EB-5 Investor Visa: Documents Proving a Loan as the Lawful Source of the Investment Funds

To qualify for an EB-5 visa, the investor will need to show that the invested capital came from a lawful source. Funds obtained by a loan are acceptable so long as the loan is secured by the investor’s personal assets. To prove a loan as the lawful source of the investment funds, substantial supporting documents will need to be included with the EB-5 application submitted to the U.S. Citizenship and Immigration Service. The following documents, if available, should be included with the application to prove that a loan secured by the investor’s personal assets is the lawful source of the investment funds.

Income tax returns for the past five years. The investor should submit his or her individual tax returns for the past five years. In situations where a company pays taxes on behalf of the employee, records from the company showing that such filings or withholdings have been made should be included with the EB-5 application. An inability to provide tax returns may be offset by providing the other mentioned documents in this section. USCIS will look at the submitted documents as a whole when determining the lawful source of the investment capital.

Investor’s capital source statement. The investor should include a statement explaining that the investment capital came from a loan. The statement should describe the terms of the loan and must explain that the investor’s personal assets secure the loan.

Written loan agreement. The investor should submit the written loan agreement with the EB-5 application to demonstrate that the funds were derived from the proceeds of a loan. The terms of the loan should include the interest rate, a description of the investor’s personal assets securing the loan, and the repayment period which should generally be no longer than two years. As noted, the investment will not qualify under the EB-5 program unless the loan proceeds are secured by the investor’s personal assets. The assets used to secure the loan should be clearly identified.

Bank statements evidencing receipt of loan proceeds. The investor’s bank statements should be included with the EB-5 application to show that the investor received the loan proceeds.

If the lender is an individual, evidence establishing that the loaned funds came from a lawful source. When the lender is an individual, as opposed to a bank or lending institution, USCIS sometimes inquires into how the lender obtained the loan money from a lawful source. Although the investor will not need to trace the source of specific funds from the lender, the investor will need to provide at least some basic evidence that the lender has lawful income that could account for the accumulation of the loaned funds. Documents evidencing the lawfulness of the lender’s funds may include:

          1) Lender’s capital source statement. The investor should include a statement by the lender detailing how the lender accumulated the loaned funds.

          2) Income tax returns for the past five years. The lender’s individual income tax returns and, if applicable, business tax returns for the past five years. If the lender has not filed tax returns at any time during the previous five years, an explanation for the missing tax returns should be included with the EB-5 application.

          3) Other documents. Other documents demonstrating the lawfulness of the lender’s funds will depend on how the lender obtained the capital. The same documents used to prove the lawfulness of the investor’s source of funds may be used to prove the lawfulness of lender’s capital. For example, if the lender lawfully accumulated his or her salary over time, documents that help demonstrate this accumulation include an income certificate from the lender's employer, the lender's employment contract, and the lender's bank statements demonstrating salary payments accumulated over time. Please refer to the appropriate source of funds section of our website for a list of documents that may be used to prove the lawfulness of the lender’s capital.

If the loan is secured by real property, evidence regarding the real-property is needed. Where the loan is secured by real property, the investor should submit additional evidence regarding the real-property, including:

          1) Mortgage agreement. The investor should submit the written mortgage agreement to demonstrate that the investment funds came from a mortgage.

          2) Real-property ownership certificate. An ownership certificate should be submitted as evidence that the investor owns the real-property.

          3) Real-property purchasing invoice. A purchase invoice for the real-property should be included with the application to show that the investor owns the mortgaged property.

          4) Tax certificate. To further demonstrate ownership, the investor should submit a tax certificate demonstrating the payment of taxes on the real-property.

          5) Real-property appraisal report. The appraisal report of the real-property should be included to demonstrate the value of the property.

          6) Documents evidencing lawful source of funds used to purchase the property. The investor should submit documents proving that the mortgaged property was purchased with lawful capital. The documents demonstrating the lawfulness of funds used to purchase the property will depend on how the lender obtained the capital. Please refer to the appropriate source of funds section of our website for a list of documents that may be used to prove the lawfulness of the capital used to purchase the property.

Please note that these are general suggestions and by themselves do not guarantee approval of an EB-5 submission. At the Law Offices of Vaughan de Kirby, we can help you through the entire EB-5 process – and help you make the best decision for you and your family. Call us today to schedule a free meeting at 415-221-2345.

Vaughan de Kirby
California Immigration Attorney

EB-5 Regional Center Program Ends 12/08/17

Congress has extended the current Regional Center program to December 8th, 2017, at which time it will sunset unless extended. We anticipate future legislation that will call for an increased investment amount and more stringent requirements. For this reason, we recommend to our clients that they take action under the current law if at all possible.

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