EB-5 source of funds and path of funds
In an EB-5 investor petition, the investor must prove two things: that the source of funds is lawful (Lawful Source of Funds), and that the path of funds is complete (Path of Funds) — that is, the route the money took from when it was first lawfully obtained, through which accounts and by what means, until it reached the new commercial enterprise in the United States. Both are required: however clear the source, a gap anywhere along the way can lead to an RFE or even a denial.
For applicants from mainland China, for example, this is often the most time-consuming part of the whole case. Reasons include funds accumulated over many years, incomplete records from earlier years, frequent transfers among family members, and limits on individual foreign-exchange quotas. This article explains the evidence typically needed for each type of fund source and the key points in documenting the path.
Basic principles
- Traceable: Every dollar used for the investment must be traceable from its current account back to a lawful source.
- Documented: Rely mainly on objective documents such as bank statements, contracts, tax payment records and government registrations; personal statements can only supplement them.
- Amounts that match: Income, sale proceeds and gift amounts should match deposits and transfers one by one, with a reasonable explanation for any difference.
- Consistent: Names, dates and amounts in the evidence must not contradict the application forms, personal history or tax records.
- Explain both the investment and the fees: The source of the administrative fees that regional center projects charge separately should usually be explained as well.
Evidence needed for different fund sources
| Source of funds | Common evidence | Points to watch |
|---|---|---|
| Salary savings | Employment contract, employer income verification, bank statements showing salary payments, individual income tax payment records, social insurance contribution records | Income should be consistent with the position and years of work; transfers from the salary account to the investment account must connect |
| Sale of real estate | Purchase contract and payment records, property ownership certificate, sale contract, transfer registration, statements showing receipt of sale proceeds, records of related taxes and fees | You also need to explain where the money to buy the property originally came from; if there was a mortgage, provide the loan contract and repayment records |
| Business income | Business license, articles of association and proof of ownership, audit reports or financial statements, company tax records, dividend resolutions and individual tax payment records | The company's size and profits must support the dividend amounts; transfers directly from the company account to an individual or a third party need their nature explained |
| Gifts | Gift letter, proof of the relationship between donor and applicant, statements showing the gift transfer, and evidence of the donor's own source of funds | This amounts to a second source-of-funds case for the donor; the gift must be genuine and unconditional |
| Loans | Loan agreement, mortgage or security documents, title to and valuation of the collateral, statements showing loan disbursement, proof of the applicant's ability to repay | The investor must be personally liable and secure the loan with personal assets; the source of the collateral must also be explained; the loan cannot be secured by assets of the new commercial enterprise |
| Inheritance | Death certificate, will or notarized inheritance documents, proof of family relationship, records of receipt of the estate | How the decedent lawfully acquired the property also needs to be reasonably explained |
| Investment returns | Securities and fund account statements, trade confirmations, wealth-management product contracts and redemption records | The source of the principal must also be traced |
Most investors' funds come from a combination of sources. When preparing, start by drawing a "funds map": list each source, amount, date and the accounts it passed through, then gather evidence item by item against the map. Any gaps will be obvious.
Path of funds: documenting cross-border transfers
Sending money from China to the United States must comply with China's foreign-exchange regulations. Within the individual facilitation quota, each person may purchase a certain amount of foreign currency per year, but the stated purpose must be declared truthfully; the specific quota, restrictions on use and bank review requirements are governed by the current rules of the State Administration of Foreign Exchange and the bank handling the transaction.
Because each person's quota is limited, a common approach is for several family members to each purchase foreign currency and send it to the investor. If done lawfully and declared truthfully, USCIS will generally accept this arrangement, but the evidentiary burden is higher:
- Proof of each remitter's relationship to the investor;
- Statements showing the investor's transfer of RMB to each remitter (or an explanation of whose money each remitter used);
- Each remitter's foreign-exchange purchase application and outbound remittance records (such as wire transfer receipts);
- Records of receipt in the U.S. or overseas account, and of the final transfer to the new commercial enterprise or the project's escrow account;
- If the funds are a gift, evidence meeting the standard for gifts.
If the investor already holds lawful savings outside mainland China (for example, in Hong Kong or another country), the path is relatively simple, but you still need to explain the source of those overseas funds and how they were lawfully taken out of China in the first place.
Risks of third-party transfers
Exchanging money through unrelated third parties, underground banks or "mirror" swap arrangements is one of the most dangerous practices in an EB-5 case:
- Unfamiliar accounts with no connection to the investor appear in the path of funds, making it impossible to prove that these dollars came from the investor's RMB;
- These practices may violate China's foreign-exchange regulations, and USCIS may question the lawfulness of the funds on that basis;
- Once the source or path of funds is found not credible, it can affect not only that money but the applicant's overall credibility.
If transfers like these have happened in the past, don't try to hide them or create documents after the fact. Tell your lawyer truthfully, and let the lawyer assess whether those funds can be used or whether you need to switch to another source.
Tax records
Tax records are important evidence that income was lawful. The EB-5 Reform and Integrity Act of 2022 requires investors to provide individual income tax returns or tax payment records filed in any country for the past seven years (the prior regulation required five years; check the current USCIS form instructions). If the applicant has U.S. tax obligations, U.S. tax returns are also required.
- If income differs significantly from tax records, explain why — for example, some income was tax-exempt or tax was withheld by the employer;
- Business income should be corroborated by the company's tax records;
- Keep records of taxes and fees related to buying and selling property.
If you find that past tax filings were incomplete, consult a tax professional first before deciding how to handle it in your immigration petition.
Common reasons for RFEs
- A portion of the funds is supported only by a personal statement, with no bank statements or documentary evidence;
- The donor's source of funds isn't documented — only a gift letter was provided;
- Repeated transfers back and forth among family members' accounts that can't be matched one by one;
- The relationship between remitters and the investor, or who owns the funds, is unclear;
- A loan is secured by someone else's assets or by company assets, or the investor isn't liable for repayment;
- Income levels clearly don't match the amount of assets, with no explanation;
- Chinese documents lack complete English translations certified by the translator (see Translation requirements for immigration documents).
For how to respond after receiving an RFE, see What to do when you receive an RFE.
Common questions
There are no records of my income from more than ten years ago. What can I do?
You can try requesting historical statements from the bank, an income verification from your former employer, or social insurance or individual income tax records. If they truly can't be obtained, consider switching to another fund source with stronger evidence rather than trying to piece something together.
Can I use cash deposits?
Large cash deposits are hard to trace to a source and usually need to be supported by original records showing how the cash was obtained (such as books for business income). Where funds can be proven with bank transfers, use those first.
Can I invest my spouse's money?
Yes. For marital property or funds gifted by a spouse, provide proof of marriage and evidence of the lawful source from which the spouse obtained the funds.
After the money arrives in the U.S., can it sit in a personal account first?
Yes, but the whole process — from receipt from abroad to the final investment in the enterprise or escrow account — needs clear bank records, and you should avoid mixing the funds with other money in the meantime.
Are the source-of-funds requirements the same for EB-5 and E-2?
Both require a lawful source of funds, but EB-5 is reviewed by USCIS, and its requirements for a complete chain of evidence are usually stricter and more systematic. For E-2, see the E-2 hub.
Related reading
- EB-5 investor green card guide
- Translation requirements for immigration documents
- What to do when you receive an RFE
Want to check first whether your source of funds can be fully documented? Book a consultation, and we'll help you map your funds, identify gaps in the evidence and then plan the transfer path.
This article is general information and is not legal advice. Laws and policies may change; rely on the latest official information and on an attorney's advice for your specific situation.