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How can money gifted from the U.S. be used for EB-5 investment?

I am working as a software engineer and I do not have anything on my own to invest to apply for EB-5. However, a few of my cousins who are now U.S. citizens are ready to gift me the required amount. Am I allowed to use this money for an EB-5 investment in a U.S. business, considering that the funds are coming from the United States? Can I reinvest the funds in a project which my cousins will be affiliated with? Finally, do my cousins need to provide reasons for gifting me the money beyond applying for EB-5?

Answers

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    Ed Beshara

    Immigration Attorney
    Answered on

    The funds can be gifted to you from sources in the United States. You would still need to authenticate the lawful source of these gifted funds. Your personal investment can be in an EB-5 project in which your cousins are also owners.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    Gifts are an acceptable method to obtain investment funds, but you will need the assistance of an EB-5 immigration attorney to assist you with the proper documentation necessary.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    It does not appear it is truly a gift as your cousins seem to expect you to reinvest the money in the company as a direct EB-5 investment. If if is truly a gift and they take the retained earnings out of the company and gift it to you without anticipation for a gift to be returned, then as long as the cousins are able to demonstrate funds gifted are from a lawful source of funds (U.S. business lawfully registered and conducting business in the United States and they either receive salaries or dividends and declare applicable income taxes), then they should be able to gift you the funds. They should consult a tax attorney who will advise them on proper gifting documentation to document the gift transactions and also advise them on how to file IRS Forms 709 to report gifts (and use applicable exemptions to avoid federal gift tax). You are also advised to consult an EB-5 immigration attorney for I-526 preparation purposes.

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    Parisa Karaahmet

    Immigration Attorney
    Answered on

    So long as the persons gifting the funds complies with local tax and monetary transfer laws, anyone can gift you money for the purposes of making an investment; however, they will be required to show that the source of the gift was lawful.

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    John J Downey

    Immigration Attorney
    Answered on

    The money may be gifted to you, but is under the same requirements as if it came from abroad. The source of the funds must be lawful and the proper documentation must be shown.

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    Gifted funds may be used in an EB-5 investment as long as the donor(s) provide evidence of how the funds were lawfully obtained. If they can provide such evidence and the funds are truly a gift and do not need to be repaid (which would be a loan), then the requirements are met. It is not clear how the USCIS would view a situation in which your cousins use profits from Company A to give to you to be reinvested by you into Company A. There might be an objection that this is not really a true investment, but merely a reinvestment of profits, which normally does not count toward EB-5 unless the funds are withdrawn by the owner or owners, who then report and pay tax on the earnings and then reinvest them. An experienced immigration attorney would be able to advise you on the particulars and how to best structure and document this process.

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    Stephen Berman

    Immigration Attorney
    Answered on

    I suspect that this would be rejected, because it is not an outright gift, but rather they are getting the money right back from you.

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    Dale Schwartz

    Immigration Attorney
    Answered on

    If it is truly a gift, it should work OK. You need advice from an experienced EB-5 lawyer. Your cousins will have to show that they got the money legally.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    Gifts can serve as the source of funds for your EB-5. Your attorney will provide you with an Affidavit of Gift. Note that each person that gives you a gift will need to provide documentation that demonstrates the lawful source of of the gifted funds.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    They can gift or loan you the money provided it is not secured by the project in which you are investing. You will need to show that their money was lawfully earned.

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