For families pursuing a US green card through investment, immigration planning and tax planning should begin at the same time. Receiving a Green Card can change not only where you live, but also how your income, assets, accounts, gifts, and future estate planning are taxed.
That is why tax planning should not be treated as an afterthought. A family that plans early may have more flexibility around asset sales, trust structures, foreign reporting, remittance timing, and long-term wealth organization than a family that waits until after their US tax residence begins.
Why Does Tax Planning Matter Before an EB-5 Move?
Once an individual becomes a US tax resident, the US tax system can apply far more broadly than many immigrant investors expect. In general, US tax residents, including Green Card holders, are taxed on their worldwide income.
That means pre-migration planning is often the stage when families should review:
- foreign businesses, trusts, and holding structures
- investment portfolios and unrealized gains
- inheritance and gifting plans
- foreign bank and brokerage accounts
- foreign mutual funds, unit trusts, ETFs (exchange-traded funds), or other pooled investment vehicles
- ownership stakes in foreign corporations
- where income will come from after migration
- whether certain transactions are better completed before US tax residence begins
For many eb5 investors, the most important tax planning opportunities happen before the Green Card is activated, not after.
What Are the US Tax Implications of Becoming a Green Card Holder?
A Green Card holder is generally treated as a US tax resident. That means filing US tax returns and reporting worldwide income to the Internal Revenue Service (IRS), not just US-sourced income.
Worldwide income can include:
- salary and bonus income
- rental income
- dividends and interest
- capital gains
- partnership or business income
- certain pension income
- compensation earned outside the United States
This often surprises families who assume US tax applies only to income earned after they move. In many cases, once US tax residence starts, the reporting obligation becomes global.
Do I Need to Pay US Taxes on Global Income?
In general, yes.
For Green Card holders, becoming a US tax resident usually means you have to report your worldwide income to the IRS. That doesn’t automatically mean you’ll be taxed twice on all of your income, but it does mean that income is now part of the US tax system and may need to be reported and reviewed.
This is especially important for families who continue to earn income from:
- businesses in their home country
- foreign real estate
- foreign investment accounts
- inherited overseas assets
- compensation tied to non-US entities
A common mistake is assuming that if income stays abroad, it stays outside the US tax system. For a US tax resident, that is often not the case.
How Do Families Avoid Dual Taxation?
This is one of the most important planning questions in any cross-border move.
The two main tools often used to reduce double taxation are:
- the foreign tax credit, which may allow a taxpayer to offset US tax with certain taxes they have already paid to a foreign country
- the foreign earned income exclusion (FEIE), which may allow eligible taxpayers to exclude a limited amount of foreign earned income, but only if they meet the bona fide residence test or the physical presence test for time actually spent living and working outside the United States
One important clarification about the FEIE: once you’ve moved to and are living in the United States, you generally can’t use the FEIE to shelter income you’re still earning back home. That’s because this exclusion is based on where you’re physically living and working, not just where the income comes from. The FEIE mainly helps before the investor moves, or when family members keep living and working outside the US after the investor has already relocated.
Tax treaties and double taxation avoidance agreements may also help, depending on the country and the type of income involved.
The key point for EB-5 families is that “worldwide income” doesn’t automatically mean paying full tax twice on everything. But it does mean tax planning gets more technical, and the right answer depends on where the income comes from, which country is involved, whether you’re still living abroad, and how your family’s finances are structured.
When Does US Tax Residence Begin?
For many EB-5 families, this is a critical question, because timing affects planning.
There are two main ways someone can become a US tax resident: the Green Card test or, in some cases, the substantial presence test, which is based on how many days you spend in the US. For EB-5 families, the Green Card test usually matters most: once you become a lawful permanent resident—by obtaining your conditional Green Card—you generally become a US tax resident, too.
That is why families often benefit from doing their tax review before they finalize their move. Transactions that are simple before residency begins may become more complicated after.
What Should Families Review Before Migrating?
Pre-migration tax planning often includes a review of both income and assets.
