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EB-5 Question of the Week: How do I prove the lawful nature of the source of funds I will invest?

The EB-5 Immigrant Investor Program of the United States provides an opportunity to foreign investors and their qualifying dependents (spouse and children under the age of 21) to obtain U.S. Green Cards with an investment of $800,000 in a government pre-approved real estate project. With a Green Card in hand, a family can freely reside and work in the U.S. and take advantage of a plethora of benefits in this land of opportunity, including but not limited to access to top quality education and access to world class healthcare. The investment of $800,000 is returned to the family after approximately five years of benefiting the U.S. economy.

Prior to submission of your EB-5 application (Form I-526E) to the United States Citizenship and Immigration Services (USCIS), you must determine whether you are eligible to participate in the program. While the program remains one of the most flexible immigration programs to the United States, it requires investors to show that the “capital” used for investment in the U.S. is from lawful sources and can be legally traced. Pursuant to the Immigration and Nationality Act (INA or the Act) section 203(b)(5) and Title 8 of the Code of Federal Regulations (8 CFR) section 204.6(e), “capital” is defined as “cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the alien entrepreneur, provided that the alien entrepreneur is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. All capital shall be valued at fair market value in United States dollars. Assets acquired, directly or indirectly, by unlawful means (such as criminal activities) shall not be considered capital for the purposes of section 203(b)(5) of the Act.”

In addition to your personal background information on the I-526E petition, you must provide information showing that the investment funds are derived from a legitimate source. In establishing that the capital was acquired through lawful means, you must provide evidence demonstrating the direct and indirect source of your investment capital. This financial background information varies on a case-by-case basis, but generally includes:

      1. five year personal bank statements,
      2. documentation concerning the actual source (gift, inheritance, bank loan, etc.),
      3. proof of ownership in any businesses and business licenses (if applicable),
      4. audited financial statements (if applicable),
      5. tax returns (if any), and
      6. salary certificates / bonus letters (if applicable).

An investor’s funds must originate from a lawful source. An investor must have sufficient proof of the lawfulness of the funds and must prove the same to USCIS with a preponderance of the evidence. Should a prospective investor fail to provide the necessary documentation to prove that the funds were obtained legally, the investor’s I-526E petition is at risk of denial by USCIS.

In addition to the lawfulness of the investor’s source of funds, an investor must also show through sufficient evidence that the path of funds is lawful. This can be shown through bank transfer forms/wiring instructions and bank statements showing that the investment funds exited the investor’s bank account and were transferred to the commercial enterprise in the United States.

As each individual investor’s petition is different based on the source of their funds, investors are highly recommended to work with an experienced consultant in serving as their active guides throughout the application process. Our team of U.S. licensed lawyers and professionals have over a decade of experience in assisting individuals and families apply for U.S. residency via the EB-5 program. If you are ready to start your migration journey with The American Legal Center of Dubai, contact us today for more information.

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