The U.S. EB-5 Immigrant Investor program allows for an investor, his/her spouse and unmarried children under the age of 21 years to obtain U.S. residency and Green Card. After residing in the U.S. for a few years the family will be eligible to apply for their U.S. passport. For families that missed the June deadline there is a short window of opportunity to file under the $500,000 rules this September.
How to get your application ready?
The first step for prospective investors is to ensure that they consult with a qualified EB-5 consultant. It is pertinent for the success of their applications to obtain quality advice that will help steer the application towards the right direction. The EB-5 consultant will inform the investor on the required documents needed to complete their file, provide the investor with project options to invest in, and be the intermediary between the immigration attorney and the investor.
Once the prospective investor has an experienced EB-5 consultant they must go through the available projects and conduct their own due diligence. While the EB-5 consultant would have vetted the projects they present, the onerous is on the investor to ensure that the project is right for them and their family. Additionally, the EB-5 consultant is by law not allowed to choose a project for the investor. For it to be a true investment the investor must conclude on their own merit.
The last stage is preparing a detailed source of funds declaration for the United States Citizenship and Immigration Services (“USCIS”). The source of funds declaration is a statement to USCIS that explains the origins of the capital investment amount and how the investor acquired the funds. Under the program the investor must prove that the funds were obtained legally and that they rightfully belong to him/her. It is thus a cumulative effort between the investor and the EB-5 consultant to ensure that the documents submitted reflect truthfully the investors path of funds.
Source of funds
The USCIS provides a clear directive as to how capital investment will be qualified as legal under the EB-5 program.
- Gift – The investor can use funds obtained from a friend or family member as a gift. The funds will have to be tracked and traced that they legally belonged to the friend or family member prior to them gifting the investor. The gift will also be an irrevocable gift and both the investor and gifter would need to complete and sign a gift affidavit which expressly lists the terms and conditions of the gift.
- Unsecured loan – The case of Huashan Zhang v. United States Citizenship and Immigration Services, No. 19-5021 (D.C. Cir. 2020) provided the precedent that unsecured loans are an acceptable source of funds. This means that an investor can obtain a personal loan based on their existing assets as collateral and use the funds to pay for their EB-5 investment.
- Salary Savings – The prospective investor can use salary earnings as a source of funds. They would need to provide salary certificates, employment contracts and bonus letters if applicable.
- Business dividends or earnings – Business owners can use funds obtained from the business or shareholder dividends as a source of funds.
- Investment dissolution – Investments in stock, cryptocurrency, real estate can be used as a source of funds so long as the prospective investor can accurately account for where they obtained the original funds used to start the investment portfolio.
September 2021 application rush