Seeking classification as an immigrant investor under the employment based fifth preference category, also known as EB-5, carries an evidentiary burden on the investor. An integral part of the submission for conditional residency is that the petition must demonstrate the source and the path of the funds used in the investment structure. This report is referred to as the Source of Funds Report or SOF Report.

The EB-5 regulations require the investor to prove that the invested capital was “obtained through lawful means.” The USCIS (US Citizenship and Immigration Services) requires a detailed report (1) showing how the investor obtained the funds used for the investment and (2) providing a clearly documented “path of funds” from the original source to the commercial enterprise’s bank account.

EB-5 investors’ past income is also a factor used by the USCIS in its evaluation of the EB-5 investor’s conditional residency petition. Income tax records should be submitted for a minimum of five years. In addition to supporting the Source of Funds Report the EB-5 investor’s income tax returns will also assist in proving a “pattern” of income. A “pattern” of income helps support situations where an investor may not have earned a substantial annual income in recent years but accumulated the funds over time.

An equally important part of the documentation process is the path of funds. This means that the flow of funds must be identified, lawful, and documented. The path of funds will demonstrate where the funds originated and how they ultimately arrived in the US investment escrow account.

Retaining a certified public accountant, both in the investor’s home country and in the United States, is highly recommended and will ensure full compliance for reporting purposes. At YWL, we offer the following service from the moment you make original decision:

  • Individual tax planning
  • Creation, Implementation and management of US organization structure
  • Reorganization of current corporation operations
  • Overall cooperate operations
  • Estate Planning