Rural TEAs Now Offer More Incentives to Projects And EB-5 Investors

The EB-5 visa program is increasingly popular with foreign investors seeking a pathway to permanent residency in the United States. While the program offers numerous benefits, such as the ability to live and work in the U.S., the investment minimum can be a barrier for potential investors.

With the EB-5 Reform and Integrity Act of 2022, however, EB-5 investment projects in rural targeted employment areas (TEAs) offer more incentives. Under the new reform, rural TEAs make a strong case to invest in the EB-5 program.

Taking the Rural TEA Route

TEAs are areas designated by the DHS as rural or having high unemployment rates. One of the key considerations for EB-5 investors is whether to invest in a TEA or non-TEA project.

Investment in TEAs requires a lower minimum amount of $800,000 compared to non-TEAs, which requires a minimum capital investment of $1,050,000.

This significant difference in the financial responsibility makes TEA projects a more financially accessible option for potential EB-5 investors. Thus, the government motivates investment in areas with lower economic activity, hoping to bring more employment and business to certain areas.

Investing specifically in rural areas has its own benefits for EB-5 projects:

  • Lower cost of living because of the rural location
  • A specialized labor force looking for employment opportunities
  • Resources specific to rural zones
  • Less expensive operating costs for businesses

The Reform and Integrity Act has also amended the TEA designation process to ensure that only areas with high unemployment rates or low population densities will be accepted.

Besides the lower investment threshold and unique resources, rural TEAs specifically stand out for entrepreneurs thanks to the new set-aside visa categories and priority processing of Form I-526E.

Why Invest in a Rural EB-5 Project?

With the Reform and Integrity Act, Congress set aside an allotment of reserved visas for investors in TEA projects.

Since there are only so many EB-5 visas available each year, this is a reason for foreign nationals from China and India (which have a backlog of EB-5 visa applications) to choose rural TEA projects.

As it stands, of those reserved visas, 20% are for projects in rural areas, 10% for non-rural TEAs, and 2% for non-TEA EB-5 projects.

Countries such as China and India have large lines of people wanting to emigrate to the United States through the EB-5 program. Having a path to bypass the staggering wait times can help investors’ immigration plans and cut through the backlog.

Going forward, any unused reserved visas will be added to the following year’s number. While the EB-5 program has grown overall, these new visas have drawn back interest from countries whose participation has fallen—namely, China.

Picking the Right Rural TEA Project

Investors need to ensure their chosen area is a qualified rural TEA to receive the benefits. To have a clear picture of whether the area qualifies as a TEA, investors should check with their EB-5 regional center.

The regional centers, located throughout the United States, provide assistance with the EB-5 program and the application process, while working with investors for the best possible outcomes.

Foreign nationals should explore how investing in these rural designated areas can help unlock the full benefits of the EB-5 program. Meanwhile, Americans will have more job opportunities in areas that need it most.

From faster processing times to higher returns on investment, investing in a rural TEA could be the key to achieving a successful EB-5 venture.

For more information, schedule a free consultation with EB5AN.