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What does it mean to prove "lawful source of funds" for EB-5?

I am considering relocating to the United States through EB-5 investment. I keep hearing that proving the "lawful source of funds" is by far the biggest issue for investors. What does USCIS mean by "lawful" source of funds? Do they take into account the fact that there might be different business practices in other countries?

Answers

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Funds must be acquired from a lawful source as opposed to funds from a criminal or other illegal activity. Examples may include earnings, distributions from a business such as dividends, sale of real estate, securities, or business interest, a loan secured by an investor's personal assets, an inheritance, a gift of funds, etc. Each EB-5 investor's situation is case-specific and country-specific. You should contact a U.S. EB-5 immigration attorney who can guide you further.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    They are concerned with obtaining funds through human trafficking, drugs, weapon sales, and the like. Variations in business practices will be explained.

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    Ian E Scott

    Immigration Attorney
    Answered on

    One of the EB-5 requirements is that the investor must show that the funds used to invest came from a legitimate source. Congress imposed this requirement to avoid giving green cards to applicants where the money came from illegal activity. Lawful means that the money was obtained through legitimate means and not through illegal activity. While USCIS will take into account different practices in different countries, they will not accept a petition where a practice in a different country is illegal in the United States. For example, if an investor obtained funds from a bribe, that would not be acceptable, even though that may be common practice in the local jurisdiction.

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    John J Downey

    Immigration Attorney
    Answered on

    What they want to prevent is "money laundering". For example, money initiated through the drug trade or arms sales, etc. If you provide a satisfactory explanation of the foreign business practice, it should be alright.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    No need to panic over lawful source of funds they merely want to see the money was legally earned and they do realize that in many countries business practices vary. That is the importance of having a good, experienced attorney.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    USCIS does take into consideration different business practices, which is why there are many ways to prove legal source of funds and tracking. In most countries, the people who have a net worth of $1 million or more to be able to do EB-5 are mostly business people or professionals with substantial income, savings and investments. USCIS just wants to see and track that the EB-5 investment was obtained through these legal means, not by gambling, drug trafficking or some such illegal activities. How you could show this clearly to get your case approved is between you and your EB-5 lawyer to document based on the lawyer's expertise and experience.

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    Anthony Korda

    Immigration Attorney
    Answered on

    Funds used for an EB-5 investment may be derived from many different sources. The funds may be income, a gift, a loan secured on assets owned by the investor, an inheritance, etc. However, whatever the source, it must be shown to be lawful and the onus is on the investor to prove on a preponderance of the evidence that the funds are lawful. Although USCIS may take into account different business practices abroad, proof will be required. In certain cases, alternative methods of proof may be available. You should discuss specific cases with an attorney experienced in EB-5 matters.

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