Everything You Need To Know About A Targeted Employment Area (TEA)

Acquiring targeted employment area designation for an EB-5 project is one of the most important steps in the EB-5 process.

What is a targeted employment area?

A targeted employment area is a location that is either rural or has a high unemployment rate. EB-5 investors can invest in an area that either is or isn’t a TEA.

Why do most EB5 investors choose a project that is located in a targeted employment area?

The majority of EB-5 investors choose projects located in a TEA because is lowers the required minimum investment amount from $1 million to just $500,000.

What qualifies as a TEA?

A project may qualify as a TEA if it’s located in a rural or high unemployment area.

A rural area is a location outside of a metropolitan statistical area and it must be outside a town or city that has a population with 20,000 or more people.

A high unemployment are is a location that has a unemployment rate that is greater than 150% the national average (as stated by the Bureau of Labor Statistics).

To create a targeted employment area, multiple contiguous tracts may be combined and the average unemployment rate of the area may be used if it exceeds the threshold.

How is a targeted employment area designated?

EB-5 applicants must submit a targeted employment area designation letter to USCIS as a part of their I-526 petition. The letter must provide proof that the project they are investing in is in an area that is either rural or has a unemployment rate 150% the national average. Investors can contact the U.S. Bureau of Labor Statistics or the state government where the project would be located for TEA letters and evidence. Many states already have a list of TEAs.

Why are TEAs important? What is their purpose?

The purpose of targeted employment areas is to encourage EB5 investors to invest in rural or high unemployment areas and to stimulate the local economies and create jobs in areas that need them the most.