A Report on Source of Funds:
Perils of the
Administrative Fee
by Catharine Yen and
Christian Triantaphyllis
Because of the stringent
requirements of the EB-5
program, documenting the
source of funds used for an
EB-5 investor’s investment
can be a challenging task.
An investor must not only
prove that he has the funds
to make the investment,
but he must also prove that
those funds came from legal
sources. Therefore, the goal is to
thoroughly and credibly document
the investor’s source of funds to the
satisfaction of the USCIS officer.
When analyzing source of funds
documentation, the officer follows
the preponderance of the evidence
standard, which means determining that it is “more likely
than not” that the claims in the
immigrant petition are true.
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The process of demonstrating
an investor’s lawful source of funds
is complex, as the investment often
consists of merging funds from various
bank accounts, salaries, and real estate sales
that add up to the total EB-5 investment. For this
reason, once the investor has accumulated his investment
amount into one account, a one lump-sum wire transfer of
the capital contribution, rather than multiple wire transfers of
smaller amounts from multiple bank accounts, can oftentimes be
more straightforward from a paperwork standpoint when documenting source of funds. Nonetheless, it must be proven that
all funds put toward an EB-5 investment have originated from
lawful sources, whether invested in a lump sum or piecemeal.
Along with the investment capital, investors also pay ancillary
fees, including an administrative fee to the regional center
handling the EB-5 investment, which may come under USCIS
scrutiny. Though current EB-5 regulations do not extend the
lawful source of funds requirement to the administrative fee,
USCIS nonetheless requires such documentation. In this article,
we will discuss the documentation that current EB-5 regulations
require of the source of funds and actual USCIS practices. Based
on USCIS-issued requests for further evidence, it is clear that
USCIS is analyzing the source of administrative fees irrespective
of what the regulations say. As such, this article will trace the
implications and offer practice tips for professionals operating
in the field.
E B 5 I n v e s to r s M ag a z i n e