Important areas may include:
- whether to sell certain appreciated assets before becoming a US tax resident
- whether family gifting plans should be completed before migration
- whether trust or estate structures need to be reviewed
- whether foreign companies, partnerships, or investment vehicles create future US reporting complexity
- whether foreign pensions or retirement accounts need specialized analysis
- whether foreign mutual funds, unit trusts, ETFs, or other pooled investment vehicles could trigger passive foreign investment company (PFIC) treatment
- whether ownership in a foreign corporation could trigger controlled foreign corporation (CFC) reporting
- how state tax residence may apply after the move
If you have large, unrealized gains in foreign securities, a mark-to-market election is another option worth exploring before you move. In certain cases, new US residents can choose to treat specific foreign assets as if they were sold at fair market value right before residency begins. This can reset the asset’s cost basis for US tax purposes going forward, which may reduce future US tax on those gains. This election is technical and depends heavily on your specific situation, in which case LCR Capital Partners can refer EB-5 applicants and their families to qualified tax advisors for a closer look.
Families should also organize their records early, including bank statements, account summaries, property records, trust documents, tax returns, and proof of cost basis for major assets.
What Foreign Asset Reporting Rules Should New Green Card Holders Know?
US tax compliance is not limited to income tax returns.
Depending on the facts, a Green Card holder may also need to file foreign asset and foreign account reports. Two of the most common are:
- Foreign bank and financial accounts (FBAR) reporting, generally required when the aggregate value of foreign financial accounts exceeds $10,000 at any point during the year
- Form 8938 reporting under the Foreign Account Tax Compliance Act (FATCA), which applies when specified foreign financial assets exceed certain thresholds
In some cases, foreign gifts or inheritances may also trigger information reporting, including Form 3520, even if the amount is not itself taxable.
These filings are often where new US residents run into trouble, because an asset may be perfectly legal and tax-compliant in the home country but still require separate US reporting.
What About PFICs and Controlled Foreign Corporations?
Beyond account and gift reporting, two structural issues come up often for EB-5 investors with international portfolios and business interests.
Many investors hold foreign mutual funds, unit trusts, ETFs, or similar pooled investment funds. These assets often fall under what is called the passive foreign investment company (PFIC) rules, a set of US tax rules that can lead to complicated, and sometimes costly, tax treatment if they are not caught early. If you hold these kinds of investments, get them reviewed before you become a US tax resident, not after.
Separately, if you own more than 10 percent of a foreign company, you may have to file controlled foreign corporation (CFC) reports and could even owe US tax on that company’s earnings, even if you never received a payout. This applies no matter which country the business is in, which is why business ownership should be reviewed before you move, not afterward. LCR Capital Partners can refer EB-5 applicants and their families to qualified tax advisors for a closer look at PFIC and CFC exposure.
What About Foreign Pensions and Retirement Accounts?
Many EB-5 investors have significant pension or retirement savings built up in their home country. How the US taxes these accounts depends a lot on the country, the type of plan, and whether a tax treaty applies. Sometimes a foreign pension is treated much like a US retirement account. Other times, it can trigger US tax reporting, or even lead to US tax owed, even if you have not yet withdrawn any money from it. Because the answer really depends on the specific plan and country, you should have any foreign pension or retirement account reviewed individually before you move. Do not assume it is automatically tax-neutral.
What About Gifts, Inheritances, and Estate Planning?
Cross-border families should review inheritance and gifting plans early.
In general, certain foreign gifts or inheritances received by a US person may be reportable even if they are not immediately taxed as income. Estate and gift planning also become more important once a family member enters the US tax system, especially when there are non-US assets, trusts, or future inheritance expectations.
Trust planning deserves special attention here. Reviewing or restructuring a trust before you become a US taxpayer, sometimes called pre-immigration trust planning, is one of the highest-impact and most often overlooked opportunities for high-net-worth EB-5 families. Decisions made before the move about how a trust is set up, funded, and run can significantly affect how that trust and its future payouts are taxed once a family member becomes a US taxpayer. If you have an existing family trust, or are considering setting one up, raise the issue with a cross-border tax advisor well before your Green Card is activated.
This is also relevant for families thinking about the long term. A tax plan should not only consider the move to the US, but also how wealth may later be transferred between generations.
What Should Families Know About Home-Country Remittance and Foreign Exchange Rules?
For many EB-5 families, pre-migration planning also means understanding home-country rules on sending money abroad, sometimes called foreign exchange controls. These rules vary widely by country, and families should understand the framework that applies to them well before they move capital abroad. A few examples across different regions illustrate the range:
- The Reserve Bank of India (RBI) permits resident Indians to remit up to USD 250,000 per financial year under the Liberalised Remittance Scheme (LRS) for permitted purposes, subject to applicable rules, and allows consolidation of remittances by close relatives in certain situations. For financial year 2025–2026, the Union Budget raised the tax collected at source (TCS) threshold on LRS remittances from ₹7 lakh to ₹10 lakh, with no TCS generally applied up to that threshold and with TCS potentially applying above it for investment and other covered purposes.
