EB5AN Launches New EB-5 Targeted Employment Area (TEA) Map with Latest Data

EB5AN new EB-5 TEA Map is an intuitive and powerful tool for investors and business owners to determine if projects qualify for the benefits of TEA status.

EB5AN is pleased to announce the launch of its updated Targeted Employment Area Map, a free online resource that serves business owners and investors in the EB-5 industry. In a matter of seconds, users can determine whether the locations of their EB-5 projects qualify as targeted employment areas (TEAs).

EB5AN’s TEA Map has been updated with the latest demographic statistics used to determine TEA status. Most EB-5 investment capital is deployed in TEAs, and therefore the TEA Map can reflect trends in the EB-5 market.

We now provide an overview of the role of TEAs in the EB-5 investment space and outline the features of our new EB-5 TEA Map.

The Role of TEAs in the EB-5 Program: High Unemployment and Rural

In the EB-5 Immigrant Investor Program, TEAs are locations—usually small areas called census tracts—with a substantial need for promoting economic growth. TEAs are either rural or high unemployment areas (with an unemployment rate at least 150% of the national average). Areas that qualify as a TEA via unemployment rate are called “high unemployment” TEAs.

EB-5 visa applicants are incentivized to invest in projects located in TEAs because they reduce the capital requirement from $1,050,000 down to $800,000—a significant reduction. This provision of the EB-5 program has benefitted thousands of businesses and directed EB-5 funds into areas with the greatest need. Both direct EB-5 projects and projects sponsored by regional centers can obtain TEA designation.

It should be noted that EB-5 “infrastructure” projects also receive the same reduced capital requirement of $800,000. Infrastructure EB-5 projects are also eligible for a reserved visa set aside equal to 2% of available EB-5 visas per fiscal year.

In the wake of the EB-5 Reform and Integrity Act which was signed into law in March 2022, investors in TEA projects now also have the opportunity to receive a reserved EB-5 visa under the new visa set asides. EB-5 investors in rural TEA projects qualify for a set aside equal to 20% of available EB-5 visas per fiscal year, and EB-5 investors in high unemployment TEA projects qualify for a 10% visa set aside. Set asides are extremely impactful for investors from countries with a high volume of EB-5 applicants because they can help those investors avoid processing delays. Investing in a TEA project could save some EB-5 applicants years in reduced processing times.

Finally, in addition to qualifying for a reduced capital investment amount and a 20% visa set aside, EB-5 investors in rural TEA projects will also benefit from faster processing of their Form I-526 petitions by United States Citizenship and Immigration Services (USCIS). At this time, it is unknown exactly how much faster the I-526 petitions for EB-5 investors in rural TEA projects will be processed, but we do know that USCIS plans to implement a priority processing system for these EB-5 investors.

These benefits make TEA designation increasingly appealing to foreign nationals selecting an EB-5 project. As a result, accurately demonstrating that an EB-5 project site qualifies as a TEA has become crucial for both EB-5 project developers and EB-5 investors.

Demonstrating TEA Status

Rural TEAs

Investors must submit documentary evidence of their project’s TEA status with their Form I-526, the first application in the EB-5 visa process. A location qualifies as a rural TEA if it is not located within a metropolitan statistical area (MSA) as defined by the U.S. Office of Management and Budget and not on “the outer boundary of any city or town having a population of 20,000 or more.” The population statistics used to determine rural TEA status must use data from the most recent decennial U.S. census.

High-Unemployment TEAs

Alternatively, high-unemployment TEA designation requires investors to obtain both the area’s unemployment rate and the national unemployment rate of the United States. Both of these figures must be derived from the same source and cover the same time period.

Investors can employ two different methodologies to calculate whether a census tract or group of census tracts qualifies as a high-unemployment TEA:

• American Community Survey (ACS) Data: The ACS is a five-year demographics survey that collects unemployment data by census tract.
• The Census-Share Method: In this approach, ACS data is combined with county-level Local Area Unemployment Statistics (LAUS) to create a one-year unemployment rate average. The goal is to calculate the relevant census tract’s share of its county’s unemployment statistics.

