This question is for a friend of mine... my friend lives outside US and only has a US tourist visa. He owns several properties in US and intends to sell in property to fund the E-2 business (we're talking about $100k). Assuming he pays all necessary taxes, are there any other issues related to the legal source of the funds? (I guess my main concern is that he does not have a work visa and he might have a gain on the value of the property)... He intends to hire an attorney one he clears this issue... Thank you kindly!sorry if I was not clear - the E-2 investor is not in US!
Funds tracing is becoming a larger focus in the E-2 arena. Your friend will need to trace for USCIS that the funds came from the individual investor to the investment. Any and all parts of the transaction will need to be shown. This becomes more arduous when there are several layers of transactions making up the investment. The other part we will need to demonstrate is that the capital came from lawful means.
In tracing lawful source of funds, the primary focus is on the person who originally obtained the funds. If the investor obtained all of the funds on her own, this an easier issue. If the funds were the result of a gift, the lawful source of the gift must be documented. A loan, the lawful source of the lender’s funds must be documented, as well as the lawful source of any collateral put up by the investor for the loan. If the source of funds is an inheritance, the decedent’s source of funds could be the issue.
Often in tracing lawful source of funds, we must make a judgment regarding how far back to go with the documentation. If the source of funds is a real estate transaction that resulted in substantial proceeds from the sale of real estate, the documentation of the real estate sale will be required. If the real estate was purchased within the last several years, we will need to trace the money to purchase the real estate that has now been sold. We do not have to prove where the investor obtained every dollar that he or she now has or ever had.
I suggest that your friend first retain an experienced and qualified attorney to begin the process of assessing the case for E-2 status. The first issue is the source of the funds prior to investing in U.S. real estate. Your friend will need to document the lawful source of those funds that were previously invested. Of course, additional analysis will need to be made to determine if the E-2 is a viable option.
Your friend who is on a US tourist visa may be on visa-waiver program (VWP). Countries participating in visa-program are INeligible for change of nonimmigrant status from VWP to E-2 visa. They will have to depart U.S. and apply for E-2 in the U.S. consulate of their home country. All of this is based on assumption that your friend is a national of a E-1/E-2 treaty nation.
In regards to the legal source of funds, I have processed numerous E-2 visas for other treaty investors and this matter is best addressed in private and not on a public Q&A forum.
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Apparently your "friend" seems to have a good "friend" in you..
First of all, proving the source of funds on an E-2 is hardly ever required by a US consulate abroad (at least not by those I have been dealing with for the last 21 years..). Proving a the "lawful source of funds" is a phenomenon only attributable to our friendly USCIS here in the US, a bad habit they seem to have acquired from the EB-5 category.. I cannot think of anyone foolish enough or so misinformed as to want to apply for a 24 month E-2 "status" (not a visa!) with CIS, rather than apply for an E-2 visa at the US consulate of one's home country, unless, of course you are from Ukraine or one of the "..stans" of the ex-USSR or some very tough "high fraud post" of a consulate abroad.. Thus, "proving lawful source of funds will not be required at a consulate abroad.
What your "friend" needs to do is "transfer" or repatriate the proceeds of the sale of one of his properties, have it sit for a few weeks in his foreign bank account, then use those funds to finance his contemplated E-2 venture.
Kindly be advised that the answer above is only general in nature cannot be construed as legal advice, given that not enough facts are known. It is your responsibility to retain a lawyer to analyze the facts specific to your particular situation in order to give you specific advice. Specific answers will require cognizance of all pertinent facts about your case. Any answers offered on Avvo are of a general nature only, and are not meant to create an attorney-client relationship.
He needs to demonstrate they are his funds which will be at risk in the business.
Attorney Robert Brown's (former INS Director, 1972-99) reply to your question is general in nature, and does not constitute legal advice as all facts are known to him. For specific advice or representation you should retain an attorney experienced in immigration law. Mr. Brown's reply on AVVO does not create an attorney/client relationship not constitute legal advice.
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