Who must prove the source of funds for an EB-5 investment? - EB5Investors.com

Who must prove the source of funds for an EB-5 investment?

I can prove the legal source of my $500,000 EB-5 investment, but I live in a country where transferring USD outside of the country is not legal. I have relatives living in the United States who are willing to loan me the money. So, multiple people will transfer money to the escrow account with reference to my investment. I will show the government how I acquired the $500,000. Is this a legal way to make an EB-5 investment? Will my relatives need to show how they made the money that they lend me?

Answers

Xiaosheng Huang

Xiaosheng Huang

Immigration Attorneys
Answered on

Definitely, you need to show the source of your money and your relatives may need to show how they made the money that they lend to you.

Barbara Suri

Barbara Suri

Immigration Attorneys
Answered on

Yes, your relatives must also show how they acquired the funds they are giving you to make the investment.

A Olusanjo Omoniyi

A Olusanjo Omoniyi

Immigration Attorneys
Answered on

The investor is the one who has to prove that its investment fund is from a legal source. In cases where the remittance of a huge amount of money to the United States is illegal, a violation of that country's banking law may trigger a rejection by USCIS. A loan is acceptable, but the borrower must prove that the money was earned from legal source(s). Advisably, discuss all these issues with an EB-5 attorney before proceeding.

Fredrick W Voigtmann

Fredrick W Voigtmann

Immigration Attorneys
Answered on

It would be better if your relatives had a bank account in your home country; that way you could transfer the money to them in your country and then they can facilitate by transferring the same amount to you outside of your country for you to invest in the U.S. EB-5 project. If you do it that way, you do not need a loan; you just have to prove how you lawfully obtained the money you transferred to them in your country. If you do need the loan, then the lender (unless it is a bank) will need to prove how they lawfully earned the money (and how they transferred it to you). You also will need to have a legally enforceable loan agreement with collateral that can be secured and foreclosed in the event you default on the loan. Then you need to prove to USCIS how you lawfully obtained the collateral to secure the loan.

Salvatore Picataggio

Salvatore Picataggio

Immigration Attorneys
Answered on

Each investor's source and transfer of funds is different, but the lawful source and transfer is the basic requirement. Loans and gifts can be lawful sources, and the use of several intermediaries can be lawful as well, but your specific case would need to be reviewed to make a proper determination.

BoBi Ahn

BoBi Ahn

Immigration Attorneys
Answered on

You can obtain your funding via a gift or loan, but that must also be traceable to a legitimate source. If the funds are obtained from a third party, proof of funds from that third party must also be obtained (i.e., the lawful source of funds of the person making the gift have to be documented).

Ian E Scott

Ian E Scott

Immigration Attorneys
Answered on

Yes. They will all have to show where they got the money and the loans must be secured with your personal property that has a value higher than the loan.

Raymond Lahoud

Raymond Lahoud

Immigration Attorneys
Answered on

When dealing with loans, you must still meet the EB-5 source of funds requirement. An investor must satisfy the government that the money comes from a "legitimate source" and that the money was "obtained through lawful means." Documentation is crucial. Dollar for dollar accounting is not required, but in order to fulfill this requirement you must often provide: made income to support your investment amount business property (home, stock, etc.) you would have to provide all of the relevant details related to the sale, actions against you from any court. If the amount came from the sale of a home or personal property, the documents and money transfers related to the sale should be provided. The source of funds requirements for EB-5 are extensive and often go far beyond what you will see in the regulations. If the funds come from a loan, these exact same requirements are applied to the person who gave the funds, as a loan or as a gift. So, if you borrowed it all from different friends, they would have to lawfully source the funds.

John J Downey

John J Downey

Immigration Attorneys
Answered on

In a word, yes. China has a rule that no one person can transfer more than $50,000 USD equivalent in one year. They need to have 10 relatives to each put up $50,000 to reach the $500,000 level. Each must show the sources of funds.

Bernard P Wolfsdorf

Bernard P Wolfsdorf

Immigration Attorneys
Answered on

No one can advise you on how to transfer funds in violation of foreign laws. However, you will have to show the path of funds; if your relatives are loaning you money, you have to show where they earned their money. It seems here this is actually your money they are investing, so it maybe needs to be aggregated.

Ally Bolour

Ally Bolour

Immigration Attorneys
Answered on

No. Source of funds need to be very clear. Relative letters will not do.

Lynne Feldman

Lynne Feldman

Immigration Attorneys
Answered on

This will be challenging. The investor is responsible for showing the legal source of funds.

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