E-2 Financial Evidence
E-2 Source of Funds: Legitimate Investment Capital
How an E-2 investor establishes the legitimate origin, possession, and control of capital used in the U.S. enterprise.
Direct answer
What the governing framework requires
E-2 investment capital may come from savings, gifts, inheritance, qualifying loans, sale proceeds, business income, or other legitimate sources. The current Foreign Affairs Manual does not require investment capital to originate outside the United States, but the source must not result from illicit activity and the investor must establish possession and control of the capital.
01 · Legal Standard
The FAM expressly identifies permissible E-2 funding sources
9 FAM 402.9-6(B) addresses the source, possession, and control of E-2 investment capital.
The FAM identifies savings, gifts, inheritance, contest winnings, qualifying loans, and other legitimate sources as possible sources of E-2 capital.
The legal issue is not whether the funds came from one preferred category. The record should establish that the source is legitimate and that the applicant possesses and controls the invested capital.
02 · Source Categories
Different sources require different evidence
Salary savings may require employment, income, tax, and bank accumulation records.
A property sale may require proof of ownership, sale documents, receipt of proceeds, and the subsequent transfer history.
A gift may require the gift transaction and, depending on the facts, evidence sufficient to show that the funds were legitimately available to the donor.
A loan requires separate analysis because the collateral structure affects whether the proceeds qualify as investment capital.
03 · Control
Legitimate money must also belong to or be controlled by the investor
Source and possession are related but distinct questions.
Money can have a legitimate origin while still creating an E-2 problem if another person retains ownership or effective control of the capital.
The transaction should therefore explain when and how the investor obtained possession and authority over the funds before placing them into the enterprise.
04 · Tracing
The transfer record should connect the source to the E-2 investment
The FAM does not create a separately named statutory path-of-funds element, but transfer records can be essential to proving source, possession, control, and commitment.
When money moves through several accounts, currencies, relatives, businesses, or intermediaries, the record should explain those movements rather than presenting only the final U.S. deposit.
05 · Separate Requirement
Lawful source does not by itself make the money a qualifying investment
After legitimate source and control are established, the capital must still satisfy the separate E-2 investment requirements.
The funds must be committed to the enterprise and subject to the required commercial risk.
Money can therefore be lawfully earned and fully documented but remain nonqualifying if it is still freely revocable.
06 · Evidence
The evidence should begin with the economic event that created the capital
A useful source analysis begins by identifying the original event that produced the investment funds and then follows the money forward.
- Employment and compensation records
- Tax records where applicable
- Bank statements
- Business financial records
- Sale agreements
- Gift or inheritance records
- Loan and collateral documents
- Transfer confirmations
- Foreign exchange evidence
Questions and answers
Frequently asked questions
Can E-2 money come from savings?
Yes. The current FAM expressly identifies savings as a possible legitimate source.
Can E-2 money be gifted?
Yes, potentially. Gifts are expressly recognized as a possible source, but the transaction and legitimacy of the funds should be documented.
Can inherited funds be used?
Yes. Inheritance can be a legitimate source of investment capital.
Do E-2 funds have to originate outside the United States?
No. The current FAM states that the source of the funds need not be outside the United States.
Are bank statements alone enough?
Not always. They may show balances and transfers without explaining how the capital was originally acquired.
Is source of funds the same as investment at risk?
No. Source addresses the origin and control of the capital. Investment at risk addresses commitment and commercial exposure.
Case-specific review
Trace the source before committing the investment
A review can identify missing source documents, ownership issues, unexplained deposits, and transfer gaps before filing.
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