An EB-5 investor’s current business cannot invest in an NCE on their behalf because the funds used in an EB-5 investment must be the personal funds of the investor. Even if the investor owns the business, the business and the investor are separate entities, so business funds belong to the business. However, the investor can use funds from the business paid out as salary or a distribution to the investor, or the business may loan the funds to the investor in the form of a member or shareholder loan.
According to the EB-5 eligibility requirements set out in the United States Citizenship and Immigration Services (USCIS) Policy Manual, “the immigrant investor must establish that he or she is the legal owner of the capital invested.” Business funds fall outside the scope of this requirement. The requirements further state that “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.” Therefore, a loan to the investor from the business would be acceptable as EB5 investment funds.
Because investors’ circumstances differ so broadly, USCIS does not provide a list of acceptable forms of source-of-funds documents. Investors must also often prove, within reason, that all funds that led to the accumulation of the investment amount were lawfully obtained. For example, if a business owner sold their business and used those funds for an EB-5 investment, they would have to provide evidence of not only the sale of the business but also that the business was initially established with lawfully obtained funds. In the case of a loan from the business, the investor may have to prove that the business earned the loaned funds legally and paid all the taxes due.
Because of the challenges related to proving the sources of EB5 investment funds were lawfully obtained, it is best to work with an EB-5 immigration attorney when preparing Form I-526E.
