EB-5 source of funds: trace every dollar back to its origin

For the EB-5, USCIS checks not only whether you have enough money, but where it came from and the path it took. Document that cleanly and you remove one of the most common weak points in the process.

The EB-5 involves serious money: at least $800,000 in a targeted employment area, otherwise $1,050,000. Exactly how much, and what counts as capital, is covered in our article on the EB-5 investment amount. This page is about the second question USCIS asks every investor, and the one where many files lose time: where does the money come from, and how did it get to where it is working now?

US immigration attorneys call this the source of funds and the path of funds. You have to document both, with no gaps and in English.

1What USCIS wants to know about your money for the EB-5

On this point the law is unusually clear. An investor must show that the capital for the minimum investment and any money used to pay administrative costs and fees connected with the investment come from a lawful source and were obtained through lawful means. That is set out in INA 203(b)(5)(L), added by the EB-5 Reform and Integrity Act of 2022 and applicable to petitions filed on or after May 14, 2022.

On top of that comes the basic rule in the definition of capital: assets acquired, directly or indirectly, by unlawful means are not capital. This explicitly includes cash from loans secured by such assets. So if you take out a loan against a house that was not itself lawfully acquired, you have only moved the problem.

The standard of proof is the preponderance of the evidence. You don't have to remove every doubt, but your account has to be more likely true than not. That sounds generous. In practice it means every claim needs a document, and every document has to connect to the next step.

The review happens twice. First with your petition: Form I-526E for investments through a Regional Center, or I-526 for a direct investment. The difference is explained in Regional Center or direct investment. Later, when you apply to remove the conditions, USCIS looks at the capital again and checks that it stayed invested.

2The documents the law requires

INA 203(b)(5)(L)(ii) lists what a petition must include, as applicable. The list is short, its impact is long:

• Business and tax records: registration records of foreign companies, corporate tax returns and personal tax returns of any kind filed with any tax authority inside or outside the US in the past seven years, and any other evidence of a source of capital or fees.
• Judgments and proceedings: certified copies of any judgments for money owed by you, and records of all pending governmental civil, criminal and administrative proceedings, as well as private civil actions that could lead to a monetary obligation, before any court in the world.
• People sending funds: the identity of every person who transfers money into the US on your behalf that is used for the minimum investment.

For most European investors, seven years of tax returns are rarely a problem, because the documents exist. They are just scattered: with your accountant, in the tax authority's online portal, in the files of a former company. If you lived in more than one country, say a few years in Switzerland and before that somewhere else in Europe, you need both sets. Petitions filed before May 14, 2022 required five years of tax returns; the seven years apply to everything filed after that.

As for judgments: even an old dispute with a supplier counts if it led, or could lead, to a payment obligation. If there is nothing, say so explicitly. A missing sentence in a file looks like a missing page.

3Source of funds and path of funds

The source is how you earned the money. The path is how it got from there to the US company. USCIS requires both: according to the Policy Manual, you must document the path of the funds to show that the investment was, or will be, made with your own money.

An example: six years ago you sold shares in your company, put the proceeds in a savings account, later moved them into a brokerage account and liquidated it three months ago. The source is proven by the share purchase agreement together with your tax assessment. The path is proven by the statements at every step: receipt of the sale price, transfer to the brokerage account, sale, wire transfer. If one step is missing, you have a gap, and from the agency's point of view that gap could hold any other money.

3.1Cash, commingled accounts, detours

What weakens the chain is almost always the same: cash deposits, an account where many sources flow together, and transfers through third parties. A commingled account isn't forbidden, but you then have to show that it held enough clean money when the transfer went out. The simplest approach is a dedicated account that receives only the documented funds and from which you invest.

3.2Who sends the money

If the transfer comes not from you but from your company, your spouse or a parent, the petition must name that person. So plan early which account the money will leave from. The law also requires USCIS, before approval, to check whether you or an employer associated with you appears on the US Treasury's sanctions list (OFAC).

3.3Count in dollars, not euros

Capital is valued at its fair market value in US dollars at the time of investment. If your savings are in euros, kroner or francs, build in a buffer for the exchange rate. The Policy Manual expressly mentions that funds can be held in an escrow account in the US to avoid questions about significant currency fluctuations. How such an escrow may be released is covered in our article on the investment amount.

4Typical sources and how to prove them

For most European investors, the money comes from a handful of pots: a long career, their own business, real estate or an inheritance. The table below shows which documents support the source and which support the path. It is not an official agency list, but a translation of the legal requirements into the paperwork that actually exists in European countries.

