By investing in job-creating projects, foreign nationals can get a U.S. Green Card through the EB-5 Immigrant Investor Program. Rural and high-unemployment targeted employment area (TEA) projects are two of the more popular options for EB-5 investors. This is because the EB-5 Reform and Integrity Act of 2022 (RIA) introduced visa set-asides for rural and high-unemployment (urban) TEA projects, as well as select infrastructure projects. This offered investors reserved visa quotas that currently have no backlogs.
This article will discuss how EB-5 set-asides work, the differences between rural and high-unemployment projects, and what investors should consider when choosing a project.
The Benefits of EB-5 Set-Aside Visas
Understanding Rural and High-Unemployment Areas
Investing in Rural TEA Projects
Investing in High-Unemployment TEA Projects
Investing in Infrastructure Projects
Why an Informed Decision Matters
The Benefits of EB-5 Set-Aside Visas
When Congress reauthorized the EB-5 Regional Center Program in 2022, it introduced three categories of visa set-asides: 20% for investors in rural projects, 10% for investors in high-unemployment area projects, and 2% for investors in infrastructure projects.
These set-aside categories offer reserved visa quotas for investors, with the additional benefit of priority processing for rural TEA investors. This means that EB-5 petitions for rural projects are processed at a much faster pace.
For investors from countries facing longer visa wait times, such as India and China, selecting rural projects is a good strategy to avoid these delays due to the availability of reserved visas and faster petition processing.
Aside from the set-aside quota benefits, rural and urban TEAs qualify for the reduced investment amount of $800,000 as opposed to the regular minimum capital investment of $1,050,000.
Understanding Rural and High-Unemployment Areas
Before making an investment decision, it’s important to understand how the U.S. law defines rural and high-unemployment areas.
Rural Areas
To be designated as a rural area, a location must have a population of no more than 20,000, must not be adjacent to a city or town with 20,000 or more residents, and must fall outside of a metropolitan statistical area as defined by the most recent 10-year U.S. census.
High-Unemployment Areas
A high-unemployment TEA is defined as an area where the average unemployment rate is 150% higher than the national average at the time the investor submits their EB-5 petition.
Investing in Rural TEA Projects
Investing in a rural TEA project offers significant advantages, making it an ideal choice for foreign investors looking to speed up their immigration process.
Priority Processing
As mentioned above, rural EB-5 investments are eligible for priority processing of Form I-526E by USCIS. Under the RIA, compared to other EB-5 investment categories, rural TEA petitions are processed first, allowing investors to experience the shortest wait times. Thanks to this expedited processing, many EB-5 investors and their families have obtained U.S. Green Cards within just a few months.
Largest Reserved Visa Quota
Another major benefit of investing in a rural TEA project is access to 20% of the annual EB-5 visa quota, the highest allocation among the three reserved visa categories. Historically, the demand for rural EB-5 projects has been lower than for high-unemployment TEA projects, meaning this reserved quota is likely to remain available longer, reducing the risk of backlog.
Investing in High-Unemployment TEA Projects
Before the RIA introduced significant incentives for rural TEA investments, high-unemployment urban TEA projects dominated the EB-5 market. Typically, large real estate urban TEA projects developed by major companies were considered a safe option for EB-5 investors as they were often fully capitalized and had significant job creation.
Post-RIA, although there is an increase in the demand for rural TEA investments, urban TEA projects continue to remain popular. However, since the visa allocation for high-unemployment TEA investments is limited to just 10% of the total EB-5 visas, this category could quickly become oversubscribed, leading to lengthy processing delays, particularly for investors from China and India.
Investing in Infrastructure Projects
The EB-5 infrastructure project investment category was introduced by the RIA in March 2022.
This category includes projects managed by federal, state, or local government agencies focused on public works development. The goal is to promote infrastructure growth across the United States.
Investors in qualifying public infrastructure projects can benefit from a reduced investment threshold of $800,000 and have access to 2% of the annual EB-5 visa quota through reserved visa set-asides.
Since infrastructure project investments are still relatively new, there is some uncertainty surrounding the criteria for eligible projects. The demand has been low, with only a limited number of projects meeting the infrastructure classification so far.
Why an Informed Decision Matters
The EB-5 program offers great opportunities for foreign nationals looking to obtain U.S. residency through investment. Whether investing in a rural or high-unemployment TEA project, it’s important to weigh your priorities and assess your goals. Each investor’s situation is unique, so there’s no one-size-fits-all solution.
An informed decision requires careful consideration of both the benefits and risks of each project type. Investors who take the time to research their options and speak with experienced professionals are more likely to set themselves up for a greater chance of success.
If you need more information about EB-5 set-asides or general guidance on investment options, feel free to book a one-on-one call with our expert team.
