Targeted Employment Area (TEA)
One way to lower the minimum amount of capital investment required to obtain an EB-5 visa is to invest the capital in a targeted employment area. Targeted employment areas (TEAs) are either rural areas or areas with unemployment rates at or above 150 percent of the national average unemployment rate.
For the typical EB-5 visa, the domestic job-creating investment sum required is usually $1 million. For EB-5 visas where the investment capital is located in a targeted employment area, the required investment sum is just $500,000. This is half of the requirement for an investment visa that leads to jobs outside of a targeted employment area.
Incentivizing Job-Creation Where Truly Needed
The original purpose of the investor visa program was to spur job creation in the United States. Some areas of the country have a far greater need for job creation and economic growth than others. This serves to give more immigrants an opportunity to invest in these areas, especially if they would not have reached the investment requirement of $1 million.
Another aspect of the reduced investment requirement is that with far fewer people around in the area than in a major metropolitan area to drive the economy, and perhaps high levels of unemployment, investing capital in these areas can be a bit riskier than others. Their local economies could use an infusion of outside money. Therefore, the 50 percent investment minimum reduction for targeted employment areas acts as a further incentive for immigrants to invest in the neediest of places.
How Is a Targeted Employment Area Defined?
In order to be an officially designated targeted employment area, the area must satisfy either one of the following requirements (with a further breakdown of each below):
- Be located in a rural area of the country
- High unemployment rate
Officially Designated Rural Areas
Rural areas are designated by the Office of Management and Budget (OMB) as areas outside of either metropolitan statistical areas (MSAs) or outer boundaries of cities or towns with populations of 20,000 or more. MSAs are defined as having a large and concentrated population center (i.e. cities, towns, and their surrounding suburbs).
In February of 2013, the U.S. Census Bureau released the following map with the metropolitan (and micropolitan) statistical areas on it. All of the light green and white colored areas are designated as rural areas. As such, they should be considered a targeted employment area and come with the reduced EB-5 visa investment amount. Keep in mind that some of the areas might not qualify if the rural area inside of the outer boundaries of cities or towns with a population of 20,000 people or more.
High Unemployment Rates Defined
The second alternative to defining a targeted employment area is a high unemployment rate. An area will qualify as a TEA if its unemployment rate is at least 150 percent of the national average at the time of investment. In this case, an area need not be considered rural to qualify. Some major metropolitan areas, such as some neighborhoods in New York City for instance, have high enough unemployment rates to qualify for TEA classification.
As of June 2017, the Bureau of Labor Statistics (BLS) listed the national unemployment rate in the U.S. as 4.4 percent. For an area to have qualified as a targeted employment area under this requirement at that date, its unemployment rate needed to be at least 6.6 percent.