoroughly documented and traceable.
Key takeaways include the necessity of providing detailed documentation such as tax returns, bank statements, and records of real estate transactions.
When selling your home or other property, the sale price must be clearly reported, often with the assistance of a real estate agent, to meet the United States Citizenship and Immigration Services (USCIS) requirements.
Financial institutions involved in these transactions play a critical role in verifying the legitimacy of funds, and financial transactions. This is essential for compliance with anti-money laundering (AML) regulations.
Property owners must be prepared to submit additional documentation, such as property taxes and public records to support their claims.
If some documents are missing, an investor can submit a detailed declaration explaining the unavailability of required documents. While USCIS may accept such declarations, it is better to avoid this route and provide comprehensive documentation wherever possible.
