What Is a Targeted Employment Area, and Why Should You Invest in an EB-5 Project in a TEA?

A foreign national and their immediate family members can receive U.S. permanent resident status in exchange for making a qualifying EB-5 investment. Any EB-5 project can result in a green card, as all successful EB-5 investments grant permanent resident status to the investor. However, some projects may make an investor’s journey more straightforward and attainable. EB-5 projects in targeted employment areas (TEAs) fall into this category.

TEAs are geographic areas—typically an individual census tract or several census tracts—that are considered most in need of job creation and economic stimulation. United States Citizenship and Immigration Services (USCIS) defines TEAs based on their rural location or high unemployment. To incentivize investment in these areas, USCIS cuts the minimum investment amount in half for EB-5 investors who invest in TEA projects.

How Are TEAs Defined?

Rural TEAs must have fewer than 20,000 inhabitants. These areas cannot fall within a metropolitan statistical area (MSA) as defined by the Office of Management and Budget (OMB). Additionally, a rural TEA cannot directly border a town or city with a population above 20,000. Population statistics used to prove that an area is a TEA must be taken from the most recent U.S. census.

Most TEAs, however, are designated based on high unemployment. A high-unemployment TEA must be in a non-rural area with an unemployment rate at or above 150% of the national average.

Why Should EB-5 Investors Choose Projects in TEAs?

The most significant hurdle for EB-5 investors is typically the price—foreign nationals need to invest at least $1,000,000 for a non-TEA project. Immigration attorney fees and other related expenses are not included in this total. For this reason, many investors find it challenging, or even downright impossible, to come up with the minimum required investment amount. However, investing in a project in a TEA halves the minimum required investment amount to $500,000, making an EB-5 investment significantly more affordable.

Besides this clear advantage, investing in TEA projects also ensures that EB-5 capital will be used in the regions of the United States that need it the most. For example, many small businesses in rural areas or regions with high unemployment have received invaluable support from EB-5 investment funding. Thus, the EB5 investment program encourages immigration while helping U.S. businesses thrive. This assistance is particularly valuable during the financial hardships caused by the COVID-19 pandemic.