EB-5 IMMIGRANT INVESTITOR PROGRAM
A Path To US Citizenship
EB-5 Immigrant Investor Program
Andrew P. Johnson has been processing EB-5 permanent residency applications for the last 17 years. The Law Offices of Andrew P. Johnson, PC has represented applicants applying for the EB-5 visa from numerous countries around the world. The primary issue with EB-5 applicants is proving the legal origin of funds for the EB-5 investment. Andrew P. Johnson is a requested speaker regarding EB-5 origin of funds. He has spoken to EB-5 investors groups in numerous countries abroad such as Istanbul, Turkey; Moscow, Russia; Dhaka, Bangladesh; and Tbilisi, Georgia. In 2014, Mr. Johnson was invited to speak to you United Nations Ambassadors in New York and later that year was invited to Washington DC to speak to over 40 United States Ambassadors about the EB-5 investment program.
Based on Andrew P Johnson’s experience regarding EB- 5 origin of funds, he has been invited to speak on Podcasts that go into intricate detail regarding the numerous ways in which EB-5 investors can prove their origin of funds. In addition, Mr. Johnson was invited to participate in a discussion of how to overcome the difficulty of transferring EB-5 investment funds out of a country that restricts individuals from moving personal funds abroad. Andrew P. Johnson offers free consultation regarding the EB-5 green card program and he will review an applicant’s origin of funds, and if there are complications, Mr. Johnson will suggest legal routes and provide examples of legal ways in which to prove origin of funds to USCIS.
Finally, many EB-5 applicants primary question is: “Which regional center should I choose for my EB-5 investment?” Mr. Johnson was interviewed on a podcast in which he explains the safety mechanisms EB-5 applicants should look for when they choose a regional center project. Most applicants want protection clauses within the private placement memorandum and completion guarantees by the developer and other safety measures which reduce the risk of having the EB-5 green card application denied. In the podcast, Andrew P. Johnson delves into intricate detail of what specific contractual clauses an EB-5 applicant should look for in a regional center project. New York Times article July 11, 2011 - Immigration Lawyer Andrew P. Johnson
How to Prove EB-5 Source of Funds?
The EB-5 Program is a visa program that affords foreign national entrepreneurs, their spouses, and their unmarried children under the age of 21 with an opportunity to obtain permanent residency in the United States while simultaneously stimulating the U.S. economy. The program is administered by U.S. Citizenship and Immigration Services (USCIS) and requires applicants to invest $800,000 in a Targeted Employment Area. A key aspect of the EB-5 application process is the applicant’s ability to establish that the investment funds have no ties to criminal activity. As a result, the EB-5 regulations require the applicant to prove both a “lawful source” of the funds and lawful “path” of the funds, meaning the funds were transferred to the Regional Center by lawful means.
Documents Are Needed to Prove EB-5 Source of Funds?
To prove that the investment capital came from a lawful source, the EB-5 regulations require the applicant to submit:
• Foreign business records;
• Corporate, partnership, and personal tax returns or similar documents that were filed in the preceding 5 years;
• Evidence identifying other sources of capital; or
• Certified copies of court judgments, pending court cases, and administrative proceedings within the past 15 years.
How to Trace EB-5 Funds to their Original Source?
It is important for the applicant to understand that the investment funds must be traced back to their original source. For example, if the funds to be used for the EB-5 investment are in a bank account the applicant will need to submit bank statements showing that the funds are in the account but must also document where the funds were before they were deposited into the bank account. The same rules apply if the EB-5 funds are tied up in real estate investments, stocks, or business accounts.
All investment funds, even if they come from multiple sources, must be traced back in an unbroken chain to the original source. If the original source is a third party such as a bank loan, gift from a friend or relative, or inheritance, the funds need to be connected back to the third party and there must be proof that they were lawfully obtained by the third party.
Proving the original source of the funds often requires the applicant to submit a considerable amount of documentation. This could include such things as bank, retirement, and stock account statements; documents memorializing real estate transactions and property taxes; loan documents showing that the applicant’s loans came from a lawful source; income tax statements; employment contracts and financial statements reflecting salary, earnings, and bonuses; and any documents that establish any type of business income. This list is not exhaustive and the applicant could be required to trace a single set of funds through multiple layers of investment.
For example, suppose the applicant is investing $800,000 to a for Regional Center Project and $400,000 of those funds are in a bank account. Additionally, suppose the $400,000 in the bank account originated as a $200,000 gift from parent and grew over time to $400,000 as the result of several business and stock investments. The applicant must document these funds through each transactional layer beginning with proof that the $200,000 was a lawfully obtained by the parent gifting the funds. Next, the applicant needs to showing how the monies lawfully grew to $400,000 through stock and business investments. Also, keep in mind that this only reflects half of the $800,000 investment. The applicant will also be required to trace the other $400,000 back to its original source.
How to Prove the Legal Path of EB-5 Funds?
As far as proving the path of the funds, all of the same rules and requirements outlined above apply. The key is that there must be proof that the funds are being lawfully transferred from the EB-5 applicant to the Regional Center.
How to Prove EB-5 Origin of Funds for a Real Estate Transaction?
Finally, there could be situations in which the applicant is unable to provide some of the necessary documentation. Each source of funds will have a separate list of required documents to prove a legal route for USCIS purposes. If an applicant was trying to prove their source of funds through a real estate transaction that was paid initially paid through the investor’s income, they would need to provide bank statements reflecting the deposits of their salary. The secondary evidence may be tax payments or an employment contract. These documents would prove that the funds were legally earned prior to the purchase of the real estate. For a Real Estate purchase, documents needed would include a purchase agreement, property ownership certificate or deed, and thank statements showing payment for that property. Please note, in some countries this is not possible and declarations would need to be prepared by their EB-5 immigration lawyer in order to supplement the lack of evidence. For example, the Russian banking system in the 1990s usually does not provide a clear path of funds as banks did not keep proper records and numerous banks opened and closed during that time leaving little or no records for the applicant to retrieve. Also, Vietnamese banks in the 1980s and 1990s were almost nonexistent Or not trusted to maintain proper record which add to the complexity to prove origin of funds. In these circumstances, declarations would substitute bank records. If documentation is unable to be obtained, USCIS will, at times, accept secondary evidence such as declarations from the investor or someone who could attest to specific information regarding the origin of funds.