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The EB-5 investment program is one of the most popular visa-by-investment programs in the world. It offers investors from any country the opportunity to relocate to the United States by making a qualifying investment in an EB-5 project.
However, to receive permanent resident status, investors must provide evidence and documentation proving compliance with EB-5 regulations. United States Citizenship and Immigration Services (USCIS), which regulates the program, has high evidentiary standards for EB-5 documentation. Investors must demonstrate that their investment meets the minimum investment threshold and that their capital was sourced legally. Furthermore, they must demonstrate that their investment generated 10 jobs for qualifying U.S. workers.
In 2021, the qualifying investment thresholds for an EB5 investment were reduced as a result of the overturn of the EB-5 Modernization Rule on June 22. Foreign nationals can now qualify by making an EB-5 investment of $500,000 in a targeted employment area (TEA) project or $1,000,000 in a project located outside a TEA.
Investors are permitted to use any source of funds for their EB-5 investment, including salaries, inheritances, gifts, sales of real estate, and loans. Having made the EB-5 investment, the investor must file a Form I-526. With this petition, the foreign national must include evidence to demonstrate that their investment fulfills USCIS criteria for the EB-5 investment program.
The process of documenting the legal source of funds is one of the most challenging and time-consuming steps in the EB-5 investment process. The documentation required depends on the source of funds used in each case. In this article, we outline how to prove the legal status of loaned capital, which is a common source of funding for EB-5 investments.
Evidence of the Loan and Lender
Investors who source their EB-5 investment capital from a loan must provide a capital source statement. As part of the supporting evidence in Form I-526, foreign nationals should also include all paperwork related to the loan and the lender.
This evidence must include the loan contract, an explanation of how interest will be calculated, and when the loan must be repaid. The investor should also include bank statements that show the loaned funds being received into the investor’s account.
If the loan was received from an individual, and not from a bank or other institution, the investor would also need to submit evidence related to the lender and where the loaned funds came from originally. This will involve a capital source statement from the lender, with supporting documentation such as real estate contracts and employment records.
Providing Information on the Personal Assets
Investors are advised to use loans secured with personal assets. The personal assets used as security on the loan must be shown in the loan contract. Moreover, investors must provide documentation proving that the assets were obtained lawfully.
If the loan is secured against property, for example, the investor must demonstrate that they own the real estate in question. If the property was bought using funds from the investor’s salary, they would need to provide their employment records.
Filing Form I-526 can be complicated. Foreign nationals are strongly advised to consult with experienced EB-5 immigration attorneys who are familiar with USCIS regulations. Approval of the I-526 petition grants an investor and their family conditional permanent resident status in the United States, allowing them to relocate and begin enjoying the benefits of a U.S. green card.
