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EB-5 Article Source of Funds

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Common Reasons for I-526 Petition Denial:

Although the EB-5 Immigrant Investor Program boasts a high approval rate, approval is not guaranteed. Investors can improve their chances by meticulously preparing their I-526 petition.

Understanding the I-526 Petition;

The I-526 petition is the initial form filed by EB-5 applicants with U.S. Citizenship and Immigration Services (USCIS). It includes personal information about the investor and their family, along with documents like driver’s licenses and passports.

Additionally, the petition requires details about the investment project. If the project has already received exemplar status from a regional center, or was prepared and filed by a lawyer or expert on I-956F preparations, as is mostly the case,  investors can file their I-526E petitions ahead of I-956F (exemplar) approval

For projects in a Targeted Employment Area (TEA), the petition must include data justifying the TEA designation. Typically, the regional center provides these documents.

The most challenging part of the I-526 petition is documenting the source of funds. Investors must prove that their investment capital is lawfully obtained and committed to the project. This requirement varies widely based on the fund source and country of origin, making it a frequent cause for petition denial.

Complications in the Source-of-Funds Process;

While the source-of-funds requirement aims to ensure lawful capital is used to boost the U.S. economy, USCIS examines each case thoroughly. For example, if an investor uses property sale proceeds, they must prove the legality of the property’s purchase, the earnings used to buy it, and tax compliance. Using gifts or inheritance adds some complexity. For gifts, an agreement stating no repayment is necessary is required, along with proof that the donor obtained the funds lawfully. Inheritance cases require proof of rightful inheritance and lawful earnings by the deceased. Investors from countries with remittance limits, like Vietnam, China, India, and South Africa, must provide evidence of legally overcoming these restrictions.

Source Of Funds: requirements

EB-5 investors should first consult an experienced EB-5 immigration attorney, ideally one familiar with investors from their country. The attorney can guide them on the best sources for their investment capital. Investors may need to submit various documents, such as: Employment records, tax returns, gift contracts, Investment records, loan documents, property deeds, sale-of-asset records, bank statements, business accounting records.

USCIS may request documentation tracing funds from the source to the EB-5 project’s escrow account. For real estate sales, this could include:

  • A bank statement showing that the sale proceeds were deposited into the investor’s foreign bank account.
  • A bank statement showing that the sale proceeds were deposited into the NCE’s escrow account.
  • The real estate asset’s sale deed.
  • An appraisal evaluating the market value of the real estate asset.
  • The real estate asset’s purchase deed.
  • Evidence that the capital used to purchase the real estate asset was lawfully sourced.

A local tax or legal expert may need to attest to the unavailability of certain records. USCIS uses a “more likely than not” standard, so approval is possible even without all documentary evidence. Insufficient documentation might result in a Request for Evidence (RFE) rather than an outright denial. An RFE gives investors time to submit additional documentation. If this satisfies USCIS, the petition is likely to be approved. In urgent cases, such as when a child is nearing visa ineligibility, investors can submit partial documentation and prepare more thorough evidence before an RFE is issued.

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