For an EB-5 project to qualify for the lower investment amount of $900,000, the new commercial enterprise (NCE) is required to principally do business within the geographic boundaries of its targeted employment area (TEA). One element of the “principally doing business” requirement is the location of employees. If the NCE’s principal place of business is in a TEA and the employees are hired and paid from within the TEA, performing work outside the TEA may be accepted by United States Citizenship and Immigration Services (USCIS). As each case is different, EB-5 investors should consult with an experienced immigration attorney to make sure that their projects comply with the EB-5 program’s requirements regarding TEA status.
Since investing in a TEA EB-5 project halves the standard investment threshold of $1,800,000, most foreign nationals planning an EB-5 investment look for projects located in TEAs. TEAs qualify as such if they are rural or have high unemployment. The criteria for designating rural TEAs is comparatively straightforward: these TEAs must possess a population of less than 20,000 residents and be located outside a metropolitan statistical area (MSA) designated by the Office of Management and Budget. The population statistics provided in the latest 10-year national census can be used to justify rural TEA designation.
High-unemployment TEAs must exhibit an unemployment rate at least 150% greater than the national average, be located within an MSA, and have a population greater than 20,000. EB-5 investors typically use data from the American Community Survey (ACS) and the Bureau of Labor Statistics (BLS) to prove that their projects are located in high-unemployment TEAs.
Once investors have gathered the necessary statistics, they must submit them to USCIS with Form I-526, Immigrant Petition by Alien Investor. Compiling this data can be complex and time-consuming, but USCIS-approved regional centers typically provide their investors with the information needed to prove TEA status.