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FAQs
(Source of Funds Related Questions​ ​)

Source of Funds Related Questions​

What is a Source of Funds? How does it work?

EB-5 regulations require investors to demonstrate that both their investment funds and any administrative fees were obtained through lawful means. To meet this requirement, USCIS expects extensive documentation from the investor.

Key elements include:

  • Lawful source of funds: The investor must prove that their capital was earned or acquired legally. This can include income from employment, the sale of assets, loans, gifts, inheritances, or other legitimate sources.
  • Documented path of funds: In addition to showing where the money originated, USCIS requires the investor to trace the movement of funds—from the original source to the US project escrow account. This includes documenting every step, such as transfers between personal accounts, currency conversions, and international wire transfers.
  • Individualized evidence: Since every investor’s financial history is different, the documentation strategy must be tailored to their specific circumstances. The source and path of funds may involve a variety of documents such as tax returns, bank statements, sales agreements, loan contracts, and gift affidavits.
  • Complete and accurate translations: Any non-English documents submitted must be accompanied by certified English translations to ensure USCIS can properly evaluate them.
  • High scrutiny by USCIS: Immigration officers carefully examine the legitimacy and transparency of each investor’s funds. A lack of clarity, inconsistencies, or missing documents can lead to a Request for Evidence (RFE), delays, or even denial of the EB-5 petition.

Because of the detailed and demanding nature of this process, it is essential for investors to work closely and transparently with their immigration attorney. Preparing thorough, accurate documentation takes time and effort but is crucial for the success of the EB-5 application.

USCIS recognizes a wide range of lawful sources of funds, including those arising from various professional, business, and personal financial activities. It also accepts different international, local, and cultural business practices—provided the transactions are legitimate and processed through recognized financial and banking channels.

Commonly accepted sources of funds include:

  1. Employment income and bonuses
  2. Earnings from the investor’s business
  3. Sale of business assets
  4. Inheritance
  5. Gift from a family member or other individual
  6. Sale of stocks or securities
  7. Retirement account withdrawals
  8. Proceeds from real estate transactions
  9. Home equity loans
  10. Loans obtained from the investor’s own business
  11. Loans from licensed financial institutions
  12. Loans from friends or family members

Important considerations for loan-based funds:

  • Loan proceeds must generally be secured by the investor’s personal assets (i.e., collateralized).
  • The investor must demonstrate the lawful source of the funds used to acquire the collateral asset.
  • The lender’s funds must also come from a lawful and verifiable source.
  • Unsecured loans from family or reputable institutions may be accepted, but must be thoroughly documented, including:
    • Purpose of the loan
    • Terms of repayment
    • Interest rate (if applicable)
    • Repayment schedule
    • Source of funds from the lender

Each type of source will require a specific set of documents to prove both its legitimacy and the clear path of funds to the EB-5 investment.

LCR is proud to provide its clients with a dedicated source of funds consultation, which helps streamline this complex process and is a unique differentiator in the industry.

Yes, an investor can use multiple sources of funds for their EB-5 investment. However, each source must be lawful, and every transfer must be fully documented and verifiable.

While it is entirely acceptable to combine different sources—such as salary savings, sale of property, gifts, and loans—doing so can make the documentation process more complex. USCIS requires a clear and traceable path for each portion of the funds, so careful preparation is essential.

Helpful analogies often used to explain this concept:

  • Staircase analogy: Each transaction or transfer must be tracked step by step, like climbing stairs—no steps can be skipped.
  • Tree analogy: Each source of funds is a branch. USCIS will examine each branch to trace it back to a lawful root.
  • Swimming pool analogy: If one dollar from an undocumented or unlawful source enters the “pool” of investment funds, it can contaminate the entire application.

Because of this, investors should work closely with experienced advisors to ensure that every dollar is properly sourced and documented.

LCR sets itself apart in the EB-5 industry by offering comprehensive client support, including a dedicated Source of Funds (SOF) Advisory Team. This team works closely with investors to help identify the most straightforward, efficient, and compliant ways to document their source and path of funds in preparation for USCIS review.

Key aspects of the SOF Advisory Team’s role:

  • Guides investors in organizing financial records and selecting the most appropriate sources of funds.
  • Helps streamline the documentation process to reduce complexity and potential delays.
  • Provides practical insights into how USCIS reviews financial documentation.

It’s important to note that the investor will also work directly with their immigration attorney, who is ultimately responsible for preparing and submitting the official source of funds documentation to USCIS. LCR’s SOF advisory services are offered as a complimentary, value-added support, intended to assist investors before their documents are reviewed by legal counsel.

