In 1990, Congress established the EB-5 Immigrant Investor Program to boost local U.S. economies while offering foreign investors a path to permanent residency in the United States. Potential investors must invest $1.8 million in regular EB-5 projects, or $900,000 in targeted employment area (TEA) projects, to be eligible for a visa under the EB-5 program. Eligible investors can qualify for a green card for themselves, their spouse, and their unmarried children under the age of 21.
However, if a potential investor does not have the funds to invest in an EB-5 project, they can still make an investment with funds gifted by generous relatives. These funds still must be lawfully sourced, and the recipient should not be expected to repay the amount or do anything else in return for the money. The EB-5 applicant does, however, have to prove to United States Citizenship and Immigration Services (USCIS) that the gift they received meets these criteria. One of the more common examples of an investor being gifted funds is when parents who are not interested in receiving a green card themselves gift their children capital to make an EB-5 investment and fulfill their U.S. immigration dreams.
Satisfying the Source-of-Funds Requirement
USCIS requires documentation to prove gifted funds are lawfully sourced before they can approve an I-526 petition. This documentation must include the original source of the funds—in the case of gifted funds, this means proving the donor lawfully earned the gifted capital. USCIS guidelines state that there must be evidence to suggest the funds “more likely than not” came from a legal source, and showing the transfer between the person who gifted the funds and the recipient is not sufficient.
Proving the Legitimacy of a Gift
For gifted funds to be accepted as EB-5 investment capital, the recipient must show they do not have to repay the gift in any form. To this end, the donor and recipient must have a written agreement stating that the gift is “irrevocable” and the recipient is not obligated to repay the gift at any time or in any fashion. The written contract can be in the native language of the donor but must be translated into English for the EB-5 investor’s I-526 application. USCIS is less critical of gifts from family members than gifts from friends or business associates.
Proving the Lawful Source of Funds
Any EB-5 investor must prove the lawful source of their investment capital, and gifted funds are no exception. To show the lawful source of capital, EB-5 investors must provide legal documentation of their capital, which can include bank statements, loan documents, property records, employment records, investment records, and tax returns. All of these documents must be translated to English for an investor’s application.
Consult EB-5 Immigration Counsel for Help
Prospective EB-5 investors are encouraged to seek legal advice to prove their gifted capital has been legally sourced because USCIS regulations can be complicated. An experienced EB-5 immigration lawyer can help streamline this process, as it is one of the more convoluted parts of the EB-5 application. Having a lawyer who is knowledgeable about how to prove to USCIS that gifted capital is legitimate can help an EB-5 investor succeed and obtain U.S. permanent resident status.
