Understanding EB-5 Requirements on Lawful Sources of Funds

United States Citizenship and Immigration Services has directly said that every investor participating in the EB-5 Immigrant Investor Program is required to “demonstrate by a preponderance of the evidence that the capital invested, or actively in the process of being invested, in [a] new commercial enterprise was obtained through lawful means.” This statement is the essence of the program’s lawful sources of funds requirement. In simplest terms, each EB5 investment participant must submit evidence proving their capital is lawful.

Providing the necessary documents to prove that an investor’s capital originated from lawful sources helps to ensure the United States is not promoting crime through its green-card-by-investment program. As such, participating foreign nationals and their eligible family members must abide by these rules if they want a chance to secure U.S. green cards. Unfortunately, depending on what types of funds an EB-5 investment is comprised of, the process of securing the appropriate source-of-funds paperwork can be time-consuming and challenging to gather. So, while the EB-5 program is historically one of the most straightforward paths to permanent residency in the United States, fulfilling this and all other EB-5 investment requirements isn’t always simple.

Ultimately, EB-5 investors are laying $1.8 million on the line (or $900,000 when they select a program-approved project in a targeted employment area, or TEA), and that’s no small amount. Because of this, it is vital that EB5 investment participants include the proper documentation on the funds in the right way and at the right time the first time around. With this kind of due diligence and careful project selection, investors not only have an opportunity to obtain green cards but also garner robust returns on their EB-5 investment.

Gathering Lawful Source-of-Funds Documents Takes Time

Because every investment is unique, the time it takes an EB-5 investment participant to collect the necessary source-of-funds documents varies. Factors such as country of origin and actual sources of funds will heavily play into overall timing. A conversation with an experienced EB-5 immigration attorney can help with choosing the most suitable sources of funds to meet an investor’s goals and ideal timeline.

Even in the earliest investment planning stages, EB-5 investment participants should already be considering the legalities of their capital fund sourcing. A good immigration lawyer will request the proper proof of lawful sources of funds well ahead of the actual I-526 petition submission. It is important to recognize that any delays an investor experiences during the document-collection process will result in delays in their I-526 petition filing as well.

No Such Thing as Too Much Source-of-Funds Documentation

One of the greatest benefits to working with an experienced EB-5 legal team is having access to guidance on the type of documentation an investor needs for each part of the investment process. Particularly when it comes to source-of-funds documents, though, a good rule of thumb is “there is no such thing as too much source-of-funds documentation.”

Unsure about whether a document is necessary? Include it in your submission. Better safe than sorry, and EB5 investment participants are never penalized for providing too much documentation proving their capital is lawful. Additionally, any document that could potentially sway an adjudicator’s decision in an investor’s favor is surely a good thing.

Another common type of question from investors revolves around missing or inaccessible documentation. For instance, say an investor is unable to provide the necessary records proving source of funds due to a financial institution’s archiving policies. Perhaps they delete records after a certain period of time. There are viable workarounds in these scenarios. For example, an investor may provide a letter explaining why the documents are unavailable, alongside a sworn affidavit from their long-time accountant detailing the same information a missing bank statement would have provided and a document from the bank stating their archive procedures.

While this kind of creative approach to piecing together the paper trail on the lawful source of capital funds may require a taller stack of documents, it is still a viable path to securing an investor’s future in the United States.

Documents Differ Based on the Investor and Their Capital Sources

One of the most challenging aspects of offering blanket advice on meeting the source-of-funds requirement is that there is no set list of required documents. While there are some general documents USCIS accepts as proof of lawful sources of funds, there is nothing on the books saying X, Y, and Z documents are required for every single EB-5 investment. Documentation will vary based on the type of EB5 investment, the specific investor, and their individual sources of capital.

Financial procedures fluctuate based on country, for instance, and the accessibility of some documents is easier or more difficult in certain locations. Another example is the need for translation. When an investor’s source-of-funds documents aren’t in English, certified translations of the documents are also required.

The most important point to remember is that USCIS will allow the use of EB-5 investment capital sourced from any number of origins as long as it is proven to have been derived from lawful means. Below is a list of only some of the most common documents that can constitute viable documentation for an EB5 investment participant’s lawful sources of funds:

  • Accounting records from the investor’s own business
  • Bank statements
  • Employment records
  • Investment records
  • Loan documentation
  • Records of private transactions, like gifts
  • Sale of asset records
  • Tax returns