Trends in Vietnamese Source of Funds -

Trends in Vietnamese Source of Funds

Kate Kalmykov

by Kate Kalmykov and Dillon Colucci

Navigating the EB-5 process for Vietnamese nationals presents unique difficulties. Certain domestic policies can cause headaches for potential EB-5 investors. Below is a discussion of some issues facing Vietnamese investors.

  1. Currency Restrictions Vietnamese currency laws generally restrict Vietnamese citizens’ ability to move currency abroad. This makes it nearly impossible for investors residing in Vietnam to transfer sufficient funds to make EB-5 investments on their own. Thus Vietnamese investors commonly will employ a third party money transfer agent. This third party money agent will receive the investor’s EB-5 investment in Vietnam and then transfer the amount of the EB-5 investment from an office of the third party money agent abroad into the selected EB-5 investment. Vietnamese investors employing this method should first check with their regional center or EB-5 investment bank. Some U.S. banks will not accept funds that do not come from an account of the investor.
  2. Tracing Funds Investors have the burden of tracing their investment funds through the third party money transfer agent used to facilitate their investments. Therefore, an investor must trace each movement of funds from the investor to the third party money transfer agent, each transfer by the third party money transfer agent, and the transfer from the third party money transfer agent to the new commercial enterprise. Failure to document any step along the way is a red flag that often leads to an RFE.
  3. Home Equity Loans Home equity loans are generally acceptable as a source of funds, providing an investor can evidence her ownership of the property used as collateral and proof that the investor can make payments on the loan from a lawful source. It is recommended to obtain a property appraisal in order to verify the veracity of the mortgage and loan documents. Additionally, many homes in Vietnam have undergone house numbering changes as a result of development. It is important to track any changes in house numbering in order to provide continuity between documents
  4. Tax Receipts USCIS often sends RFEs for lack of five years of tax receipts. In Vietnam, employers can directly deduct taxes for their employees and individuals can also make annual tax payments. Employment verification letters which attest to an employer paying taxes on behalf of an employee are helpful. Additionally, tax receipts are typically available when an individual has made tax payments.
  5. Funds held in gold Because of conditions within Vietnam, many individuals used Vietnamese Dong to purchase gold taels. The purchase of gold was done to protect against any drastic falls in the country’s currency. However, this poses problems for tracing. Oftentimes individuals have not retained receipts for their purchases of gold. If an investor lacks receipts for purchases of gold, it may be necessary to document the investor lawfully earned the funds to purchase the gold. Additionally, each step in the purchase of gold should be documented, such as the withdrawal of funds from bank accounts prior to purchase, safety deposit boxes opened to store gold, and documentation of the exchange from gold to paper currency.

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