This collaborative approach ensures the investor is well-prepared and that the documentation process is as smooth and efficient as possible.

The immigration attorney plays a critical role in the EB-5 process, particularly in verifying and documenting the investor’s source and path of funds. Their involvement is essential to ensure that the petition meets all legal and regulatory requirements.

Key responsibilities of the immigration attorney include:

  • Assisting the investor in identifying appropriate and lawful sources of funds
  • Reviewing and evaluating the documentation for each source to determine if it meets USCIS standards
  • Advising the investor on any potential issues, risks, or gaps in the financial documentation
  • Organizing and preparing the full EB-5 petition, including the complete source and path of funds narrative, in compliance with USCIS guidelines

The immigration attorney ultimately signs off on and submits the petition to USCIS, taking full responsibility for the legal adequacy of the filing. While advisors such as LCR’s SOF team may provide valuable guidance during the preparation phase, only a qualified immigration attorney can ensure that the documentation meets the legal threshold required by USCIS.

Absolutely. LCR’s SOF Advisory Team provides preliminary guidance to help investors prepare their source of funds documentation. However, the immigration attorney is responsible for compiling and finalizing the complete petition.

The attorney may request additional documents or information beyond what the SOF team recommends to ensure full compliance with USCIS requirements. They will carefully review and trace each transaction in detail as part of the application process to confirm the lawfulness and legitimacy of the funds.

Ultimately, the immigration attorney has the final authority to determine whether the documentation is sufficient and may require further evidence to avoid delays or denials.

While EB-5 regulations require an unbroken chain of documentation tracing funds back to their original lawful source, USCIS does allow some flexibility in cases where certain documents cannot be obtained.

Key points to consider:

  • If some documentation is missing or unavailable, the investor’s I-526 petition will not necessarily be denied outright.
  • In such cases, the investor can submit declarations (affidavits) that explain the circumstances, provide the necessary details, and clarify why specific documents cannot be obtained.
  • Declarations can be prepared by the investor or by knowledgeable third parties who can attest to the facts (e.g., a tax professional in the investor’s country).
  • USCIS often accepts credible declarations to supplement missing documents, especially when official documentation is not required or unavailable in the investor’s home country.
  • However, declarations should be used only as a last resort and cannot replace essential required documents.
  • All documents submitted to USCIS must be accompanied by complete and accurate English translations if they are not originally in English.

Failure to provide sufficient documentation or credible explanations can lead to Requests for Evidence (RFEs), delays, or possible denials. Therefore, it is critical to work closely with your immigration attorney to prepare the strongest possible evidence package.

Yes, gifted funds can be used for an EB-5 investment, provided certain conditions are met:

  • Any applicable gift taxes must be properly paid according to the relevant tax laws.
  • The gift must be a genuine arm’s-length transaction, meaning it is a legitimate transfer without expectations of repayment or conditions attached.
  • It must be clearly demonstrated that the gifted funds are not a loan disguised as a gift, and that the investor will not be required to return the funds after obtaining permanent resident status.

Proper documentation, including gift affidavits and evidence of tax compliance, is essential to satisfy USCIS requirements.

The core reason clients appreciate working with me is my deep knowledge and expertise combined with the ability to explain complex legal and financial information in a simple, clear, and concise way.

Many EB-5 investors come from non-technical backgrounds and can feel overwhelmed by legal jargon or detailed financial data related to source of funds or project investments. My strength lies in translating these complicated topics into plain language that’s easy to understand, empowering clients to make confident, informed decisions. This clarity builds trust and makes the entire EB-5 process less intimidating for them.

When talking to entrepreneurs and investors about why EB-5 could be the better option than E-2 or other visas, focus on these key points:

  1. Permanent Residency — Real Green Cards
    EB-5 leads directly to a Green Card for the investor and their family, meaning permanent US residency. E-2 is a non-immigrant visa — it lets you stay in the US temporarily but does not grant permanent status.
  2. Clear Investment & Job Creation Requirements
    EB-5 requires a substantial investment — $800,000 if in a Targeted Employment Area or $1,050,000 otherwise — and mandates creating at least 10 full-time US jobs. This clear, upfront framework gives investors predictable outcomes and a direct path to permanent residency. E-2 requires no minimum investment and no job creation, but it’s more flexible and less certain as it depends on the ongoing success of the business.
  3. Open to All Nationalities
    EB-5 is available to investors from any country, while E-2 visas only work if your country has a treaty with the US That excludes many potential applicants.
  4. Business Flexibility for Expansion or Acquisition
    EB-5 supports entrepreneurs looking to establish or expand a business anywhere in the US, as long as they meet investment and job creation rules. E-2 is generally for managing an existing business and may involve smaller investments but less immigration certainty.
  5. Family Benefits
    Both visas allow spouses and children under 21 to live and study in the US, but only EB-5 gives family members permanent residency with Green Cards.

