Entrepreneurs and foreign investors can get a visa to enter the United States via the EB-5 Immigrant Investor Program, the fifth preference of permanent worker visas. By investing in a targeted employment area (TEA), the minimum investment threshold can be lowered from $1 million to $500,000. Over 94% of the EB-5 visas issued in the fiscal year 2016 were for targeted employment areas. The use of TEAs has contributed to the rise in popularity of the EB-5 program in recent years, as it both provides economic impact where it is most needed and allows a wider range of foreign investors.

There are two metrics that qualify a region as a TEA: high unemployment areas and rural areas. A high unemployment area is one with an unemployment rate higher than 1.5 times the national average, as calculated by the Bureau of Labor Statistics. A rural area is any area outside of either a Metropolitan Statistical Area (MSA) or a city or town with a population greater than 20,000. MSAs are delineated by the Office of Management and Budget and consist of a region with high population density and close economic ties, shown in darker green in the map below (the lighter green shows micropolitan statistical areas).

Metropolitan and Micropolitan Statistical Areas (CBSAs) of the United States and Puerto Rico, Feb 2013

A business is considered to be within the TEA if that is where it “regularly, systematically, and continuously provides goods or services that support job creation,” per the U.S. Citizenship and Immigration Services (USCIS). There is not a federal-level list of TEAs, but some states (including HawaiiCaliforniaFlorida, and Washington) and at least one city (Austin, Texas) maintain lists of their own TEAs and can designate their own high unemployment TEAs, subject to review from the USCIS. States cannot designate a rural TEA.

If an applicant wishes to invest in a business that is not within a currently-designated TEA, they can petition for a TEA designation. This involves gathering the relevant information (either unemployment or census data) and submitting it along with their I-526 petition. Washington State provides a directions guide for TEA petitions that may be helpful in understanding the type of information required. The data needed for TEA designation is publicly available.

The use of TEAs is intended to promote job creation and stimulate the economy in areas that need it the most. Some critics argue, however, that the classification of TEAs since their creation in the Immigration Act of 1990 has become too easy and is being manipulated by states to allow EB-5 visa-holders to start businesses in wealthy areas without having to meet the $1 million investment threshold. Regardless of that claim, EB-5 projects are actively bringing investors to the United States. Over $1 billion annually has been invested via the program since 2012 and thousands of jobs, direct and indirect, have been created. The advocacy group Invest In the USA (IIUSA) maintains a collection of EB-5 success stories across the nation.

If you are considering investing in a TEA via an EB-5 visa, Ellis Island Capital may be able to help. Please click here to learn more.