I live in South Africa where financial spreadbetting is legal and I recently used spreadbetting to generate £25 million ($40 million). Will I be eligible to apply for an EB-5 visa using these funds? Since these funds are legally tax free and I have never filed taxes or been required to, what documents can I submit instead of tax statements?
Since spreadbetting is legal in South Africa, use the documents you receive in the course of your investment in order to document your gains and losses. Also, use your bank records to evidence the deposit of funds received from spreadbetting.
As long as the legality of the financial spread betting activities, including the original investment may be documented, the funds may be used for EB-5 purposes. If the award is a nontaxable event in South Africa, an accountant or tax attorney should be able to document the fact supported by applicable law. Please contact an experienced EB-5 attorney to discuss the details of your case with you.
I would find an international accounting firm such as PKF and seek their advice. Their offices in China have handled many EB-5 sources of funds.
You need to be able to show that the funds are from a legal source, so if you are not required to file taxes, you should be able to show documentation on how you generated the funds, including the source of funds that were used to initiate the spreadbetting.
We will need written information documenting the legal reasons why you were not required to pay taxes. Letters from legal counsel in South Africa and possibly government officials would be useful. Citing to the statutory laws will also be needed.
You can include the award letter, copy of the check and deposit, and education documents on the legality of the source of funds in your country.
Yes, financial spreadbetting should be an acceptable source of funds for EB-5. Even though it may not be a taxable event in South Africa, you will need to show the underlying contracts with all parties and terms of the transaction (underlying security, market maker, bookmaker, client, bettor, collateral, punter, etc). You will probably need a clearance from the South African tax authorities or a letter from a South African chartered accountant saying the event was untaxable. Happy Betting!
To use the money from the spreadbetting, you will also need to prove the legal source of the funds that you used in the spreadbetting. For example, if you used $ 1,000 in your original bet and get $ 10,000 in return, you need also to explain the source of $ 1,000. That $ 1,000 might come from different sources. The document checklist will vary due to the different sources. Please consult an experienced EB-5 attorney for document preparation.
If it was legal to bet there, then winnings should be OK. You will need proof of the winnings, since they will not show up on your tax documents.
If you are not required to pay taxes in your home country, we would request a letter/affidavit from the proper government/state agency attesting to this.
It may be better to show the funds used for the actual investment were obtained by other means, but showing your net worth (required by some regional centers to show accredited investor status) would probably be OK with the betting earnings. Either way, proof of funds can be shown with bank statements or summaries if tax returns are not available.
