Since the passage for the EB-5 Reform and Integrity Act in 2022, the set aside categories of rural and high unemployment Targeted Employment Area (TEA) projects have been a game changer for many EB-5 investors.
Not only do EB-5 rural projects allow investors to meet the lower minimum investment threshold of $800,000, but they have also created a clearer path to permanent residency for investors from backlogged countries such as China and India. Prior to the introduction of rural and high-unemployment set-aside categories, EB-5 investors from these countries faced long visa retrogression delays. As of the end of November 2024, both EB-5 project rural and high-unemployment TEA categories remain current for all countries, including China and India.
While these developments have expanded opportunities for investors, it is critical to understand how an EB-5 rural project or high-unemployment project qualifies under USCIS criteria before making an investment.
1. Rural TEA (Targeted Employment Area)
A rural TEA is an area located outside of a metropolitan statistical area (MSA) and not within the boundaries of a city or town with a population of 20,000 or more. Many EB-5 rural development projects are designed to stimulate economic growth in areas that need it most.
To qualify as a rural TEA:
- Location Requirement: The project must be in an area that is outside the boundaries of a city or town with a population of at least 20,000. The area must also be outside of an MSA.
- Urbanization: The area cannot be highly urbanized; it must be in a more rural location, where economic development is more needed.
2. High-Unemployment TEA
A high-unemployment TEA is an area with an unemployment rate that is at least 150% of the national average.
To qualify as a high-unemployment TEA:
- Unemployment Threshold: The area must have an unemployment rate that is at least 150% of the national average unemployment rate.
- Measurement: This is based on the most recent U.S. Department of Labor data for the region in question, either at the county or metropolitan statistical level. An MSA is a geographic region defined by the U.S. Office of Management and Budget (OMB) for statistical purposes. It consists of one or more counties (or county equivalents) that have at least one urbanized area with a population of 50,000 or more people. The MSA is characterized by social and economic ties, which are often reflected in commuting patterns.
- Qualification: The USCIS will review the regional data (usually at the county level) to determine if the unemployment rate in the area meets the threshold.
