I am a U.S. citizen and live here now. I would like to gift some money to my nephew for his EB-5 petition. Since he lives in India, he could not open his own account in the U.S. I have to transfer the funds from the U.S. to my nephew’s account in India. Would USCIS raise questions about the source of funds in such an arrangement, considering it is originally from the U.S.?
A gift from U.S. source funds is fine. You will need to have a properly executed gift declaration and have records evidencing the funds being gifted are from lawful source of funds, such as your earnings, sale of assets, inheritance, etc. Funds must be traced from your account to your nephew's personal account.
It is not advisable to transfer the funds from the U.S. to India. It will simply create unnecessary complications. Also, since this is a gift, draft all necessary donor-donee documentation in the U.S. and arrange to transfer the gift to your nephew donee in the U,S. If the investment is through a regional center, consider transferring the money to the regional center. With regards to the question of source of funds, the main issue that needs to be addressed in the EB-5 petition is whether the source of an investment fund is legal. A money gift from a donor like yourself is considered legal. Furthermore, it is expected that you should be able to document how you, the donor, obtained the money you are giving away.
Paper trail will need to be clear, including where your funds were earned and a clear gift and not a loan to your nephew unless secured by his personal assets.
The source of funds for an EB-5 investment can be from a U.S. source.
No issues with the source of funds being from the U.S. You should have a gift instrument as evidence of the gift from you to your nephew. You will need to provide financial documents to show lawful source of your funds.
One may gift funds to one's nephew in order for him to make a qualified EB-5 investment for the purposes of filing an EB-5 investor petition on Form I-526. If the nephew is unable to open an account in the U.S., the funds could be transferred to the nephew's account in India. In any event, you would have to show a lawful source of funds that are being gifted to the nephew, whether the funds originated in the U.S. or otherwise.
Based only on what you are asking here, probably not, as long as we can provide documents to prove the source of your funds and to track the transfer. I would want to look into the specifics more carefully, of course.
This arrangement is perfectly fine. You can use funds generated within U.S. Also, as per the Indian FEMA regulations, an Indian resident is required to receive funds in India or, if received abroad, remit funds back to India to use them even if it means later the funds have to be remitted back to U.S. to make an investment. The investment needs to be structured properly not only with respect to U.S. laws but also per Indian laws.
Ideally, you'd find a way to open an account for him here in the U.S. to avoid transferring to India. Perhaps your attorney can assist you. Either way, you will have to source the funds you are gifting him and keep detailed records of the path of funds.
I would not send the funds to him in India! Is he is investing in a regional center, you might be able to send the funds directly to the center. You should provide a gift letter to your nephew so he can show the immigration service it was a gift from his uncle. If he is investing in a non-regional center private investment, you can just transfer the funds directly to them. If you send the money to India, it may be hard for him to send the funds back to the USA due to India's money transfer restrictions.
There is no restriction as to who can gift funds. The gift has to make sense, though. An uncle gifting to a nephew certainly makes sense! Be prepared to show the source of funds, however, as the burden to show the source of funds will shift from your nephew to you in this case. The gifted funds do not have to leave U.S. shores. Many banks are opening accounts to foreign citizens nowadays as long as the foreign citizen provides appropriate documentation which could include passport, driver's license, foreign home address, proof of address in the form of current utility bill (gas, electric, telephone, cable, etc.), telephone number and name and address of an employer, if any. You could simply fund this account with the required investment amount and other fees such as administrative fees. Once you pick a project, these funds could then be wired from your nephew's account in the U.S. to the escrow account of the project sponsor.
The fact that your funds were earned in the U.S. is not a problem. Your nephew's investment immigration attorney will work with you to identify the evidence necessary for the source of your nephew's investment capital. Do not wire the funds to India. You will be signing an affidavit of gift that will be provided to you by your nephew's investment immigration attorney.
As long as you can prove where you personally earned your lawful funds from, it should be OK.
Gift letter attesting that the funds are given to the nephew along with the wire to the regional center escrow account specifically noting in the wire itself that the wire in for the benefit of your nephew's name.
There is no issue with using funds earned in the U.S. Typically, the funds do not need to be transferred directly from the investor. If the regional center's escrow agreement allows for third-party transferors, you could transfer the funds directly from your U.S. account to escrow.
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