EB-5 Qualifications

I-526 Petition: What Does ‘Lawful Source of Funds’ Mean?

Clare LithgowBy 3141 views
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lawful source of funds

Part of the requirements for filing an I-526 Petition is providing evidence of the investor’s ‘lawful source of funds.’ Here’s what that means.

According to the instructions for the form, when filing an I-526 Immigrant Petition by Alien Investor, an applicant must provide evidence that the capital they invested or are actively in the process of investing were obtained through lawful means.  

A very basic overview of evidence from the USCIS website: 

      • Evidence the petitioner’s funds are from a lawful source.  As applicable, petitioner must provide:
        • Foreign business registration records
        • Corporate, partnership, or any other entity tax returns filed within last 5 years
        • Personal tax returns including income, franchise, property, or any other kind filed within last 5 years
        • Evidence identifying any other source(s) of capital
        • Certified copies of any judgments or evidence of all pending governmental civil or criminal actions, governmental administrative proceedings, and any private civil actions involving monetary judgments against the petitioner in or outside the U.S. within the past 15 years
      • Evidence of the path of petitioner’s funds from the source to the NCE including, but not limited to:
        • Wire transfer records
        • Bank statements showing where funds originated
USCIS may require applicants to submit far more evidence than what they state above. Consult with an attorney about your specific case.
Source of funds evidence can be a complicated and tedious process. Depending on what sources of capital, or combination of sources of capital, an applicant chooses, they may have to submit a large amount of documentation going back multiple years.

A few examples of the types of documents that may be required based on 5 commonly used sources of funds:

Salary earnings: Tax returns, W-2s, employee contracts, bank statements showing salary deposits, etc.
Sale of business: Business registration, documentation of sale of business, proof of ownership, directorship, or officership, accountant’s appraisal of the business, etc.
Investments: Documentation of investment accounts for three or more years, stock certificates, bank account statements, etc.
Sale of property: Buy/sell agreement, ownership certificate, deed tax certificate, bank account statements, loan contract, etc.
Loan: Bank statements, loan documents, asset appraisals, lender’s source of capital, etc.
These are just a few common sources of funds. Investment capital may come from a variety of sources. A few more examples of sources include: gifts, inheritance, divorce income, and lawsuit judgments.

Note on gifting EB-5 funds: Parents, relatives or friends may wish to gift investment funds. In these cases, the burden is on the donor to prove that the funds for the gift came from lawful sources.

Related Reading: EB-5 Visa Bulletin for April 2020

Tips for completing the lawful sources of funds section of the I-526 Petition:

  • Work with an experienced immigration attorney to determine which sources of funds to use for your EB-5 investment and what evidence to prepare.
  • Keep potential investment funds in separate accounts.
  • Plan ahead to have all the documents translated.

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