I used to work for an investment banking and private equity industries in Eastern Europe and earned more than $1 million in annual bonuses and proceeds from sale of employee shares. The funds were paid by the Cyprus holding entities to a trust of which I am a beneficiary, and, therefore, were not taxable in my home country. Will these trust funds qualify for an EB-5 investment? If so, what will I need to include in terms of source of funds documentation?
It can qualify if you can show the lawful source of funds that were paid into the trust and that they were personal to you. If the funds were not subject to taxation and can be documented as such, then the trust funds may be able to be used.
If you are legally able to withdraw the funds from the trust and commit them to an investment in a new U.S. commercial enterprise, then yes. You must document how, when, and where you lawfully obtained this capital. Such documentation will depend upon the individual circumstances. In general, you must establish that it is more likely than not that the funds were lawfully obtained. It also helps if you can trace the funds from the origin to your personal ownership and control. All foreign language documents must be translated into English in their entirety and the translation must be certified by a person fluent in English and the foreign language.
If the money put in trust was legally obtained or earned, and the trust account is a legal and lawful account, you may be able to use those funds.
Here you parked previous income in a special trust. The funds flowing out of a trust can be considered lawful sources, if the origin of the trust can be traced. In other words, documenting how the seed money was earned in your previous employment and how the trust has managed the money over the years will be the keys. At a minimum, it seems your prior employer will need to verify your employment and accounting for the pay-outs, as well any income tax filed by either you or the trust.
Basically, personal investments into a fund are acceptable, and it is acceptable for the fund to loan the funds to an EB-5 job-creating entity, or for the fund to invest the funds into an EB-5 job-creating entity.
You will need to show the trust agreement showing you as the sole beneficiary, and at least a notarized letter from the trustee that this fund is yours to use without any restrictions. You will also need to show your employment records, such as contract and/or payroll statements to start.
There is no reason why you cannot use these funds. You will need to show how and when the trust was funded. If it was from your bonus, then you need to be able to verify the employment and show proof that it was a payment for your bonus.
That will work. I have done this before successfully. You will need the trust documentation that you are the beneficiary, as well as source of funds documentation on where the money came from that funded the trust.
For an EB-5 investment, if cash is not readily accessible, funds can come from a loan that is secured by your assets. For documentation, you should include all of the relevant documentation surrounding the loan, documentation regarding the valuation of the security, documents related to the money transfers, and the repayment schedule.
If you own the money, then you are allowed to use it. You will need to demonstrate that the money came from your annual bonuses and proceeds from the sale of employee shares.
