To qualify as being located in a targeted employment area (TEA), an EB-5 project must possess United States Citizenship and Immigration Services (USCIS) TEA designation. An EB-5 investor must prove that the EB-5 project had USCIS TEA designation when their EB-5 investment was made or when their I-526 petition was submitted. Most USCIS-approved regional center projects are located in TEAs.
TEAs are either high-unemployment or rural areas. To qualify as a high-unemployment TEA, an area must possess an unemployment rate at least 150% higher than the national average. For instance, if the national unemployment rate were 5.32%, an area would need at least 7.98% unemployment to qualify as a TEA. Moreover, high-unemployment TEAs must be located in urban areas—that is, cities or towns with a population greater than 20,000 or metropolitan statistical areas (MSAs) designated by the Office of Management and Budget.
On the other hand, rural TEAs must be located outside MSAs and cannot be on the borders of a city or town with a population greater than 20,000. This data must agree with the latest 10-year U.S. Census.
The Department of Homeland Security (DHS) is responsible for designating TEAs, and EB-5 investors must submit copious evidence proving that their projects are indeed located in TEAs. It is typically more challenging to provide evidence for high-unemployment TEAs than for rural TEAs. Many investors choose to use unemployment statistics taken from the American Community Survey (ACS) or the Bureau of Labor Statistics (BLS). Data from both sources can be combined into an estimated one-year unemployment rate.
Since the minimum investment amount for non-TEA projects is $1,800,000, most investors look for projects located in TEAs. This way, they can qualify to invest at the lowered amount of $900,000. Of course, EB-5 investors will also have to pay their immigration counsel and regional center operators. Proving that the invested funds were sourced lawfully may also require some expenses, so TEA projects remain widely popular.