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New areas (TEA) allowing lower EB-5 investments

On November 21, 2019, new EB-5 regulations became effective. They brought some changes to the EB-5 program.

One of the likely consequence of the new EB-5 regulations is that the Targeted Employment Area (TEA) designation (enabling a lower investment threshold) will be harder to get and urban TEAs will be driven to lesser-developed locations.

In order to be designated as a TEA, the EB-5 project must be located in either a rural area or in a location that has high unemployment. 

Prior to the effective date of new EB-5 regulations, the TEA designation was made at state level and most states had very liberal TEA’s designation policies, even in economically robust urban zones. Consequently, more than 95% of EB-5 investments were made in TEA-located projects. Under the new EB-5 regulations, USCIS is no longer deferring
to TEA designations made by state and local governments and is
directly reviewing and determining the designation of high-unemployment TEAs.

Under the previous regulations, it was quite common to aggregate census tracts to create Regional Center EB-5 offerings even in some of the nation’s most high-priced neighborhoods. Census tract combination for high-unemployment TEAs is now much more restrictive: census tract aggregation is limited to the project tract(s) plus some or all of the tracts that are “directly adjacent” to the project tract. Utilizing census block groups (a census tract is made up of several block groups) is no longer allowed. 

Some EB-5 industry experts (analysts and economists) estimate that approximately two thirds of the projects that had qualified before will not qualify for TEA status under the revised standard.

Please note that this articles does not constitute a legal advice.  We outlined only one aspect of new EB-5 regulations and its consequences.  If you would like to get a green card through an investment (EB-5), call an experienced EB-5 immigration attorney at 480-425-2009 or schedule your consultation online.