Each EB-5 application goes through comprehensive screening by the US government. There are two fundamental pillars of evaluation:
- A background verification process that is similar to the KYC process followed by any reputable bank. The background evaluation conducted by USCIS on the investor and his or her family include cross-checks with international law enforcement agencies for any red flags across global databases (eg. OFAC, no-fly lists, etc), pending litigations, or political exposure;
- Analysis of source of funds, which is an in-depth review of an investor’s financial circumstances to ensure compliance with anti money laundering practices. This thorough examination is one of the most critical requirements for any EB-5 applicant.
These two evaluation processes are the backbone of EB-5 review and processing. While US Immigration Attorneys and EB-5 fund managers help guide investors on these processes prior to submitting any EB-5 application, the onus of providing transparent source of funds documentation for USCIS assessment lies with the investor.
As part of USCIS’s review of any investor, a substantial amount of documentation related to the investor’s overall wealth in their home country will be required. In particular, the review of source and path of funds is particularly thorough. It is therefore critical that an investor clearly documents the source and path of the investment funds and all related fees before submitting an EB-5 application.
EB-5 funds and all related fees must be traced from their original, lawfully obtained source to the time of investment in the US. Each movement of those funds from origin to investment in an EB-5 project must be properly documented.
Because every investor has a unique situation, the way he or she accumulated the investment funds will be unique. Multiple layers of documentation will be required to prove a legitimate source of funds under USCIS regulations for the EB-5 program.
USCIS accepts several sources of funds and also recognises international, local, and cultural business practices as long as the transactions are legitimate and made through proper banking and financial channels.
Some accepted sources of funds include:
- Employment earnings and bonuses
- Earnings from investor’s business
- Sale of business assets
- Retirement funds
- Proceeds from a real estate transaction
- Home equity loan
- Loan obtained from the investor’s business
- Loan obtained through a financial institution
- Loan obtained from a friend or family
There would be specific documentation required for each acceptable category of source of funds to ensure their validity and legitimacy, which will be reviewed in conjunction with a US Immigration Attorney prior to submitting an EB-5 application. For a sample checklist of documentation required, please visit: Sample Checklist of Source of Funds Documents to be Submitted by an EB-5 Applicant.
It is important to note that if USCIS is unsatisfied with the transparency or authenticity of the documentation provided for any reason, the agency will either request further evidence from the EB-5 applicant or immediately deny the application.
In conclusion, USCIS conducts extensive due diligence on the foreign nationals ahead of approving an EB-5 petition. This is an arduous process, entailing a significant amount of pre-work and documentation by any EB-5 applicant, which must be completed in accordance with US regulations and overseen by a US Immigration Attorney.