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EB-5 Question of the Week: Can gifted funds be used for the purpose of an EB-5 investment?

Yes, you may use gifted funds to satisfy the minimum capital contribution requirement of the EB-5 Immigrant Investor Program.

The EB-5 program allows foreign nationals to apply for a Green Card with an investment of $800,000 in a new commercial enterprise in the United States. The EB-5 program unlocks a host of educational benefits for its participants, including but not limited to (1) higher acceptance rates to U.S. academic institutions, (2) free public education for children up to the age of 18, (3) lower tuition costs for U.S. universities as compared to international students, (4) ability to apply for internships and research positions open to U.S. persons, and (5) better career opportunities upon graduation. Given these many benefits, families often partake in the EB-5 program for the benefit of their children. As such, it is highly common for parents to gift funds to their children for the purpose of their participation in the EB-5 program. 

If the capital contribution for the purpose of your EB-5 investment is a gift received from a donor, you must demonstrate that the source of funds of the donor used to provide the gift to you is lawful. Along with documentation showing that the source and path of funds are lawful, you must also submit a gift affidavit, also known as a gift agreement, to the United States and Citizenship Services (USCIS). A properly drafted gift affidavit must state the following information: (1) the names of both the donor and gift recipient, (2) the relationship of the donor and recipient, (3) the voluntary nature of the transaction, (4) the gift amount (i.e., a portion or full amount of capital contribution and administrative fees), (5) the irrevocable nature of the gift, (6) a declaration from the donor that the gift will be placed in an “at risk” investment, (7) declaration that there are no side deals, conditions, or understandings between the donor and the recipient, and lastly (8) the addresses and contact information of both the donor and the recipient. Additionally, both parties must sign the gift affidavit.

USCIS will examine the source of funds of the donor; therefore, all required information and documentation including but not limited to bank statements, salary certificates, bonus letters, dividend distribution letters, tax returns, and other financial documents must be included in the EB-5 application.

If you are interested in finding out more about the U.S. golden visa program and whether you and your family qualify, contact our team today for a free consultation.

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