EB 5 Funding: Evidence Required For Sources Of Funds

In order to combat the problem of an illegal source of funds USCIS requires extensive evidence from EB 5 investors to provide a trail of proof that the EB 5 funding came from lawful sources.

This includes requiring up to five years of tax returns to prove the lawfulness of EB 5 funding.

Remember, when thinking about EB 5 funding, what ‘Probative Value of Income’ means: When you submit documents to make a claim, such as an income tax return, make sure that the source of the documents has value. If the source of your income tax return is from the government that will have a higher “probative value” or credibility than if the source was a family member or friend. Bank statements and records also have high probative value. A letter from a friend will have extremely low probative value if not backed up by other, more official records.

This is to show that your EB 5 funding came from lawful sources.

USCIS has strict processing procedures to ensure that funds came from lawful activities.

These documents of proof for EB 5 funding include:

Income accumulated from employment.

Documents that show proof of earned income such as:

• Bank statements and deposits showing salary;
• Employment certificates; and,
• Proof of tax payment.

Income from investments.

The investor should provide proof that:

• He or she bought the investment with money that came from lawful sources;
• He or she has documents showing that they are the true owner of the investment;
• They have records of the capital earned from the investment by providing stock certificates, dividend letters, and account statements. Or if the investment was in a business then an investor will need to provide proof with corporate tax returns with payouts to owners; and,
• They have bank documentation of investment sale.

Capital earned from sale of a property.

• An investor must show that they owned the property by providing the purchase contract, deed on the property, or records of paying property tax;
• An investor must show proof that the funds used for the purchase of the property came from lawful sources; and,
• When the property is sold, the investor must provide evidence from the sale by providing documents of the sale and taxes paid on the sale.

Proof of property ownership and loans.

An investor must provide proof of:

• Purchase agreement;
• Record of a loan or mortgage contract and proof of payments;
• Evidence of lien on ownership records;
• Records that compare the value of the loan to the value of the property for appraisal purposes; and,
• Other bank records that show the investor is liable for the loan repayments.

Company ownership or company loan.

• An investor would be required to provide proof of that the capital used to purchase the company or ownership in the company came from lawful sources.
• They will need to provide foreign business registration records; corporate, partnership, and personal tax returns from the last five years; certified copies of court judgments, pending cases, and administrative proceedings from the last 15 years.
• For a company loan an investor would need to provide evidence that the company possessed the assets to loan money to the investor. For shareholders, proof could be in the form of bank statements, shareholder reports approving the loan, audit documents.

Money from gifts or an inheritance.

• Many parents gift their children money for EB 5 investments. In these cases, the sources of funds must still trace back to lawful sources. The investor must prove that their parents obtained the capital lawfully by the pertinent methods listed above.

Additionally, USCIS not only requires documentation of the lawful source of funds, but requires evidence of the lawful path of the funds. That means that EB 5 investors must document the transfer of funds to the new commercial enterprise in the U.S. The EB 5 investor must ensure the funds arrived in by lawful means.