What is a TEA?

The concept of a Targeted Employment Area (TEA) is integral to the EB-5 visa program, offering investors an opportunity to qualify for a reduced investment threshold. Let's explore the various facets of TEAs, highlighting their definitions, designations, and implications for potential investors.

Definition:

A TEA is defined as either a rural area or a high-unemployment area:

• Rural Area: Any area outside of a Metropolitan Statistical Area (MSA) or outside a city or town with a population of 20,000 or more. These areas typically lack urban development and offer unique opportunities for impactful investments.

• High-Unemployment Area: Characterized by an unemployment rate at least 150% of the national average, these areas are often economically distressed and in need of revitalization.

Designation:

The Department of Homeland Security (DHS) is responsible for designating TEAs. This designation process involves analyzing data from census tracts and adjacent tracts where the commercial enterprise operates. DHS relies on data from sources such as the U.S. Census Bureau's American Community Survey and the Bureau of Labor Statistics to determine high-unemployment areas.

Investment Amount and TEA:

Investing in a TEA offers a significant advantage: a lower investment threshold of $800,000, compared to the standard $1,050,000. This reduction makes it more feasible for investors to participate in the EB-5 program while directing their resources towards areas that need economic development.

TEA Designation Validity:

TEA designations are valid for two years from the date an accredited regional center applies for investment approval or from the date a direct investor makes the investment if not through a regional center. This validity period provides a predictable timeframe for investors to plan and execute their investments.

Renewal and Investment Protection:

TEA designations can be renewed for additional two-year periods. Importantly, if a TEA designation expires after an investor has made their investment, the investor is not required to increase their investment amount. This protection ensures stability for investors who commit to TEAs.

Job Creation and TEA:

Investors benefiting from the reduced investment amount associated with a TEA must ensure that the ten required jobs per investor are created within the designated TEA. This job creation requirement aligns with the EB-5 program's goal of stimulating economic growth in underserved areas.

Documentation for TEA:

Since November 21, 2019, USCIS determines TEAs, considering only census tract data where the new commercial enterprise primarily conducts business. Before this date, investors had to provide evidence of high unemployment in the statistical area, often including a letter from a state agency. The updated process aims to streamline and standardize TEA designations.

Additional Insights

Understanding the intricacies of TEA designations can be challenging, especially when dealing with multiple Job Creating Entity (JCE) locations. If your initial business plan doesn't specify all JCE locations, it may lead to denials if not all JCEs are within designated TEAs at the time of filing. Ensuring clarity and accuracy in your business plan is crucial.

Moreover, while historical methods for determining TEAs have evolved, DHS now emphasizes reliable data sources for verifying high-unemployment areas. Investors should stay informed about these changes to ensure compliance and maximize the benefits of their investments.

It's also worth noting the potential interplay between TEAs and Standard Metropolitan Statistical Areas (SMSAs) concerning labor certification. While the Department of Labor (DOL) recognizes labor certifications within the same SMSA or commuting area, this concept may not directly relate to TEAs. Further research and expert advice can clarify any connections.

Why Consider TEA Investments?

Investing in a TEA not only reduces the financial threshold for the EB-5 visa but also aligns your investment with significant economic impact. These areas, often underserved and struggling with high unemployment, benefit greatly from new businesses and job opportunities. Your investment can be a catalyst for community growth, revitalization, and long-term economic sustainability.

An experienced attorney can guide you through the complexities of TEA designations, helping you navigate the regulatory landscape and make informed investment decisions. Investing in a TEA through the EB-5 program is more than a financial decision—it's a commitment to fostering economic growth and creating opportunities in the United States. If you're considering an EB-5 visa, focusing on a TEA could be a strategic move that offers both personal and economic rewards.

Contact us today to discuss how you can leverage TEA investments to achieve your immigration and investment goals.