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If you are applying for an EB-5 investment visa, you might have read about TEA, which stands for Targeted Unemployment Area. There is some confusion as to what is TEA and how it applies to a location and EB-5.

What is TEA?

TEAs were originally created to improve the economy of rural areas, where the population can be smaller. Now the standard of what area can be considered as a TEA has changed.  An area can now be designated as TEA if it is rural, or if it has unemployment at 150% of the national average. An area can only be designated as TEA due to high unemployment if the population within the county is more than 20,000. The point of a TEA is to use investment money given through an EB-5 investment visa in an economy that could use a boost to its businesses.

How is an area defined as rural?

An area can be defined as rural as long as it meets two conditions. First, it can not be within a metropolitan statistical area, which will be decided by the Office of Management and Budget. It also may not be on the outskirts of a city or town with a population of 20,000 or more. If you wish to check whether an area is considered as rural, the Census Bureau website offers a map of all rural areas within the United States.

How can a location receive Targeted Unemployment Area due to high unemployment?

First, an area must have at least 150% unemployment of the national average. Secondly, the area must have a population greater than 20,000 within the county to be issued a TEA within a metropolitan area due to high unemployment.

What if my desired area does not have the TEA standing?

A proposed EB-5 project can receive TEA designation if the area complies with the high unemployment regulations. As you file your paperwork, you will be able to provide any publicly available statistics proving the area is eligible for TEA. Some states help the process by allowing individuals to apply separately for their area to be awarded as a Targeted Unemployment Area.

Who decides which area is a Targeted Unemployment Area, TEA?

There is no detailed standard or list from the federal government determining how and which areas are eligible to be designated as TEA. It is the individual states that decide which areas within their borders are consistent with the definition of TEA. Due to their input, states are able to add to their list of TEAs.

What is the Benefit of a TEA?

If the business you choose for your EB-5 project is located within a Targeted Unemployment Area (due to rural or high unemployment means), then your investment minimum is lower compared to a business located outside of a TEA. The investment minimum becomes $500,000 rather than $1,000,000.

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