Advantages of TEA Approval

Projects located within targeted employment areas (TEAs) offer a significant advantage to investors: the EB-5 investment requirement drops from $1,000,000 to $500,000, posing substantially less risk. For regional centers, this lower amount opens the door to a wider range of investors and can act as an attractive selling point. A TEA is either a rural area or an area experiencing significantly high unemployment, proof of which must be provided with the I-526 petition so investors can qualify at the lower amount.

TEA Designation Criteria

For a project to take advantage of a TEA designation, it must meet one of the following two criteria:

1. It must be located in a rural area. According to United States Citizenship and Immigration Services (USCIS), a project meets this requirement if it is not within a metropolitan statistical area (MSA), which is a geographical area defined by the Office of Management and Budget as having a population of 50,000 or more. The project also must not be located on the outskirts of an urban core with a population of 20,000 or more.
2. It must be located in an area with high unemployment. For this designation, unemployment in the area must be at least 150% the U.S. national average. For example, for a national average unemployment rate of 5.32%, the minimum qualifying threshold for EB-5 projects in high-unemployment areas is 7.98%.

State agencies are responsible for TEA designation, so to obtain proof that a project site is located within a TEA, EB-5 investors or developers must request a TEA designation letter from the relevant state agency.

How to Request TEA Designation

To see whether a project site qualifies as a TEA, use the free EB5AN TEA map. A project site in a rural area automatically qualifies as a TEA, as does a project site in a census tract with an unemployment rate of at least 150% the national average. If the project site is in a census tract that does not qualify as a TEA on its own, you can combine surrounding, contiguous census tracts to determine whether a combination of census tracts qualifies as a TEA.

Although some states, such as Florida and Pennsylvania, have flexible requirements when it comes to combining census tracts, others limit the number of census tracts that can be combined to form a TEA. For example, California allows a maximum of 12 tracts to be combined to form a TEA. Ensure that you are aware of any such limitations while researching whether the project site qualifies as a TEA.

Once you have determined whether the project site qualifies as a TEA, request TEA designation from the state agency that covers the project site. To support your request, submit a report that shows the calculations and analysis used to determine TEA qualification.

The Importance of TEA Designation for Regional Centers

The project area must qualify as a TEA when the investor makes their investment or files their I-526 petition. Because employment rates and population levels change over time, regional centers must confirm that project areas still qualify as TEAs before taking on new investors, even if earlier groups of investors qualified for the lower investment amounts.

TEA designation can go a long way in attracting investors to regional center EB-5 projects. The lower required amount of $500,000, meant to encourage investment in areas with the most urgent need for jobs, allows investors to receive permanent residence with less risk. Most regional center projects are thus located in TEAs, and by following the tips outlined above, regional centers can take advantage of this significant opportunity.

Order a TEA Report to Support Your TEA Designation Request

Our TEA report provides the relevant state agency with a detailed, easy-to-follow analysis of the census tract combination methodology and calculation needed to meet the USCIS unemployment EB-5 TEA requirements.