How to frame this to clients:

  • Emphasize EB-5 as a permanent, no-renewal visa option, offering long-term security and stability for their family.
  • Highlight that EB-5 is a direct, predictable path to US residency, backed by clear government rules and requirements.
  • Point out that for investors with sufficient capital looking to make a real foothold in the US, EB-5 eliminates uncertainty around visa renewals or business risks tied to E-2.
  • Use E-2 as a contrast to show how EB-5 is the better choice for those who want true immigration certainty and a scalable business presence in the US

Key Issues Observed:

  1. Bank Recognition & Remittance Challenges
    Nigerian banks often face challenges with recognition by global and US banks. This can complicate or delay remittances and fund transfers to the US, requiring extra care in documentation and bank compliance.
  2. Documentation Gaps for Business Income
    Many Nigerian investors earning income from businesses struggle to provide a full, standardized set of documentation that meets USCIS standards for proof of clean source of funds. Documentation may be inconsistent, incomplete, or sometimes generated after the fact.
  3. Risks of Incomplete or Altered Documents
    There are cases where investors submit documents that appear incomplete, suspicious, or created retroactively to meet requirements. This poses risks to application credibility and delays processing.

Currently, there are no confirmed changes to the EB-5 program. The only commonly anticipated update is a potential increase in the minimum investment amount. However, investors who have already filed their petitions before any such changes take effect are generally “grandfathered,” meaning they will not be impacted by the new rules. Until any official updates are announced and implemented, the existing requirements remain in place.

If you cannot obtain an official birth certificate for your US immigrant visa application, USCIS may accept certain alternative documents known as secondary evidence to verify your date and place of birth:

  • School Records: In many countries (for example, India), school documents such as the 10th class marksheet often contain the applicant’s date of birth and can serve as proof.
  • Hospital Records: If you were born in a hospital, medical or admission records from the hospital may provide official evidence of your birth details.
  • Affidavits: Notarized affidavits from family members or others with direct personal knowledge of your birth can be submitted. These affidavits should explain the affiant’s relationship to you, the circumstances of your birth, and any other supporting information. Multiple affidavits may strengthen the case.

These alternatives help USCIS establish identity and age when an official birth certificate is unavailable, but it’s important to provide as much credible supporting evidence as possible.

Tax filing obligations depend on the investor’s and their family members’ US visa status and employment history:

  • If the investor or any dependent family member is currently in the US on a nonimmigrant or dual intent visa (such as F-1, H-1B, etc.) and has been employed or holds a Social Security Number (SSN), they are required to file US taxes.
  • If the investor or family members do not have an SSN and have not been employed in the US, they are not required to file US taxes until further status changes.
  • Once the Conditional Green Card is issued, the investor and their dependents must obtain a Social Security Number (if not already held) and begin complying with US tax filing requirements promptly.

In summary, tax filing starts once the individual has an SSN or US employment history, or upon receiving lawful permanent resident status (Conditional Green Card).

As an EB-5 investor, understanding US tax obligations is crucial because:

  • Filing is mandatory: All US residents and citizens must file tax returns on their worldwide income and pay their fair share. This includes EB-5 investors with conditional or permanent residency.
  • Income from investments: Income derived from participation in EB-5 regional centers or other US investments may be subject to US income tax or withholding, regardless of whether the investor resides inside or outside the US
  • Worldwide taxation: The US taxes residents on all global income and may impose estate taxes on worldwide holdings. This differs from some home countries’ tax systems which may exclude foreign income or allow tax avoidance by residing abroad.
  • Tax planning before residency: It is highly recommended that EB-5 investors consult qualified tax professionals familiar with both US and home country tax laws before obtaining conditional permanent residency. Proper planning can minimize tax liabilities and ensure compliance.
  • Tax responsibilities upon conditional residency:
    • Once I-526 is approved and conditional residency granted, you become a US tax resident.
    • You must file annual tax returns (Form 1040) reporting worldwide income from the date you obtained residency status. 
    • Failing to report income correctly can jeopardize your permanent residency or citizenship eligibility and may lead to severe penalties.
  • Tax forms for investors:
    • Investment companies typically issue Form K-1 or similar tax documents annually.
    • Before conditional residency, investors file Form 1040NR (non-resident).
    • After conditional residency, investors must file Form 1040 (resident). Filing Form 1040NR after receiving a green card risks your residency status.
  • Deadlines and reporting:
    • US residents file taxes by April 15 each year.
    • Overseas residents file by June 15.
    • Investors with foreign financial accounts totaling over $10,000 must file the FBAR form (FinCEN Form 114) by June 30.
  • Professional advice: Given the complexity and consequences, working with an experienced CPA or tax professional is strongly advised to ensure compliance and proper tax planning.

