What Are Targeted Employment Areas (TEAs)?

What are targeted employment areas, why are they important to the EB-5 Program, and how are they designated?

What are targeted employment areas?

Targeted employment areas (TEAs) are areas that are either rural or they have an unemployment rate that’s at least 150% of the national average.

A rural area can qualify as a TEA if it’s not near a designated by the federal Office of Management and Budget (OMB) to be a metropolitan statistical area (MSA) or on the boundary of a town with more than 20,000.

A high unemployment area can qualify as a TEA if it’s located in a MSA as long as it has an unemployment rate that is at least 150% of the national average.

A TEA can be located anywhere in the U.S. New York City can be considered a TEA because of how TEAs work. Locations are divided into tracts and multiple tracts can make up a targeted employment area. This means that a project may not have to be located in a high unemployment area if it’s adjoining tracts are located in high unemployment areas to still qualify for TEA designation. A TEA does not have to a box, it can be an irregular shape. How TEA boundaries are drawn is left to the discretion of the states.

Why are they important to the EB-5 Program?

Qualified EB-5 investors can take advantage of the lower minimum investment requirement of $500,000 instead of $1 million for investing in a designated TEA.

The purpose of targeted employment areas and the lower minimum investment requirement was to encourage investment in projects located in areas that could benefit the most from job creation.

How are targeted employment areas designated?

States have the authority to designate TEAs, however, USCIS has oversight and reviews all proposed TEA designations to ensure compliance with the EB-5 Program’s requirements.