EB-5 Investment Immigration: Third-Party Foreign Exchange Transactions Have Become a Showstopper for Investment Immigration Applications!
EB-5 Investment Immigration: Third-Party Foreign Exchange Transactions Have Become a Showstopper for Investment Immigration Applications!
Attorneys:Attorney Jeff Zhengquan Xie,Attorney Jiarui Yin,Attorney Qian Zhao,Attorney Haochun Ling
Recently, U.S. Citizenship and Immigration Services (USCIS) has denied a number of long-pending investment immigration applications over third-party foreign exchange transaction issues. Worse still, this ground for denial has even been extended to applications for removing conditions on permanent residency—in other words, when adjudicating Form I-829, USCIS has actually reopened the review of investment fund sources and rejected investors’ applications for conditional green card conversion on the basis of problematic third-party foreign exchange transactions.
To make matters worse, an investor whose EB-5 application was denied due to third-party foreign exchange transactions sued USCIS in federal court. The federal judge ruled against the investor, affirming that USCIS has the authority to review the source of funds of third-party foreign exchange providers.
It is evident that third-party foreign exchange transactions have become a powerful weapon wielded by USCIS adjudicators when reviewing investment immigration applications!
What Are Third-Party Foreign Exchange Transactions?
Some countries impose foreign exchange controls, either prohibiting their citizens from freely transferring foreign currency abroad or capping the amount of foreign currency that can be remitted out of the country. For individuals from these countries seeking to apply for U.S. investment immigration, they must find ways to convert their investment capital into U.S. dollars and remit the funds to a U.S. account.
One common method is for the investor or their family members to enlist the help of a third party. The investor or their family transfers a specified amount of local currency to the third party, who then remits an equivalent sum in U.S. dollars to a U.S. bank account. The EB-5 investor subsequently transfers the received U.S. dollar funds into the escrow account designated by the EB-5 investment project. This process is known as a third-party foreign exchange transaction.
In the past, USCIS did not scrutinize third-party foreign exchange transactions in EB-5 applications and approved many such cases. However, the U.S. government has likely uncovered instances where the foreign currency used in third-party transactions either belonged to the investor themselves or was derived from questionable sources.
As a result, when adjudicating EB-5 applications (both Form I-526 and Form I-829), USCIS now reviews not only the source of the investor’s capital but also the source of funds provided by third-party foreign exchange providers. This policy shift has undoubtedly introduced significant uncertainty for investors who secured EB-5 approvals through third-party foreign exchange transactions in previous years.
What Countermeasures Can EB-5 Investors Take?
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For Pending I-526/I-829 Applications
If your Form I-526 and/or Form I-829 application is currently pending with USCIS, it is highly likely that you and your representative attorney will receive a Request for Evidence (RFE) asking for explanations and supporting documents to verify the source of funds involved in third-party foreign exchange transactions. We recommend carefully reviewing the details of your case after receiving an RFE, collecting all relevant evidence related to the third-party transaction, and submitting comprehensive documentation to prove that the source of the third-party funds is clear and legitimate.
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For Prospective New-Policy I-526E Applicants
If you plan to file a new-policy Form I-526E application, we advise meticulously preparing your investment fund source documentation and formulating a clear strategy for foreign currency remittance. The goal is to minimize the risk of receiving an RFE and, at the very least, leave room for remediation if an RFE is issued.
In today’s landscape where EB-5 projects and application procedures have become increasingly sophisticated, proving the source of investment funds—including the legitimacy of cross-border fund transfers—has emerged as one of the most technically demanding aspects of an EB-5 application. Therefore, we recommend that all readers considering EB-5 investment immigration prioritize preparing their fund source documentation first. Only after this critical step is completed should you proceed to select a suitable EB-5 investment project. A well-structured and thoroughly documented fund source plan can be adapted to any EB-5 project of your choice.
Since filing our first EB-5 application in early 2007, our firm has amassed extensive experience in handling EB-5 cases. We have established a comprehensive and rigorous workflow for verifying fund sources and can design tailored documentation strategies for various types of fund origins.
As a token of appreciation for readers of our column, we are willing to share the practices currently adopted by our clients for cross-border fund remittance:
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Utilize the "Ant-Moving" Method for Foreign Currency Remittance
Whenever possible, enlist the help of friends and family members (third parties) to remit funds to your overseas account using their legally permitted individual foreign exchange quotas. While this method is more time-consuming, it is compliant with the foreign exchange regulations of both the sending and receiving countries and is recognized by USCIS—making it a safe and reliable approach.
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If Third-Party Foreign Exchange Transactions Are Unavoidable
If the "ant-moving" method is not feasible and third-party foreign exchange transactions are necessary:
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First priority: Seek assistance from licensed foreign exchange service providers that hold official authorization for foreign exchange operations.
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If private third parties are the only option: Ensure that the third-party provider is willing to provide documentation to verify the source of the funds they use for the exchange. If a potential third party refuses or is unable to provide such proof, abandon that provider and find another third party who is willing and able to substantiate the legitimacy of their funds.
The above overview is prepared by XIE LAW OFFICES,LLC. to provide legal information to the Chinese community. It is primarily for academic discussion purposes and does not constitute legal advice on specific cases. If you already have legal representation, please consult your own attorney, who is familiar with the details of your case. Clients of Xie & Associates Law Firm, as well as readers who have not yet retained legal counsel, may contact Attorney Xie for specific legal questions. If you wish to reprint this document, please do so in full without any deletions, and clearly indicate the source.
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