In addition to calculating the unemployment rate of the single census tract in which the project is located, investors may also include directly adjacent or contiguous census tracts. This provision can be useful if a particular census tract does not qualify on its own. In this case, investors must calculate the combined unemployment rate of any combined tracts.

Once USCIS designates a location as a TEA, the area’s TEA status will be valid for two years, starting when an investor submits Form I-526 or at the time of investment. EB-5 TEA designation can subsequently be renewed for additional two-year periods.

Demonstrating a location’s TEA status can be complex, and USCIS sets a very high evidentiary standard. All data must be up-to-date and internally consistent. It can take a significant amount of time for individual investors to find the correct demographic statistics and ensure that calculations are accurate. Moreover, if the data is not current at the time an investor submits the I-526 petition, they will not be eligible for the reduced investment threshold and other benefits.

Features of the EB5AN TEA Map

The EB5AN TEA Map provides users with a straightforward tool to determine whether a census tract, or a group of census tracts, qualifies as a TEA. The EB-5 TEA Map uses the three methodologies described above: population and MSA data for rural TEAs; ACS data for high unemployment TEAs; and the census-share method also for high unemployment TEAs. Our tool offers several features absent in other TEA databases.

Updated Demographic Data

While other TEA databases often rely on out-of-date or incorrect data, the EB-5 TEA Map uses the latest LAUS, ACS, and 2020 U.S. census statistics. The yearly LAUS data released in April 2022 reveals a significant reduction in unemployment, with a national average of 5.3% as opposed to the previous rate of 8.1%. Five-year ACS statistics updated in March 2022 set an unemployment rate of 5.4%, a slight increase from the previous data set. Moreover, the boundaries of several census tracts across the United States have been modified by the U.S. Census Bureau, and numerous municipalities now have populations of more than 20,000.

More census tracts may now qualify for high-unemployment TEA status under LAUS data, while some rural TEAs could be disqualified due to population growth or changing county or MSA boundaries. Based on the latest statistics, we calculate that approximately 50% of all census tracts in the United States qualify as high-unemployment TEAs, while about 10% fulfill the criteria for the rural TEA category.

Census Tracts Are Combined Automatically

Many EB-5 projects combine contiguous or adjacent census tracts to obtain high-unemployment TEA designation. EB5AN’s TEA Map automatically combines census tracts when possible and immediately reports whether the resulting area qualifies as a TEA. This useful feature removes the guesswork out of EB-5 TEA calculations. EB5AN’s TEA Map only combines census tracts directly contiguous with the census tract containing the searched address—consistent with USCIS requirements for TEAs.

A User-Friendly Interface

Users can find out whether any location in the United States qualifies as an EB-5 TEA simply by typing their desired address into the search bar. The map then shows if the address qualifies as a TEA, displays all relevant statistics, and notifies the user of which calculation methods were used. In addition, EB5AN’s TEA Map loads instantly, and no user registration is required.

TEA Qualification Reports

Users of our EB-5 TEA Map can instantly purchase a detailed TEA qualification report that explains the calculations and displays the relevant demographic data along with a map of the census tracts. This TEA qualification report could then be included in an investor’s I-526 petition as evidence to sustain the project’s TEA status, subject to review by an EB-5 professional or immigration attorney.

Thanks to EB5AN’s position as an industry-leading EB-5 firm, USCIS adjudicators who review I-526 petitions may more easily recognize qualification reports crafted by our team. A sample EB-5 TEA qualification report is available here.

TEAs Are Essential to the EB-5 Investment Industry

The reduced investment amount for TEA projects has made the EB-5 visa a possibility for thousands of foreign investors, and the U.S. economy will continue to benefit from this much-needed source of capital. Foreign nationals and business owners can use the EB5AN TEA Map to plan their EB-5 investments and projects in advance, saving significant time and resources in the process.

EB5AN offers a free consultation for investors and business owners who would like to learn more about TEAs or other aspects of the EB-5 industry.