EB-5 source of funds from inheritance and gifts: USCIS rules and the evidence required

EB-5 source of funds from inheritance and gifts is one of the common ways of proving source of funds for young investors who have not yet had time to accumulate enough capital from business or personal income. This route particularly suits children/grandchildren in successful Vietnamese business families, people who have inherited an estate from parents or relatives, or people who have been given assets as a gift for the purpose of immigrating.

However, it is also the form of SOF with the most complex proof requirements, because the funds do not come from the investor but from someone else. U.S. Citizenship and Immigration Services (USCIS) requires proof not only that the inheritance/gift transaction was lawful but also a trace of the origin of the original assets of the deceased or the donor. This article analyses these requirements in detail and explains how Vietnamese investors should organise their file.

Core requirements of EB-5 source of funds from inheritance and gifts

U.S. Citizenship and Immigration Services (USCIS)applies a two-layer principle to source of funds from inheritance and gifts. Both layers of proof must be completed at the same time.

Layer 1: Proving the inheritance/gift transaction was lawful

The first layer focuses on the lawfulness of the transfer of assets from the deceased/donor to the investor. Specific requirements:

• The transaction was carried out in accordance with Vietnamese law
• There are official legal documents (a will, a gift agreement)
• All tax obligations have been met (if any)
• There is evidence of the actual transfer (bank statements, handover records)

Layer 2: Proving the origin of the original assets of the deceased/donor

This is the hardest layer and the core difference between SOF from inheritance/gifts and other forms of SOF. USCIS does not simply accept “my grandparents left it to me” or “my parents gave it to me”; it requires proof of where those assets originally came from for the deceased/donor.

This requirement is clearly established in theMatter of Izummi precedent: EB-5 capital must be traced to a lawful origin, however many intermediate transfers it has passed through.

An overview of the EB-5 source of funds process is analysed in a separate article onEB-5 source and path of funds (SOF and POF). This article goes deeper into the specific case of inheritance and gifts from Vietnam.

EB-5 source of funds from inheritance: documents and evidence

Inheritance in the EB-5 context usually takes two forms: inheritance under a will (testate) and inheritance by law (intestate — when there is no will). Each form has its own document requirements.

Legal documents for the inheritance transaction

The core set of legal documents for every inheritance case:

• Death certificate of the deceased: issued by the commune/ward People’s Committee, notarised
• Will(if any): notarised at a Notary Office or made at a notary practice
• Declaration of receipt of inheritance: made at a notary practice in accordance with the Law on Notarisation
• Estate division agreement: an agreement between co-heirs (if there are several heirs)
• Declaration of receipt and division of the estate(if applicable): made at a notary practice
• Parents’ marriage certificate(if inheriting from a parent): proving the inheritance relationship
• The investor’s birth certificate: proving the relationship with the deceased

If the estate includes real estate, the following are also needed:

• Certificates of land use rights and home ownership (red book/pink book)
• The original purchase/transfer contract for the property
• Evidence of the origin of the land use (land allocation, recognition, purchase)

Evidence of the origin of the deceased’s original assets

This is the part investors often overlook but which matters most to USCIS. The documents to gather depend on the source of the deceased’s assets:

If the deceased was a business owner:

• Business registration and the business’s operating history
• Audited financial statements for several years before their death
• Corporate income tax and personal income tax records
• Evidence of asset accumulation over the years
• Business/share sale agreements (if applicable)

If the deceased was a salaried employee of an organisation:

• Employment contracts and employment history
• Payroll records and salary payment vouchers over the years
• Personal income tax returns
• Social insurance book
• Evidence of additional income (if any)

If the deceased owned real estate:

• The original purchase contract for the property
• Evidence of the source of the purchase funds at the time
• Savings books/account statements at the time of purchase

Where the deceased died many years ago, gathering documents becomes harder. USCIS recognises this difficulty and accepts some alternative evidence, such as:

• The deceased’s personal income tax returns
• Old bank records (if still available)
• Documents relating to the deceased’s profession/position
• Evidence of the deceased’s standing/success in business

Inheritance tax obligations in Vietnam

Under Vietnam’s Law on Personal Income Tax, some forms of inheritance are subject to personal income tax at a rate of 10%. However, many cases are exempt:

• Inheritance between spouses
• Inheritance between parents and children (including adopted children)
• Inheritance between grandparents and grandchildren
• Inheritance between siblings

For exempt cases, the EB-5 file should include the legal basis for the exemption. For taxable cases, the tax payment receipt is important evidence for USCIS.