Three tips from working on files like these:

• Old money needs a starting point. If you have been saving for 20 years, you can't produce every payslip. Instead, tax assessments over the years show that income and wealth add up, and bank statements show how it built up.
• A business sale is a chain, not a single document. The purchase agreement shows the price, but only the incorporation, the capital contributions and the annual accounts show that the business itself was built lawfully.
• With an inheritance, the deceased counts too. USCIS wants to see that the estate was lawfully acquired by the person who died. A certificate of inheritance proves who inherits, not where the wealth came from.

5Gifts and loans: allowed, but with a second file

Since May 14, 2022, the law expressly allows gifted or borrowed money to count toward the minimum investment. Two conditions apply: the money was gifted or lent in good faith, and it was not gifted or lent to get around the rules on lawful sources, for example to launder money from illegal business.

The price is a second file. With a gift, the donor must provide the tax, business and legal proceedings records you would otherwise provide yourself. With a loan, the same applies to the lender, unless the lender is a bank. So if your parents give you 300,000 euros, you also need their tax records and their statement on judgments and proceedings.

5.1Loans secured by your own assets

A bank loan secured by your own assets can count as capital. The Policy Manual sets three conditions: you are personally and primarily liable for the loan, the collateral belongs to you, and no assets of the US company you invest in serve as collateral. The loan counts only up to the market value of the pledged collateral. A mortgage on your home can therefore be part of the solution, as long as the home was acquired cleanly.

6The fees need a clean source too

Here's a point many people miss: the lawful source requirement applies not only to the minimum investment but also to the money you use to pay the Regional Center's administrative fees, attorney fees and other costs of the investment. At the same time, these fees must not be taken out of the capital. According to the Policy Manual, administrative, management, attorney, finder's and syndication fees that reduce the capital available to the project do not count toward the minimum investment; they must be paid on top.

For your file, that means: plan the source for the investment and the fees together. If you document the investment from a business sale and pay the fees from another account, you are documenting two sources. The article on EB-5 total costs shows which fees to expect.

7Translations and gaps that cost time

Under 8 CFR 103.2(b)(3), every document in a foreign language needs a full English translation, which the translator certifies as complete and accurate, along with a certification that they are competent in the language. With tax assessments, contracts and land registry extracts from your home country, that quickly adds up to hundreds of pages. Start translating only after you've chosen a project and you lose weeks.

Gaps that typically hold up a file:

• an account missing statements for a year or two because the bank no longer keeps them online;
• a cash deposit with no proof of where it came from;
• a company whose early annual accounts can no longer be found;
• a gift with no written agreement and no records from the donor;
• a loan secured by the US company itself.

Every one of these gaps can be closed if you find it early. Banks issue old statements on request, accountants keep archives, and for a gift you can put a dated, signed agreement in place afterwards that describes what actually happened. What you cannot fix afterwards is a false statement: USCIS denies or revokes a petition based on willful misrepresentation.

8The right order: documents first, then the project

A typical EB-5 mistake is getting the order wrong. Someone picks a project, signs, wires the money and only then starts looking for documents. The reverse works better:

1. Define your sources. Which pot does the capital come from, and which the fees? One source is easier to document than five.
2. Gather the documents. Seven years of tax records, the evidence for each source, bank statements for the whole chain, and the records of any donors or private lenders.
3. Get translations done. Everything not in English, with the translator's certification.
4. Plan the route. From which account, in which currency, through which stops?
5. Then the project. How to vet a project is covered in the article on project due diligence.

If you already hold an E-2, you know the question from the consulate, though with a different standard there: how source of funds is reviewed for the E-2 is explained in our article on E-2 source of funds. For the EB-5, the requirements are spelled out in the statute and go further. Both routes are compared in the article E-2 visa or EB-5 green card, and if you want to move from the E-2 to the EB-5, you'll find the process under Concurrent Filing.

What ends up in the file is a story someone else can check line by line: here you earned, here you saved, here you sold, here the money arrived. The fewer stops it has, the faster it reads.

In short

• For the EB-5, you must show that your capital and the money for all fees come from a lawful source and reached the USA by lawful means.
• Among other things, the law requires your tax returns for the last seven years, records of judgments and proceedings, and the names of everyone who transfers money to the USA on your behalf.
• Gifts and loans are allowed if given in good faith; the donor or any private lender must then provide their records too.
• Every foreign-language document needs a full, certified English translation.

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