What documents are generally used to prove EB-5 source of funds?
Hello. My situation is that I currently have F1 visa and am studying at a university here in USA. I am seeking EB-5 through regional center projects. I do not have money myself and my parents are going to gift to me the whole amount. I am from China. But the question is I don''t know how they gonna prove lawful source of funds. My parents have a small factory and just doing a little business. Most of the money are saved from the profits of the business. They have stock as well, but the deposit money are coming from the business, too. Now I searched the internet and found out the beginning of 2006, one will need to file tax report in China. My parents and I are not aware of that. They have never filed those taxes. Does this mean my parents money could be unlawful for EB5? I also find somebody saying about get a loan from the property could be a source, too. My parents have some property that are bought over 10 years ago. Does it need to prove the money at the time they bought it? Because they are saying it was too long ago and may not be able to. I hope I''ve asked my question clearly enough. Thank you in advance for your help.
There are many different ways to prove the source of funds through documentation. Documents such as profits earned from business, sale of property, gifts, and bank statements will help prove the source of the funds were lawful. More information and further examination of your case is required.
Since your funds are coming from your parents, we will need to show that they have the net assets over $1 million to give you the gift of approximately $550,000 for usual Regional Center project investment. Based on your brief description, they will need to show corporate income tax returns that show the profits they have been making in their business, the stock certificates or brokerage account statements that show how much they have in stocks, other bank account statements to show balances/worth. Although you could get a current appraisal of the real estate they own to show the worth of the properties before obtaining the loan, you will still have to show that you have had some substantial income for the past 3+ years in order to be able to show in average what they have been making over their life time. Thus, my advice is to have them work with an accountant to file and pay back taxes for at least past 3 years if not more, as we will need them.
It is possible that your parents document a gift of funds to your personal account. It would be necessary for you to consult with an experienced immigration attorney to document your parents'' lawful source of funds from which the gift to you comes, either through accumulation of funds from business or from a loan transaction. Documents will depend on the specific facts of your case. Please do not hesitate to contact our office should you have further questions.
Yes, your EB-5 funds can be the money your parents borrowed from the bank using the real property as collateral. However, you need professional assistance when preparing those important documents.
Philip H Teplen
Your question as to lawful funds is not easily answered as everyone''s circumstances are different. Clearly, we need to fully explain and document your parent''s ownership of the business. We should discretely review the legal issues regarding the filing of late income taxes in China. Further, borrowing money against realty can also be structured. I suggest you call us to arrange a telephonic consultation.
Your question calls for the assistance of an experienced EB-5 Attorney.Your parents can gift the money to you. However you will have to prove you are a qualified investor who has a net worth of $1 million USD, while your parents have to prove and authenticate the legal source of the investment funds. There are many ways to show the lawful source of funds by either primary or secondary evidence.
As it relates to source of funds ("SOF"), CIS will be very strict. The first issue you have is that the money must be gifted to you into a personal account that you are the sole account holder on. Second, that money must come from your parents account (personal) not a company account. Third, the money your parents transfer must be legitimate. While CIS wants to see tax returns for the last five years, not having them or not declaring hundreds of thousands of dollars on the tax returns will not necessarily make it impossible. You will want your parents to show their personal tax returns and the company''s. If no tax return was filed for the company, I would ask an accountant to prepare income statements and balance sheets both for the company and your parents showing that clearly the company and consequently your parents have the funds. Fourth, you will need to include proof that your parents own the company and that the company declared a divided. That should be sufficient. If you decide that your parents will obtain a loan on property, they will have to show how they obtained the money lawfully to purchase the house and that they have the capacity to make the payments on the loan. Lastly, your parents should execute a gift affidavit confirming the gift to you and that all gift taxes if applicable, were paid. All the best.
Source of funds will be the most important part of your submittal. A gift from your parents is fine. You will need your bank statements and theirs to show the transfer. If the money came from their business earnings then you will need 10 years of tax returns for the business and for them personally. You may want to retain an accountant to map the source of funds if they are complicated as you indicate.
Working with a potential investor on the source of funds is a very important part of the work done by an immigration attorney. You should consult with an experienced EB-5 immigration attorney, such as myself, to determine whether or not your parents can prove their lawful source of funds from general wealth accumulation or from a real property loan. Each case is unique, so it makes sense for you to get specific legal advice from an expert before you and your parents decide that EB-5 is right for you.
There are several ways to document the source of funds. If your parents own the business, you can show the ownership documents for the business and the financial documents for the business. If they are borrowing from the business, the documents for that loan can be used. You can also hire a reputable accounting firm to prepare audited financial statements for your parents'' net worth documenting the source of funds. These are just some thoughts. If you wish to discuss the various ways to establish the source of funds you can schedule a consultation with a qualified attorney. If you wish to schedule a consultation with our office, please contact us. You do need a competent attorney to assist you with the EB-5 investment Green Card process due to the complexity involved.
Your problem is quite common among the Chinese investors. Many people from China do not have sufficient documentation. Luckily, there are always many ways to trace the source of funds, such as profit earned from business, sale of real property, gift from wealthy relatives etc. Due to our background, our firm is especially good at tracing the source of funds for Chinese investors. We understand the commercial practice in China and how people accumulate their wealth.
You will have to show a paper trail of where the money originated from so that the average person could review the documents and understand the source of the funds and any unclear transactions will have to be explained. Get with an Immigration Attorney and have him help you review the financial paper work to come up with a good strategy to prove the funds orginated from a legal source that will satisfy USCIS.
Proving the lawful source of investment funds can be done with many different types of documentation, including but not limited to tax returns, salary reports, or investment reports. Preparing the full investor package for an I-526 petition is best served with the guidance and representation of an experienced EB-5 attorney, like those at our law firm, who can review all possible sources of funds and the best information and documentation to use to authenticate them.
We have done an EB-5 for someone from China with your exact situation. He is a student in the USA and the entire money was gifted from his parents from China. We successfully completed the case for him. Please call us to discuss.