EB-5 source of funds from gifts: documents and evidence

A gift differs from an inheritance in that the transaction takes place while both the donor and the recipient are alive. It is a common route for young investors whose parents provide the capital forvisa EB-5.

Legal documents for the gift transaction

The core set of documents for a gift transaction:

• Asset gift agreement: must be notarised at a notary practice in accordance with the Law on Notarisation
• Gift letter: a supplementary document written by the donor describing the purpose of the gift (EB-5 investment) and confirming no repayment is required
• Parents’ marriage certificate(if received from parents): proving the relationship
• The investor’s birth certificate: proving the relationship
• Donor’s account statements: showing the transfer of money to the recipient
• Recipient’s account statements: showing receipt of the money

The gift letter is a very important document. A standard gift letter should include:

• The full names of the donor and recipient and their relationship
• The amount and date of the gift
• The purpose of the gift (EB-5 investment in the United States)
• Confirmation that no repayment is expected
• The donor’s signature, notarised

If repayment is required, USCIS will treat the transaction as a loan rather than a gift, and it must meet stricter collateral requirements.

Evidence of the origin of the donor’s original assets

As with inheritance, USCIS requires proof of the origin of the donor’s original assets. The requirement is even stricter because the donor is alive and can provide full documentation.

Where the donor is a business-owner parent:

• Business registration and the full history of the business
• Audited financial statements for the last 5–10 years
• Corporate income tax and personal income tax records
• Documents on the distribution of profits from the business to the individual
• The donor’s personal account statements over many years
• Evidence of asset accumulation over time

Where the donor is a salaried employee:

• Current employment contract and employment history
• Payroll records over many years
• Personal income tax returns and payment receipts
• Social insurance book
• Salary account statements and savings books

Where the donor has income from real estate:

• Property lease agreements
• Rental income tax returns
• Evidence of the source of funds used to buy the original property
• Property ownership history

Gift tax obligations in Vietnam

Under Vietnam’s Law on Personal Income Tax, the rules on gift tax are similar to those for inheritance:

• Gifts between family members (spouses, parents–children, grandparents–grandchildren, siblings) are exempt from personal income tax
• Gifts from people outside the family, or between family members not in the categories above, may be taxed at 10%

For tax-exempt gifts, the file still needs to show the legal basis for the exemption. For taxable gifts, the tax payment receipt is core evidence.

Path of funds for source of funds from inheritance and gifts

The path of funds for source of funds from inheritance and gifts involves more steps than for funds from the investor themselves. The basic principle: every dollar ultimately invested in EB-5 must be traced to a lawful origin.

For inheritance

A typical path of funds structure:

1. Step 1: The origin of the deceased’s original assets (business, salary, real estate…)
2. Step 2: The deceased accumulated and owned the assets before their death
3. Step 3: The deceased died and the estate was declared
4. Step 4: The declaration of receipt and division of the estate (if there are several heirs)
5. Step 5: The assets were formally transferred to the investor
6. Step 6: The investor transferred the capital to the EB-5 investment account

Each step needs specific supporting documents.

For gifts

A typical path of funds structure:

1. Step 1: The origin of the donor’s original assets
2. Step 2: The donor accumulated and owned the assets
3. Step 3: The gift agreement was notarised and tax paid (if applicable)
4. Step 4: The donor transferred the money to the investor
5. Step 5: The investor transferred the capital to the EB-5 investment account

In both cases, USCIS pays particular attention to the time gap between the inheritance/gift transaction and the EB-5 investment. A gap that is too short (under 30 days) or too long (over 5 years) can both raise questions from USCIS.

Common issues with source of funds from inheritance and gifts

Source of funds files from inheritance and gifts for Vietnamese investors often run into some typical problems. Understanding them in advance helps prepare better.

