Caught in the complexities of putting together proof of your financials for the EB-5 visa? Seeking to secure your future with a Green Card? Let’s dive into the process of the preparing financial documentation for the EB-5 visa
Questions:
My business is over ten years old so how do I document the Source of Funds utilized to start my business? I have declared income on my tax return to substantiate savings of $900,000. Won’t my tax returns be enough to document my Source of Funds?
• In short, tax returns alone are not sufficient. If this business is being used for the EB-5 process, you will need to document the SoF used when opening the company. This can include and is not limited to, tax returns, bank statements, loan agreements, gifts, and more. Generally speaking, transactions within 5 years require direct documentary evidencesuch as tax returns, service contracts, bank statements, etc. While transactions beyond 5 years are more likely to be able to rely on indirect evidence such as affidavits. But with that being said, I highly recommend having as much direct evidence as possible even after the most recent 5 years if you can obtain it because USCIS is known for going back 10, 20, and even 30 years, often times when there are gaps or inconsistencies.
How and when did you earn this money? What services were you paid to perform?
What taxes did you pay? Where have the after-tax funds been since you earned them
until today?
• USCIS will want to know exactly where the funds were earned, including on whether taxes were paid on the funds earned. This includes taxes required to be paid in the U.S. and/or globally.
Do I need to provide source of funds of the very first real estate purchased or company opened? How do I provide documents required to prove source that are outside of document retention period? What if sale/purchase transactions were made with cash?
• If you are using money from the first real estate or company opened for the EB-5 investment, you will need to show evidence that the funds were lawfully obtained.
• Generally speaking, transactions within 5 years require direct documentary evidence such as tax returns, service contracts, bank statements, etc. While transactions beyond 5 years are more likely to be able to rely on indirect evidence such as affidavits. But with that being said, I highly recommend having as much direct evidence as possible even after the most recent 5 years if you can obtain it because USCIS is known for going back 10, 20, and even 30 years, often times when there are gaps or inconsistencies.
• If a sale/purchase was made in cash, USCIS will want to know who the cash was from and where the cash came from. This can include the ID of the person who paid in cash as well as how they earned the cash.
How and when did buy this asset? Where did you get the money to purchase it? When and to whom did you sell it? What was your gain? What taxes were paid? Where have the after-tax funds been since the capital event until today?
• USCIS will want to know exactly where the funds were earned, including on whether taxes were paid on the funds earned. This includes taxes required to be paid in the U.S. and/or globally.
Do I need to document the source of funds utilized by my donor for the purchase of assets? My relative died intestate so how do I provide evidence of inheritance? Can I borrow utilizing my inheritance as collateral?
• Yes, you will. Examples of acceptable evidence include Wills, court documentation, attorney affidavits, death certificates, bank records, employment verification letters, etc.
• Yes, inherited property can be used as collateral for an EB-5 investment, but the applicant must provide legal proof of the inheritance, such as a will or trust. The applicant must also show that they lawfully obtained the share of the property. For example, if the applicant inherited a share of a resort from their parent, who was the original owner, the application must include the father’s will and death certificate.
How and when did you obtain these funds? Who gave them to you? What was your relationship to the person who gave them to you? Was the gift or inheritance properly reported? What transfer taxes were paid, if applicable?
• USCIS will want to know exactly where the funds were earned, including on whether taxes were paid on the funds earned. This includes taxes required to be paid in the U.S. and/or globally.
Is a bank loan without collateral the easiest option? How feasible is it? Be prepared to document the source of funds surrounding re-payment of the loan. Can I simply state that
the funds are gift from friends/family?
• As of a somewhat recent decision in 2020, unsecured loans can be used for EB-5 investments, but realistically, they might be hard to find. Additionally, being able to show source of funds to pay back the loan are required.
• Simply stating that funds are a gift from family/friends is not sufficient. Pieces of evidence that you should show will include their ID, a statement surrounding the gift, and the how that individual lawfully obtained the funds that they are gifting to you.
How and when did you buy this asset? Where did you get the money to purchase it?
Who is the lender? What are the terms of the loan? Has the loan been property secured?
Is the collateral sufficient?
• USCIS will want to know exactly where the funds were earned, including on whether taxes were paid on the funds earned. This includes taxes required to be paid in the U.S. and/or globally.
Thanks for tuning in today. Be sure to check the caption below this video. We’ve got questionnaires for different types of visas so that we can help you determine which visa is most appropriate for you. And if you’re traveling soon, we also have a list of some of my travel favorites.