A Social Security Number (SSN) is a unique nine-digit number issued by the US government to track lifetime earnings and work history. It’s also widely used for credit, banking, government benefits, insurance, buying property, and many other purposes.

Automatic Assignment

  • If you requested an SSN on your DS-260 visa application form, the Social Security Administration (SSA) will likely assign your SSN automatically shortly after you arrive in the US

Applying In-Person (If not automatically assigned)

If you don’t receive an SSN automatically, applying is simple:

  • Visit the nearest Social Security Office in person.
  • Bring the following documents to prove your identity and work authorization:
    • Your passport with your immigrant visa stamp.
    • Your Permanent Resident Card (if received).
    • Other acceptable immigration documents include:
      • Form I-551 (Green Card),
      • Form I-94 (Arrival/Departure Record),
      • Form I-766 (Employment Authorization Document, EAD),
      • Admission stamp showing work authorization.

Important Security Tips

  • Only share your SSN when absolutely necessary—some entities ask but may not legally need it.
  • You can leave the SSN blank on medical or other forms if asked, but understand the entity may refuse service.
  • Don’t carry your Social Security card daily—keep it safe at home or in a secure place.
  • If lost or stolen, report immediately and apply for a replacement.
  • Protect any documents (including electronic files) containing your SSN to prevent identity theft.

Notify Relevant Parties

  • Inform your employer, school, or other relevant institutions once you receive your SSN and Green Card.

Opening a US bank account is one of the most important steps you can take as a new immigrant to manage your finances and begin building financial stability.

What You Need to Open a Bank Account:

  1. Identification Number
    • Social Security Number (SSN): Most banks require an SSN.
    • If your SSN is pending, some banks may allow you to open an account using an ITIN (Individual Taxpayer Identification Number) or without a tax ID—temporarily—if you provide alternative ID and proof of immigration status.
  2. Valid Photo Identification
    Acceptable IDs typically include:
    • Unexpired passport
    • Green Card (Form I-551), if received
    • US driver’s license or state-issued ID (if obtained)
  3. Proof of US Address
    Common documents include:
    • A utility bill, lease agreement, or official letter addressed to your US residence
    • A letter from your employer or school (if applicable)

When and Where to Open the Account:

  • You can open a bank account even on a visitor visa (B1/B2), though having a green card or lawful immigration status (such as through EB-5) simplifies the process.
  • Once you receive your SSN, return to the bank to update your records.

How to Choose the Right Bank:

  • Research local branches close to your residence.
  • Compare banks for:
    • Minimum balance requirements
    • Monthly fees
    • Mobile banking features
    • International wire transfer capabilities
    • New immigrant or “international” account programs

Driving is one of the most practical ways to get around in the US, but you can only use your foreign driver’s license for a limited time—and rules vary by state. Eventually, you’ll need to obtain a US state-issued driver’s license.

General Steps to Get a US Driver’s License:

Note: Each US state has its own Department of Motor Vehicles (DMV) or equivalent agency. Procedures vary slightly by state, so always check your state’s DMV website for specific requirements.

Step 1: Prepare Your Documents

Before visiting the DMV, gather these commonly required documents:

  • Valid passport
  • Social Security Number (SSN) or proof you are ineligible
  • Proof of lawful immigration status (e.g., green card, visa, stamped passport)
  • Proof of state residency (e.g., lease agreement, utility bill, bank statement)
  • Foreign or international driver’s license (optional but helpful)
  • Passport-sized photo (some states take this at the DMV)

You’ll also need to fill out a driver’s license application form, available at the DMV or online.

Step 2: Pay Fees

  • Fees vary by state and may cover application, testing, and issuance.
  • You may pay all at once or in separate steps.