Issue 1: The deceased died many years ago and documents are missing

When the deceased died 10–20 years earlier, gathering documents on the origin of the original assets becomes very difficult. Old business and tax records may no longer be kept.

Solution: gather every remaining document and combine it with indirect evidence (public records of the deceased’s career, press articles, documents from colleagues/witnesses). USCIS usually applies a more flexible standard in these cases, but it must be clearly explained in the SOF Statement.

Issue 2: Gifts from several family members

Some investors receive gifts from several family members (both parents, siblings). Each source of gift must have its own complete set of SOF documents.

Solution: organise a separate file for each donor, each with their own gift letter, gift agreement and evidence of the origin of their original assets.

Issue 3: The gift is made just before the EB-5 filing

A very short time gap between the gift and the EB-5 investment may lead USCIS to question whether the gift is genuine.

Solution: where possible, make the gift 6–12 months before filing the I-526E. If that is not possible, clearly explain the reason for the timing and attach evidence that the gift had long been planned.

Issue 4: The donor has also transferred money abroad

A special case: parents in Vietnam gift assets that are already abroad (because the donor transferred them abroad earlier for another purpose). In this case, USCIS also requires documents showing the donor’s lawful transfer of the money abroad.

Solution: gather the donor’s international transfer documents — transfer declarations, bank confirmations, the purpose of the transfer. Make sure the donor’s transfer also complied with Vietnamese and US law.

Issue 5: Inherited assets have not been formally divided

In some cases the deceased has died but the estate has not yet been formally declared and divided in Vietnam. The investor cannot use this share of the estate for EB-5 until the procedure is complete.

Solution: complete the full procedure for declaring and dividing the estate at a notary practice before filing the I-526E. This process can take 3–6 months in Vietnam.

Foreign exchange rules when transferring capital from an inheritance/gift

As with SOF from business, transferring capital from an inheritance or gift abroad for EB-5 investment must comply with Vietnam’s foreign exchange law. Under State Bank rules, transferring money abroad for immigration purposes must be done through a bank licensed for foreign exchange transactions, with documents proving the origin and purpose.

For capital from an inheritance, the person transferring the money is the investor, whose ownership of the inherited assets has been recognised by law. For capital from a gift, the person transferring the money is also the investor, once the assets have been lawfully gifted.

USCIS has noted in recent notices that some informal methods of transferring capital from Vietnam may put EB-5 petitions at risk. Strict compliance with Vietnamese foreign exchange law when transferring EB-5 capital is therefore key.

Organising a source of funds file from inheritance and gifts

A standard file structure for source of funds from inheritance and gifts is usually organised as follows:

• Tab 1: SOF Statement prepared by the immigration lawyer, summarising the structure of the funds
• Tab 2: The investor’s personal documents
• Tab 3: Legal documents for the inheritance or gift transaction (will, gift agreement, gift letter)
• Tab 4: Documents proving the relationship between the investor and the deceased/donor
• Tab 5: Evidence of the origin of the deceased’s/donor’s original assets
• Tab 6: Tax records of the deceased/donor (if any)
• Tab 7: Path of funds — evidence of transfers between the parties
• Tab 8: International transfer documents from Vietnam to the United States
• Tab 9: Evidence of the capital transfer into the EB-5 project

All Vietnamese-language documents must have certified English translations. The whole file is usually 800–2,500 pages thick, especially when many years of historical documents about the deceased/donor are needed.

Conclusion

EB-5 source of funds from inheritance and gifts is a suitable way of proving source of funds for young investors who have not yet had time to accumulate enough capital from business or personal income. However, it is also the form of SOF with the strictest proof requirements because of the two-layer principle: both the lawfulness of the inheritance/gift transaction and the origin of the deceased’s/donor’s original assets must be proven.

For Vietnamese investors, early preparation and the support of an immigration lawyer experienced with Vietnamese cases are decisive. Combining a well-organised SOF file with the right EB-5 project — together with anBusiness Plan EB-5of high quality and a fairEB-5 economic reportthat is reliable — is the foundation for a successful I-526E petition, taking investors to aUS permanent resident cardon their EB-5 journey.