What problems can arise if someone in the United States gifts funds to an EB-5 investor living abroad?

The EB-5 visa investment program’s main requirements are to invest the minimum required amount, fulfill the job creation criteria, allow invested funds to remain at risk, and use funds that were sourced lawfully. This last requirement is particularly important to the success of an EB-5 investment. United States Citizenship and Immigration Services (USCIS) requires all EB-5 investors to provide ample evidence that they used lawfully sourced funds to finance their projects.

To prove that their funds were legally sourced, EB-5 investors must include lengthy documentation with their Form I-526 that traces the invested funds back to their sources. EB-5 investors can use a wide variety of sources to finance their projects (including loans, stock proceeds, real estate sales, salary payments, and gifts), but must always provide exhaustive evidence proving the legality of the funds.

If an EB-5 investor wants to use gifted funds to finance their project, they will have to document the process with great care. The gift should be accompanied by a deed of gift, and the gift giver must be ready to prove that they obtained the funds lawfully. If the gift giver is in the United States and sends funds to an EB-5 investor who is living abroad, both of them must make sure to follow the necessary remittance, tax, or other financial regulations governing the transaction. If they fail to comply with all of the necessary regulations, the EB-5 investor may receive a Request for Evidence (RFE) after submitting their Form I-526. The I-526 petition may even be denied.

EB-5 investors who use gifted funds to finance their projects will likely have to present a capital source statement showing that the funds were gifted to the investor and another capital source statement showing how the gift giver obtained the funds originally. It may also be necessary to provide a gift letter from the giver and a bank statement proving that the funds were indeed deposited.