The EB-5 investment program was started in the 1990’s as a way to attract foreign investors to the idea of investing in a U.S. based business venture. To attract foreign investments, the government authorized the issuance of special investor visas to any foreign citizen who invests a substantial amount of capital into the U.S. economy by investing in a U.S. based business venture. In exchange for the investment, foreign investors get the chance to live and work in the U.S., and the chance to bring their immediate family along to live and work in the U.S. as well.
Getting the Funds
While many foreign investors are open to the idea of investing a substantial amount of capital in the U.S. in exchange for a U.S. visa, they may be unsure how to raise the amount of capital necessary to meet minimum investment requirements. In order to stimulate hard hit industries, the government allows investors to invest $500,000 in designated industries or at least $1,000,000 in all others. This means that investors need to have at least $500,000 ready to invest before they can even apply for the EB5 visa.
Fortunately, the government allows investors to raise minimum investment amounts by receiving gift proceeds from friends and family, including parents, even if they themselves are not U.S. citizens.
Hurdles to EB-5 Approval
For gift proceeds to be allowed, the source of the funds must be legitimate, and anyone who makes a gift to the investor to be used as an investment must be able to show that the gifted funds were originally earned legally. This can generally be shown through financial records like bank statements and tax documents. Before accepting funds as a gift toward an investment, investors are encouraged to ask the gifter to make the gift once they have a record to show that the funds are legitimate.
For help in compiling the necessary record, an experienced EB-5 investor visa lawyer or accountant can be consulted.
No matter how close the relationship to the investor, anyone who gifts any amount of cash to the investor for an EB5 investment must be able to produce documentation to show that the funds are legitimate. This is true even if the gift comes from parents or a spouse.
For Best Results, Work with an Attorney
Only a limited number of EB-5 visas are awarded each year. It can take up to a year before a foreign investor finds out whether or not an EB-5 application has been approved, and visas are issued as they are applied for. This means that any mistakes or errors in filling out the application or gathering the necessary documentation can lead to an investor’s application being denied – adding several months, unnecessarily, to the waiting and processing time. For the best chance at being approved for an EB-5 visa as quickly as possible, foreign investors are advised to work with an EB-5 investor visa attorney from the beginning of the application process.