- Brazil’s Central Bank imposes its own registration, reporting, and documentation requirements on outbound transfers, and residents should confirm current limits and procedures before initiating a transfer.
- China’s State Administration of Foreign Exchange (SAFE) generally limits individual foreign currency purchases to the equivalent of USD 50,000 per year, with larger cross-border transfers typically requiring additional documentation and approval.
- South Africa’s Reserve Bank (SARB) allows residents a foreign investment allowance for outward investment, in addition to a separate annual discretionary allowance, both subject to tax clearance and compliance requirements.
These examples illustrate a broader point: remittance and foreign exchange rules can meaningfully affect timing and structuring when you move capital abroad, regardless of your home country. For this reason, global tax planning and remittance planning should be coordinated rather than handled separately.
Why Should Families Think About State Taxes,Too?
Many global families focus only on US federal tax, but state tax can matter as well.
Where you live in the United States can affect your ongoing tax exposure. Some US states have no individual income tax, whereas others may tax residents more aggressively and use facts such as home ownership, driver’s licenses, voter registration, and family ties to determine residency.
For families planning an EB-5 move, the choice of state can therefore affect not only lifestyle and schools, but also long-term tax efficiency. Because establishing residency in a lower-tax state after the fact is far harder than planning for it in advance, families should factor their exposure to US state taxes into their decision about where to settle as part of pre-migration planning, not as something to revisit after they have already relocated.
What Happens If a Family Later Gives Up a Green Card?
The possibility of giving up one’s Green Card is another reason that pre- and post-migration planning matters.
A long-term Green Card holder who later gives up their residency may need to look at what is known as the US expatriation, or exit tax, rules. One group these rules can apply to is individuals who have held a Green Card in at least eight of the last fifteen tax years. But that eight-of-fifteen-year rule is just one way you can end up classified as a “covered expatriate,” the term used for someone subject to the exit tax. You can also be classified this way based on your net worth, or based on how much US tax you have owed on average in recent years, regardless of how long you held your Green Card.
Meeting just one of these tests can be enough to trigger covered expatriate status and the exit tax that comes with it. Because this analysis is technical, and the thresholds change over time, LCR Capital Partners can refer EB-5 applicants and their families to qualified tax advisors for a detailed exit tax review.
Families do not need to decide this issue on day one, but they should understand that a Green Card can create long-term tax consequences even if they later leave the United States.
What Is the Best Practical Approach for EB-5 Families?
The strongest approach is usually to start early and coordinate across advisors.
That typically means working with:
- an immigration attorney for the investment immigration process
- a cross-border tax advisor for pre- and post-migration tax planning
- a wealth advisor who understands international structuring, remittance rules, and long-term portfolio planning
Families should not wait until after their Green Card begins to learn how the United States will treat their foreign accounts, businesses, gifts, trusts, pensions, or home-country tax position.
Final Takeaway
For families combining immigration and investment planning, tax planning should start before the move, not after. Once someone becomes a US tax resident or Green Card holder, the US can tax their worldwide income and require extra reporting on foreign accounts, assets, gifts, and certain investment structures. The good news is that tools like the foreign tax credit, the foreign earned income exclusion (FEIE), and tax treaties can help reduce double taxation in the right situations. But these rules are technical, and the earlier a family plans, the more options they usually have. A successful EB-5 move is not just about getting residency. It is about arriving with a tax strategy that supports your family’s long-term goals.
Next Step: Partnering With LCR Capital Partners
For families pursuing a US green card through investment, tax planning is one of the most important parts of preparing for a successful transition to life in the United States. The right strategy should consider not only immigration timing, but also global income, foreign assets, remittance planning, and long-term wealth preservation.
LCR Capital Partners is a leading eb5 regional center and fund manager serving 1,200+ clients across 50+ countries. We help families approach EB-5 with greater clarity by supporting project selection, eb5 source-of-funds readiness, and coordination with experienced immigration, tax, and cross-border planning professionals. If you are evaluating your EB-5 options, the next step is to align your immigration plan with a thoughtful tax plan before your move begins.
