Investors in the EB-5 program are required to demonstrate through an I-526 petition that all their EB-5 capital has been obtained from legitimate (lawful) sources. Collecting all the necessary documentation often proves difficult and time consuming, depending on the investor’s sources.
As a result, meeting the source-of-funds requirement for the EB-5 Immigrant Investor Program can wind up being one of the most sticky parts of the application process.
EB-5 program applicants are required to invest a minimum of either $1.8 million or $900,000, depending on whether their project is within a targeted employment area (TEA).
Keep in mind that, while these are large sums of money, prospective investors are not required to have the entire amount on hand in liquid cash from the moment they submit their application.
In fact, one strategy many EB-5 investors employ is selling property and/or assets when liquid capital is necessary for their investment.
Common Sources for EB-5 Capital
Here are some of the most common sources EB-5 investors tap for capital:
- Family donations
- Inherited money
- Investments in stocks, retirement accounts, and other assets
- Loans obtained either from a business, from a financial institution, or through personal sources
- Property and other asset sales
- Revenues from a business
- Wages and salary earnings
For younger foreign national investors, gifts from family are a common source of EB-5 capital. It is not uncommon for parents to donate investment funds to their child so they may seek U.S. permanent residency through the EB-5 program.
Family donations are an exceptionally preferred option when a child has already set their sights on one of the many world-renowned universities in the United States. Not to mention, many colleges offer in-state tuition savings to eligible EB-5 visa holders.
Ensuring the Proper Documentation for Fund Sources
Often, investors in the EB-5 program use a combination of the sources listed above when pulling together the funds needed to invest.
For this reason, investors are advised to speak with an experienced immigration attorney who is highly familiar with the EB-5 program. They can help you determine your best fund sources to trace and point you in the right direction when it comes to ensuring minimal time and stress throughout the process of proving your capital is legal.