In the case of a loan or gift, who must prove that the funds were sourced lawfully?

Even though the EB-5 program allows investors to fund their projects using many different sources (including salary payments, real estate sales, stock proceeds, inheritances, and even cryptocurrency sales), investors must always provide ample evidence that the funds were sourced legally. When submitting their I-526 petition to United States Citizenship and Immigration Services (USCIS), investors should include exhaustive documentation that traces their funds back to their origin and confirms their legality.

USCIS considers gifted capital and loaned funds as appropriate sources for EB-5 investments. To prove that these sources of funds are legal, the investor must procure documentation from the lender or gift giver that shows how the funds were obtained originally. In the case of loans, the investor must also prove that they lawfully obtained the collateral needed to secure the loan.

Of course, further documentation is needed to trace the invested funds back to their origin. For loaned funds, the investor will likely have to submit their personal income tax returns for the past seven years, a loan contract that outlines the terms of the loan in detail, a capital source statement that shows that the investment funds were indeed derived from the loan, and bank statements proving that the loan was deposited into the investor’s account. If the lender in question is an individual and not an institution such as a bank, it may be necessary to submit documents such as employment records or sales contracts to demonstrate that the lender obtained the funds lawfully. There should be no contradictions between these documents.

For gifted funds, investors must show that they are not under obligation to pay back the funds. To prove this, they may have to submit a gift letter from the giver. Other important documents proving the legality of gifted funds include capital source statements demonstrating that the funds were given to the investor and bank statements that show the transaction.