Step 3: Pass the Required Tests

  1. Written (Knowledge) Test
  • Tests your understanding of US road rules, signs, and laws.
  • Based on your state’s Driver Handbook—available online or at the DMV.
  • Often 20–50 multiple choice questions. Some states offer versions in multiple languages.
  1. Vision Test
  • Conducted at the DMV or via a certified optometrist.
  • If you wear glasses/contacts, a restriction may be added to your license.
  1. Driving (Road) Test
  • Once you pass the written test, schedule the road test.
  • You must demonstrate safe driving, parking, reversing, and knowledge of vehicle controls.
  • May occur on a closed course or real streets.
  • If you fail, you may have to wait before re-taking and possibly pay a retest fee.

 Tip: Consider taking a driver’s education course, especially if:

  • You’ve never driven in the US
  • Your home country’s rules are very different
  • Your state requires it (e.g., for younger drivers)

Step 4: Receive Your License

  • After passing all tests and submitting documents, you may receive a temporary paper license valid for 30–90 days.
  • Your permanent plastic card license will be mailed to your US address.

Other Important Notes:

  • Double-check your name and details on your license for accuracy.
  • Don’t drive alone with just a learner’s permit unless state law allows.
  • A US driver’s license serves as legal ID and can be used for:
    • Domestic flights
    • Age verification
    • Opening accounts or services

License Validity & Renewal

  • Most states issue licenses valid for 4–8 years.
  • Renewal rules vary by state—check your DMV’s website for your renewal timeline and requirements.

While having health insurance is not legally required to maintain your green card or conditional residency, it is highly recommended for protecting both your health and your finances. US healthcare is expensive, and without coverage, you may face significant out-of-pocket costs if you get sick or injured.

Why You Should Get Health Insurance

  • Medical costs in the US are high.
  • Insurance reduces your financial risk from unexpected illness, injury, or emergencies.
  • Public Charge Rule: Having health insurance may help avoid issues with future immigration applications, as lack of insurance can be seen as a financial liability.

Options for Health Insurance

Before You Receive a Social Security Number (SSN)

You can still get insurance, even without an SSN, especially if you have an ITIN (Individual Taxpayer Identification Number).

  1. Travel Medical Insurance
  • Best if you’re a new immigrant or part-time resident.
  • Coverage typically for 3–6 months.
  • Buy from global insurers or agents in your home country.
  • Accepted by many providers in the US
  1. Indemnity Insurance + MEC Policy
  • Indemnity plans pay fixed cash benefits per treatment or event.
  • MEC (Minimum Essential Coverage) plans cover preventative care and satisfy ACA individual mandate.
  • May be 50% cheaper than ACA plans.
  • Requires an ITIN, but not an SSN.
  • Often used by those wanting more control and lower premiums.
  1. Short-Term Medical Plans
  • Coverage from 1 month up to 3 years, depending on the state.
  • Covers emergencies, doctor visits, hospital stays, etc.
  • Lower premiums and deductibles than ACA plans.
  • Doesn’t cover pre-existing conditions or normal pregnancy.
  • May require health screening or a phone interview.
  • Not allowed in some states like California and New York.

Important: These temporary plans usually do not meet the requirements of the Affordable Care Act (ACA), meaning they don’t offer full protections or subsidies.

After You Receive Your SSN

Once you have an SSN and establish residency, you can explore standard US health insurance options:

  1. Employer-Sponsored Group Insurance
  • Offered by many US employers.
  • Often covers you and your family.
  • Lower cost, as employers usually pay part of the premium.
  1. Individual Insurance via the Marketplace
  • Buy plans directly on HealthCare.gov or your state’s health exchange.
  • If your income qualifies, you may get subsidies to lower your monthly premium and out-of-pocket costs.
  • Requires SSN and proof of legal status.
  1. Plans for Seniors (65+)
  • Most green card holders over 65 do not qualify for Medicare unless they’ve lived in the US for at least 5 years.
  • Instead, they must buy private insurance, which can be expensive, or international senior plans if they travel often.

How Health Insurance Works in the US

  • Monthly Premium: What you pay every month to keep your plan.
  • Deductible: The amount you pay before your insurance starts covering expenses.
  • Copay/Coinsurance: Your share of medical costs after you meet your deductible.
  • Out-of-Pocket Maximum: The most you’ll pay in a year before insurance covers 100%.

You choose a plan based on:

  • Your age and health
  • Whether you’ll stay in the US full-time
  • Your eligibility for subsidies or group coverage

Final Tip

Choose a policy that covers your specific situation. For example:

  • Part-time residents → Travel or short-term medical insurance.
  • New immigrants → Indemnity + MEC, then ACA or group insurance once settled.
  • Seniors → Private or international senior coverage if ineligible for Medicare.

If you need help comparing or selecting a plan, consider speaking to an insurance broker familiar with immigrants and EB-5 investors.

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