Free EB-5 Evaluation Targeted Employment Area (TEA) Analysis

The investment threshold of the EB-5 program is dependent on the location of the project. For projects located within what are known as targeted employment areas (TEAs), the threshold is currently $900,000. Otherwise, the threshold is $1,800,000.

Targeted Employment Area (TEA) Basics

TEA designation is issued by United States Citizenship and Immigration Services (USCIS) and can be based upon either population or unemployment rate.

Areas of high unemployment qualify as TEAs if their rate of unemployment is 150% that of the national average. This rate changes every year, but for 2018, the national rate of unemployment was 3.9%, meaning an area qualifies as a TEA if it has an unemployment rate of at least 5.85%.

Rural areas are those with low populations according to census data—they cannot be located in municipalities with populations greater than 20,000 and must not be in metropolitan statistical areas (MSAs). However, high unemployment TEAs can fall within cities or towns with populations exceeding 20,000 people and that are located outside MSAs.

Because the data is subject to change, TEA designation must be refreshed periodically, and there is no guarantee an area previously designated TEA will remain one.

Determining if an Area Can Qualify as a TEA

While it is possible that an entire city or county could have an unemployment rate that qualifies it for TEA designation, most TEAs are determined by census tract. The U.S. Bureau of Labor Statistics (BLS) does not, however, publish employment data by census tract.

Before the November 21, 2019, rule change, TEAs were designated at the state level, and several contiguous census tracts could be combined to create a TEA with a high average unemployment rate. As of the 2019 rule change, only the tract or tracts in which the new commercial enterprise will be doing business and the directly adjacent census tracts are considered.

Combining census tracts relies on the census-share methodology, which involves using American Community Survey (ACS) data to consider the unemployment rate of two or more contiguous census tracts in a given county or group of counties. This data is used in conjunction with current BLS data for the appropriate county or counties to determine if the census tracts in question qualify as a TEA on the basis of high unemployment.