The First Evidentiary Standard: Proof of Lawful Source of Funds

The pivotal aspect of the EB5 application process is for the investor to demonstrate the lawful source of funds.  The EB5 program requires the investor to prove that the funds invested in the project have been earned lawfully. This requirement is satisfied when sufficiently detailed documents are provided. 

The evidence must clearly and credibly show how the invested funds were earned and demonstrate the funds chain of title. There are no general rules or guidelines that apply. There are many ways to demonstrate compliance with the source of funds.   Each country has different customs regarding evidence of transactions. Therefore, it is a complex task to find the most appropriate evidence, particularly when the investor’s funds were acquired in multiple countries. Official authorities and financial institution documents have more probative value then self-made documents.

Thus, documents collected should originate from banks, financial audit institutions, or governmental official certificates (like deeds or property registration records). Documents made by the investor himself or by the investor friends or relatives can be helpful when there is no alternative. However, those documents are recommended to corroborate official evidence, justify unavailable evidence, or explain contradictory components. If funds are transferred through multiple intermediaries, each step to trace the funds must be proved by relevant evidence. Also, the investor must make sure to send to USCIS certified translations of all the foreign documents. Partial translations are often subject to request for additional evidence from USCIS. Funds can arise from different schemes. The following is a list of the most common source of funds and how to submit the EB5 evidence:   

  1. Inheritance and gifts: The investor should provide evidence on how the donee or testator earned the funds. The submission of documents that establish the payment of taxes is recommended. 
  2. Corporate shares: Establish the source and origin of the fund used to acquire the shares or stocks used for the investment. 
  3. Incomes: USCIS requires incomes to be evidenced by as much documentation as possible. Issues can arise if the investor changed employers multiple times prior to the investment. Thus, apart from bank records, personal tax return (from the last five years) and official employment statements can be helpful to establish the source of funds. 
  4. Loans: It is required for the investors to be personally liable to the loan contracted to finance the investments. Evidence should be established with mortgage documents, lien documents, loan contract, and bank records. The necessary information about the repayment, the duration, and the collateral involved must be clearly identifiable. If the loans are contracted by means of a corporation, corporate internal documentation, like the approval of the loan by the shareholder or board of directors and the financial reports, must be provided. 
  5. Real estate sales: USCIS requires all the documents that establish the legitimate source of the funds arising from the grant of a property. The investor must collect documents including purchase contract for the property, deeds, property taxes paid, and mortgages attached.