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Source of Funds
All funds invested in an EB-5 green card project, plus the regional center’s subscription fee, must be traced and shown to be from a legal source.
Each case is different. Some people take a distribution from a company and some have savings over time. One common source is to sell a piece of real estate or take out a bank loan with the property being collateral. In these situations, the USCIS often wants proof of the source of the assets used to purchase the property.
It has usually been the case, when the property was purchased more than seven years ago, documentation of the source of funds to buy the real estate is not needed. Recently, the USCIS has issued a few Requests for Evidence (RFE) asking for the source of the assets used up to 11 years ago to purchase real estate. Few keep records so long even in the U.S. I saw such an RFE for an EB-5 investor from the UK 5 years ago. I presented evidence that business records in the UK need only be kept for 7 years (I recall) for tax purposes and the case was approved.
Heightened government source of funds scrutiny has been anticipated since the USCIS brought in a new person with a financial crimes background to run the EB-5 unit.
I have Chinese-fluent staff to assist with gathering the needed source of funds documents. We have been successful in providing the legal source of funds in almost all cases and we are being more diligent than ever.
I spoke at the 3rd Annual Southern California EB-5 Conference in Newport Beach this week. I learned some are considering a lawsuit challenging the Department of State and USCIS’ methodology of allocating the 10,000 EB-5 visas. They believe spouses and children of a principal EB-5 immigrant should be allowed to immigrate without a visa number.
If successful (and such a lawsuit would probably take years to resolve), there would be plenty of EB-5 visa numbers for years to come. The filing of the I-526 is the investor’s priority date (place in line). Today projections are that the EB-5 China quota will backlog in fiscal year 2015. Given the slow processing of most regional center based I-526 applications, the quota retrogression may not substantially lengthen the immigration timeframe we see today. No one knows the demand for visas until the thousands of I-526s on file are decided. But, there have been some approvals for a few large projects which will use many visa numbers in fiscal year 2015. We will have to see the length of the visa backlog to determine the added wait time, if any, for an immigrant visa.