Who is allowed to gift funds to an EB-5 investor?
The EB-5 visa program does not have any restrictions on who can gift funds to an EB-5 investor. The only requirements are that the gifted funds can meet the source of funds requirements—meaning they were obtained and transferred lawfully—and that the benefactor is identified.
Source of Funds Requirement
The purpose of the source of funds requirement is to ensure that the funds being invested in the United States through the EB-5 visa program are obtained legally. As such, source of funds documentation is part of submitting Form I-526—Immigrant Petition by an Alien Investor. If United States Citizenship and Immigration Services (USCIS) does not have sufficient documentation to prove the legality of the investment funds, a request for evidence (RFE) will be sent to the EB-5 investor. It is best for investors to ensure their I-526 petition is complete and accurate, as RFEs may cause delays in adjudication.
Industry Changes as a Result of the EB-5 Reform and Integrity Act of 2022
The EB-5 Reform and Integrity Act of 2022 made significant changes to the EB-5 industry. In regards to gifting EB-5 investment funds, the act requires that all loans and gifts be made in “good faith.” The act also requires that all funds used to pay administrative costs and fees also be sourced, and that seven years of investor tax refunds must be provided as part of the I-526 petition. Lastly, anyone who gifts funds to an EB-5 investor—known as a benefactor—must be identified and subject to providing source of funds evidence.
Documenting the source of funds simply means providing a trail of the money from its point of origin to the new commercial enterprise (NCE). As an example, if a benefactor gifts funds to an investor from an inheritance, there must be a trail showing the deposit into the benefactor’s account, the transfer to the EB-5 investor’s account, and the subsequent transfer to the NCE. USCIS provides a list of acceptable documentation that can be submitted as source of funds evidence. However, it is in the best interest of the investor to work with an immigration attorney who can help guide them through the process.