EB-5 Targeted Employment Area Designation Changes

EB-5 Targeted Employment Area Designation Changes

EB-5 Visa, EB5 Visa, EB5 Investments

In addition to raising the EB-5 Program minimum investment amounts, the new EB-5 Modernization Regulation that went into effect on November 21, 2019, changed how targeted employment areas are designated.

Here is a very basic overview of how targeted employment areas have changed and what this means for investors.

1. Targeted employment areas (TEA) will no longer be designated by states but by the Department of Homeland Security (DHS). Investors will need to provide evidence that the EB-5 project is in an eligible TEA area and qualifies for the lower minimum investment amount of $900,000. Prior to the this new rule, states could issue letters designating projects.

The burden now lies on the investor to provide sufficient evidence that the project’s location qualifies as a high unemployment area. DHS states that unemployment data taken from the U.S. Census Bureau’s American Community Survey and Bureau of Labor Statistics is a reliable and verifiable data sources for investors filing petitions.

2. When aggregating tracts to form a TEA, only tracts that directly touch the project tract will be allowed to be included. Basically, only the project tracts and some or all of the adjacent project tracts will be eligible for use. Only census tracts will be used, census block groups will no longer be used. These changes may reduce the number of TEA possible.

Impact on Investors

1. The onus is now on the investor to provide evidence that a project qualifies as a targeted employment area. They may need to hire another EB-5 professional to their team to assist with creating a report showing that the project is eligible for TEA designation when filing their I-526 Petition.

2. Investors now have to face TEA uncertainty. They no longer get the benefit of being having a state letter of TEA designation prior to making their EB-5 investment and filing their petition. Instead they must rely on a third-party report that may or may not meet the burden of evidence and result in TEA designation.

3. What this also means for investors is that when looking for EB-5 projects to invest their capital in, projects in desirable locations that once qualified for the lower rate (previously $500,000 now $900,000) may no longer qualify for that rate. Investors may have to invest at the $1.8 million amount rate (previously $1 million) for those same project locations.


Interested investors should begin consulting with regional centers as well as EB-5 professionals to start the process early. Seasoned regional centers with multiple project offerings may be able to assist investors with finding a project that suits their needs.

Note: The EB-5 Regional Center Program has been extended to December 20, 2019. Investors can file petitions for the next several weeks and likely longer if Congress further extends the program into 2020 with the next government spending bill.



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