EB-5 Investor RequirementsTargeted Employment Areas

A Closer Look at High-Unemployment TEA Eligibility Calculations


Foreign nationals from all over the world dream of immigrating to the United States with their family to enjoy a safer, brighter future. The EB-5 Immigrant Investor Program offers foreign nationals the unique chance to obtain permanent resident status in the United States in exchange for a qualifying investment in an EB-5 project. Additionally, their investment must meet several key requirements, including the creation of 10 new full-time jobs, remaining “at risk” during the investment period, and satisfying the minimum required investment amount.

The minimum amount required to invest in the EB-5 program is $1.8 million, or $900,000 if the project is located in a targeted employment area (TEA). Prior to the Modernization Rule taking effect in November 2019, the minimum investment amount was $1 million, or $500,000 for a TEA project. Due to the minimum investment amount nearly doubling, EB-5 investments are no longer as accessible to foreign nationals with less investment capital. For this reason, the majority of EB-5 investors try to invest in TEA projects to take advantage of the lower minimum investment amount. However, proving a project’s TEA eligibility can be a complicated task.

High-Unemployment TEA Eligibility Calculation Methods

Although United States Citizenship and Immigration Services (USCIS) defines what qualifies as a TEA, it is up to the investor to provide the necessary documents and calculations to justify a project’s TEA designation. While this takes more work on the investor’s part, it does allow for more flexibility with that projects qualify as TEA projects, which is great for investors.

There are two different types of TEAs: high-unemployment TEAs and rural TEAs. Rural TEAs are areas that have a population less than 20,000 and are not located in a metropolitan statistical area (MSA). Investors usually use the latest 10-year U.S. census data when calculating rural TEA eligibility. The other type of TEA—high-unemployment TEAs—is the most common type of TEA, but it is more complicated to calculate.

High-unemployment TEAs are defined as any area with an unemployment rate at least 150% of the national average. USCIS accepts two different sources for data when calculating high-unemployment TEA designation: American Community Survey (ACS) five-year census-tract data and Bureau of Labor Statistics (BLS) annual county-level data. Investors can choose to do their calculations with only ACS data, or they can combine ACS five-year census-tract data with the BLS county-level data to get a more accurate representation of the unemployment rate. These two calculation methods often yield different results. This is great for those making an EB5 investment, as they can complete both calculation methods and choose the one that best justifies TEA eligibility for their EB-5 project—which, in some cases, may be only one of them.

The Importance of Timing When Calculating TEA Eligibility

An investor must submit their data and calculations for TEA eligibility with their I-526 petition. USCIS requires that EB-5 investors use the most recent data available when completing TEA calculations. If an area’s unemployment rate changes after an investor files their I-526 petition, the investor can still invest the lower amount required as long as the area qualified for TEA designation when the investor’s I-526 petition was submitted. However, if unemployment data fluctuates prior to an investor filing their I-526 petition, their project’s TEA eligibility could be in jeopardy. Anyone planning an EB-5 investment should be aware of any fluctuating unemployment data and make sure that they plan their calculations and petition filing accordingly.

The Rolling Average Calculation Method

Many investors choose to use the BLS data in their calculation when they need a more precise estimate of unemployment levels because BLS data is published monthly, with a two- or three-month delay, as opposed to ACS data, which is released yearly, showing data for a five-year period. Investors have the option of using BLS’s annual data, which is published every April, or can compile BLS’s monthly released data for a 12-month period for the most accurate and current calculation.

Using this calculation method helps to showcase the most accurate unemployment data. For anyone planning an EB5 investment following the COVID-19 pandemic, this method could be extremely beneficial. Because the BLS data published in April 2020 covers 2019, there is no current data, as of March 2021, that shows the unemployment rates following the pandemic. However, investors can compile the monthly released BLS data to achieve a more accurate representation of unemployment rates following the devastating pandemic.

It is important to note that your calculation method must compare the area’s unemployment rate to the national average for the same period. So, if an investor chooses to compile monthly BLS data for a 12-month period, rather than using the annual publications released every April to calculate the national unemployment average, they must make sure they are comparing it to the national average for the same 12-month period. It is also crucial that investors make sure their calculation uses the most recently available data at the time that they file their I-526 petition. If new data is released prior to filing, they must update their calculation or risk putting their TEA eligibility in jeopardy.

Does TEA Data Have to Cover One Year?

Although it could be beneficial to calculate TEA eligibility with data only covering six months or nine months, or even two months, it is unlikely that USCIS would accept such a calculation. The agency did use an example of a one-month calculation in a question-and-answer article published in March 2020—however, this example does not mean that USCIS sees this as an acceptable calculation method. USCIS requires data spanning 12 months so that the unemployment rate is representative of the area’s actual situation. For this reason, anyone planning to make an EB5 investment in a TEA should opt for the safer choice and use a calculation method known to be acceptable for USCIS.