Regional center projects are by far the most preferred investment option for foreign nationals seeking the EB-5 visa—and for a good reason. EB-5 regional centers are government-approved entities that pool capital from multiple investors for investment in large-scale projects, providing investors with a diverse range of offerings to choose from. As passive participants, investors do not need to be involved in the project’s complex documentation requirements or day-to-day operations, which are professionally managed by the regional centers.
Most importantly, regional center investments make it easier for investors to fulfill the job creation requirement of United States Citizenship and Immigration Services (USCIS). Besides the directly created jobs, these projects also include indirect and induced employment to calculate the total number of jobs generated by the larger economic impact of the project. Considering how critical the job creation requirement is for the approval of an EB-5 petition, investing through a regional center greatly reduces the immigration risk for applicants.
The main objective of the EB-5 Immigrant Investor Program is to fuel the economy and create jobs through foreign capital. In exchange, it grants U.S. permanent residency, also known as the Green Card, to qualified investors and their eligible family members.
In order to boost development in underserved regions, the program offers special incentives to applicants investing in targeted employment areas (TEAs), which are designated rural or high-unemployment areas in need of economic stimulation. TEA investors get access to significant benefits, such as a lower investment threshold, reserved set-aside visa quota, and faster processing in the rural category, saving them both time and money in the EB-5 process.
Regional center projects typically fall within TEAs, making them even more appealing for EB-5 investors.
While hundreds of TEA projects are available across the United States, some areas offer more advantages to EB-5 investors for both immigration and financial success. In this article, we will discuss why investors must look for projects in these strategic locations and avoid areas that could have higher associated risk factors.
Best Locations for TEA Investors
Why Investors Must Avoid Certain Areas
Contact EB5AN to Find the Safest Investments
Best Locations for TEA Investors
Although potential investors can choose to invest anywhere in the United States, they must evaluate all aspects of a project, including its location, before investing in it. An area with a declining population or a sluggish economy may not be a good choice for an EB-5 investment, even if the project sounds promising.
In recent years, Western states such as Colorado, Utah, and Wyoming have seen substantial growth in residential real estate due to their steadily rising population. Compared to popular areas like California, this region has lower real estate and development costs and offers affordable options to buyers. Low cost of living, stable economy, and beautiful natural landscape have also catalyzed the demand in these states.
With the population on the rise, the real estate market in this region has significant growth potential, which translates into reduced risk and better returns on investment for EB-5 investors. The developers’ financial commitment and risk are also relatively low as they have access to land at comparatively lower rates, making the projects safer for EB-5 investment.
Likewise, Southeastern states have seen a high migration from more expensive cities due to the growing work-from-home trend after the pandemic. Since many employees can now work remotely, residents of costly states like New York are increasingly moving to more affordable states such as Georgia and Florida. Also known for its pleasant climate and loads of cultural and recreational opportunities for residents, this region has become an attractive place for relocation.
Moreover, some of the cities in this area are key business hubs that support job creation and contribute to its economic growth. Backed by a robust economy and a solid real estate market, EB-5 projects in these states have a high likelihood of being completed successfully.
TEA Benefits in the West and Southeast
Many parts of the West, Midwest and Southeast qualify as TEAs, offering a wide range of investment options with multiple benefits to EB-5 investors. To start with, all TEA investments qualify for the lower minimum investment criteria, so TEA investors need to invest only $800,000 as compared to $1,050,000 for non-TEA investors.
Rural TEA investments also have the added advantage of priority processing as mandated by the EB-5 Reform and Integrity Act of 2022 (RIA). Under this provision, rural TEA petitions get priority for adjudication over other petitions, reducing their processing time. As a result, many rural TEA investors have been able to receive their physical Green Cards within a few months of filing their I-526E petitions.
Investors from high-demand countries that have years-long waiting for visa availability can also benefit from a rural TEA investment. Rural investors are eligible for a 20% set-aside visa quota that allows them to skip the long unreserved queue and get a Green Card soon after their EB-5 petition is approved, with no extra waiting time.
Although the high-unemployment TEA category also qualifies for a 10% set-aside reserved visa quota, data estimates show that this category may soon become oversubscribed.
Comparatively, the rural TEA category has a larger share of reserved visas and no backlogs yet. Also, with the faster processing advantage, it is an ideal option for potential investors.
Why Investors Must Avoid Certain Areas
While certain areas have more to offer prospective EB-5 investors, others may pose higher risks. This is why it is important for investors to do their due diligence and consult with industry professionals.
For example, the California Bay Area, while economically vibrant and home to some of the world’s largest tech companies, is increasingly becoming a risky option for EB-5 investments for several reasons.
The Bay Area has been experiencing a mass exodus ever since the remote working trend gained momentum after the pandemic. The high cost of living and growing crime rates in the area have only added to the outmigration as people are seeking more affordable and safe communities to live in, away from the urban areas.
As more and more people continue to move out to suburban or rural areas, property prices and rental occupancy are expected to remain low, making it difficult for built-to-rent apartment projects to reach their revenue projections. Such projects may not be able to cover their debt payments and could face a loan default, which could mean a complete loss of capital for investors.
Besides the fluctuations in the real estate market, the loss of thousands of taxpayers is also hurting the region’s economy.
The failure of the Silicon Valley Bank in March 2023 has further exacerbated the financial problems of Bay Area projects, increasing the risk for investors. The impact of these factors could be long-lasting, and potential EB-5 applicants should avoid investing in this area.
Contact EB5AN to Find the Safest Investments
The EB-5 visa is one of the most straightforward ways for foreign nationals to obtain a fast-track Green Card and citizenship in the United States. However, to safeguard their funds and increase their chances of successful immigration, investors must carefully evaluate regional center projects in their larger economic and geographical context.
As a leading regional center operator, EB5AN can help you find the most suitable investment for your individual needs.
EB5AN has helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. Our expert team has more than a decade of experience and offers clients first-rate, low-risk EB-5 regional center projects with a 100% USCIS project approval rate.
Book a free call with our expert team today to learn more about the best EB-5 investment locations.
