Navigating the EB-5 Immigrant Investor Program’s source of funds requirements demands thorough detail and documentation. For many investors, gifts from family members often present a viable source for their investment.

Documentation of gift

USCIS requires comprehensive documentation to establish the gift’s legitimacy. This includes a notarized gift affidavit signed by the donor showing their intent to gift the funds to the EB-5 investor. The affidavit should specify the gift amount, the relationship between the donor and investor, and confirm that the gift is not a loan.

Gifts from family members demonstrate familial support of an investor’s immigration and investment endeavors, which can be viewed positively by USCIS. However, gifts from friends and non-family members may raise additional scrutiny by USCIS due to the potential for suspicion regarding the true nature of the relationship between the donor and the investor.

Source of donor’s funds

USCIS will scrutinize the source of the donor’s funds to ensure they are lawfully obtained. Donors will need to provide evidence of how they
initially obtained the funds, such as bank statements, tax returns, and W-2 forms. The evidence required to properly trace and source funds varies from source to source.

Gift tax implications

Investors and donors carefully consider the potential tax implications associated with gifts. Gifts originating from foreign sources can also
introduce variations in tax obligations. To navigate these complexities, it is advisable to consult with an accountant or tax advisor.

Preponderance of the evidence’ standard:

All EB-5 petitions must provide enough evidence to show that it is more likely than not that an investor’s claims are true. This standard places the burden of proof on the investor, requiring them to present comprehensive documentation and information to support their petition. It also serves as a guiding principle for all USCIS adjudicating officers who evaluate EB-5 petitions.

Utilizing gifts as a source of funds for an EB-5 investment can be advantageous. However, it requires thorough documentation, transparency, and compliance with USCIS guidelines. The key to a credible and transparent EB-5 source of funds strategy is the collaboration between investors, donors, attorneys, and tax professionals. This comprehensive approach ensures that all aspects of the gift’s documentation, tax
implications, and standards are addressed.

If you have questions about the EB-5 process, please email us at rpatel@patellegal.com and jtrevino@patellegal.com.