E-2 Source and Path of Funds Evidence

Depending on the facts, the source may be salary savings, business income, sale proceeds, gifts, inheritance, loans, property sales, or other legitimate capital.

Current 9 FAM 402.9 states that E-2 investment funds may come from legitimate sources such as savings, gifts, inheritance, contest winnings, qualifying loans, or other lawful capital. The source may be inside or outside the United States, but it may not result from illicit activity. The evidence should identify the actual source used in the case and support it with records appropriate to that source, such as employment and bank records, sale documents, gift evidence, probate or inheritance records, business distributions, or loan documents. The purpose is to show how the investor lawfully obtained the capital later committed to the enterprise.

Bank records, ownership records, gift documents, loan agreements, sale documents, and account histories can establish the investor's control of the funds.

The investor must also demonstrate possession and control of the invested capital. That inquiry can be straightforward when funds accumulated in the investor's own account, but additional documentation may be needed when money originated with a spouse, family member, business, trust, lender, or other third party. Gift documents, corporate resolutions, distribution records, loan agreements, ownership evidence, and account statements can explain how the investor became entitled to use the capital. The documentary record should match the legal and economic reality of the transfer. Merely routing money through the investor's account does not, by itself, explain who owned or controlled the funds beforehand.

Wire confirmations and account statements can show movement from the source account through intermediate accounts, currency exchanges, escrow, sellers, landlords, vendors, or the U.S. enterprise.

The path of funds is the documentary link between the lawful source and the capital actually invested in the E-2 enterprise. Bank statements and transfer records can show material movements from the original account through intermediate accounts, currency conversion, escrow, the seller, vendors, or the US business. Not every case requires the same number of records, and the FAM does not prescribe one tracing format. The practical goal is to avoid unexplained gaps in material transfers. A clear chronology helps demonstrate that the capital supported by the source evidence is the same capital ultimately placed under the investor's control and committed to the qualifying enterprise.

Where currency controls, exchangers, relatives, companies, or other intermediaries are used, the record should explain who participated, why the structure was used, and how both sides of the transfer connect.

Third-party transfers deserve a clear explanation when they are material to the investment trail. Currency restrictions, family assistance, remittance services, exchangers, affiliated companies, or other intermediaries may create a sequence in which the investor pays one person or entity and corresponding funds are delivered from another source. The filing should identify the participants, amounts, dates, purpose, and available records linking the two sides of the transaction. Evidence may include transfer confirmations, exchange receipts, contracts, declarations, and bank statements. The objective is not to characterize every intermediary arrangement as improper, but to make the path understandable and consistent with the claimed lawful source and investor control.

After tracing money into the United States or business account, identify the qualifying expenditures, purchase payments, escrow, inventory, equipment, lease costs, or other committed capital.

After establishing the source and transfer path, the record should connect the capital to the actual E-2 investment. Funds arriving in a US account are not automatically invested merely because the account belongs to the enterprise. The filing should identify the purchase payments, equipment, inventory, leases, contracts, escrow, buildout, professional costs, or other qualifying commitments funded by the traced capital. This final step links source and possession evidence to the separate E-2 requirements of commercial risk and irrevocable commitment. It also helps prevent the source-of-funds presentation from ending before the documents show what happened to the money after it reached the investor or business.

A source-and-path chart can identify the date, account, transferor, transferee, amount, currency, conversion, purpose, and supporting exhibit for each material movement.

A chronological source and path table can make a complex record easier to review. Each material movement may be listed by date, transferor, transferee, originating account, destination account, amount, currency, conversion, purpose, and exhibit reference. The table should be based on the underlying records and should not fill documentary gaps with unsupported assumptions. Where a statement is unavailable, the filing can identify that limitation and provide the strongest available corroboration. Organizing the evidence this way also helps reveal inconsistent dates, unexplained deposits, duplicate counting, or transfers that never reached the enterprise, allowing those issues to be addressed before the E-2 application is submitted.