An EB-5 investor’s company cannot be the source of EB-5 investment funding, even if the investor is the sole owner of the company. One of the key requirements of the EB-5 program is that the capital invested to obtain an EB-5 visa must belong to the investor; thus, the capital must be the investor’s personal funds. Because businesses and their owners are separate entities, business funds cannot be considered personal funds and are therefore not allowed as EB5 investment funds. However, an investor can use salary and distributions from the business to fund the investment. The investor can also borrow money from the business through a member or shareholder loan.
In the eligibility requirements set out in its Policy Manual, United States Citizenship and Immigration Services (USCIS) notes two points relevant to business capital: (i) “the immigrant investor must establish that he or she is the legal owner of the capital invested,” and (ii) “capital can include the immigrant investor’s promise to pay (a promissory note), as long as the immigrant investor is personally and primarily liable for the promissory note debt and his or her assets adequately secure the note.” This means that although business funds are not suitable for EB-5 investments, a loan from the business to the investor is suitable.
Proper source-of-funds documentation is a vital part of all I-526 petitions, and this would also be the case when the investment funds derive from a loan from a business. In addition to providing proof that the loan itself is legal, the EB-5 investor may need to provide evidence that the business funds used for the loan were legally obtained by the business. For example, the investor may have to provide evidence such as copies of invoices and tax returns to show that the business legally earned the money and paid all taxes due.
Most investors find source-of-funds documentation challenging, so it is best to work with an immigration attorney with EB-5 experience when preparing the I-526 petition.