A targeted employment area is a part of the country that is either rural or experiencing high unemployment at the time of EB-5 investment. The required minimum investment amount of capital will be cut half if investing in TEA.
For EB-5 purposes, a rural area is any area located outside of a metropolitan statistical area (MSA). A metropolitan statistical area is a section of the country, as defined by the Office of Management and Budget (OMB), that has a large, concentrated population center. In a nutshell, they generally include cities and towns and their surrounding areas.
In addition to being outside of a metropolitan statistical area, a rural area must also be located outside of the outer boundaries of cities or towns with a population of 20,000 people or more.
High Unemployment Area
Prior to November 21, 2019, a TEA can also be a part of the country experiencing unemployment of at least 150 percent of the national average at the time of EB-5 investment. The national average unemployment rate is determined by the Bureau of Labor Statistics (BLS) and was 4.1 percent as of April 2017. Therefore, the minimum unemployment rate required to define an area as a TEA in April 2017 was 6.2 percent.
Starting from November 21, 2019, Department of Homeland Security (DHS) will directly review and determine the designation of high-unemployment TEAs; DHS will no longer defer to TEA designations made by state and local governments.
Specially designated high-unemployment TEAs will now consist of a combination of census tracts that include the tract or contiguous tracts in which the new commercial enterprise is principally doing business, including any or all directly adjacent tracts.
Provided they have experienced an average unemployment rate of at least 150% of the national average unemployment rate, TEAs may now include cities and towns with a population of 20,000 or more outside of metropolitan statistical areas.