The EB-5 visa program promises legal, permanent residency to foreigners who make a capital investment — generally at least a million dollars — in a commercial enterprise that will yield at least ten domestic, full-time jobs. Yet while the minimum qualifying investment is usually $1 million, there are certain circumstances in which an investor is required to meet a $500,000 minimum instead. Such instances involve projects in Targeted Employment Areas, or areas that suffer from high unemployment or are rural.

Targeted Employment Area

A targeted employment area can be defined as an area that is (1) rural (see guidelines below) or (2) experiencing unemployment that is at least 150 percent the national unemployment average. If either of those situations apply at the time of the investment, the enterprise may qualify for guidelines set for TEA projects, thus permitting the foreign investor to meet the lower $500,000 minimum capital threshold rather than the $1 million minimum.

Rural Area

United States Citizenship & Immigration Services defines a rural area “as any area outside a metropolitan statistical area (as designated by the Office of Management and Budget) or outside the boundary of any city or town having a population of 20,000 or more according to the decennial census.”

Getting TEA designation

If an investor wishes to make the case the project he or she has chosen is in a targeted employment or rural area, it’s his/her responsibility to obtain TEA designation during the I-526 application process, or the Immigration Petition by Alien Entrepreneur process that establishes the applicant as a qualified EB-5 investor. TEA status can be secured if the EB-5 applicant provides adequate evidence, such as information from the Bureau of Labor Statistics’ Local Area Unemployment Statistics (to help prove the local unemployment rate is 150 percent the national average), or a letter from the state government that provides evidence for either rural or high-unemployment designation. These are merely examples; other evidence can be used as well. Once this type of documentation has been obtained, either USCIS or the state government can grant the project the necessary TEA status.

Note: This process is required only if the investor wishes to make the $500,000 investment versus $1 million. If $1 million is provided to a project in a rural or high-unemployment area, it is not necessary to seek out TEA designation.

Also, if the project has already been designated TEA status, there is no need to undergo this process.

Finding Projects in High-Unemployment Areas

For investors searching for projects that might meet TEA requirements, some states (California, Colorado, Florida, New Jersey, New York and Ohio, to name several) have already identified targeted employment areas. Yet while investors can use this type of information as a guide when identifying prospective projects in which to put capital (projects can be found through regional centers, immigration attorneys or brokers, or on one’s own), each EB-5 investor must still obtain certification that states a specific project is eligible for TEA designation.

Debate over TEA’s

Some critics claim areas of New York and Washington, DC, for example, have had their boundaries manipulated to qualify for TEA status, though parts of those designated regions are, arguably, relatively wealthy. Media outlets such as The New York Times, Washington City Paper, and Fortune all have charged there’s a relative laxness on the part of the government that is applied to the TEA designation process. According to Fortune, “After years of industry pressure, it’s now USCIS policy to automatically accept any state designation of a TEA, even though states routinely approve gerrymandered districts that tack on distant high-unemployment tracts to allow EB-5 endeavors in wealthy areas.”

This is under some consideration in Congress, where the Senate Judiciary Committee held a hearing in spring 2016 entitled “The Distortion of EB-5 Targeted Employment Areas: Time to End the Abuse.”

In 2015, Arizona Senator Jeff Flake (R) introduced legislation that, among other things, proposed areas that are designated TEA’s retain that status for five years, with the possibility for renewal in five-year increments.

Contact KPPB Law For More Information!

To learn more about U.S. visas and the immigration process, and to take advantage of our array of immigration services, please contact KPPB Law by giving us a call or sending us a message online. We have a great deal of experience in guiding clients through the immigration process and we can help you navigate through the details.

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Beeraj Patel, Esq.

Partner at KPPB Law
Beeraj Patel's philosophy is simple - make it easy for talented and ambitious individuals to have access to immigration materials so that they can make the choice which is right for them.
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