EB-5 investments are either $1,000,000 or $500,000 depending upon whether an investor can demonstrate that a project is located in a rural area or an area which has experienced unemployment of at least 150% of the national average rate. These geographical areas are known as “Targeted Employment Areas” or TEAs. It is a popular misperception that Regional Center projects are always $500,000. It is simply that most centers have sought approval in TEAs.
To determine if the project qualifies for the reduced $500,000 investment amount there are a few simple ways to check:
To demonstrate that you are in a rural area you will need to establish that the project is:
• Not located within any standard metropolitan statistical area (MSA); and
• Not located within any city or town having a population of 20,000 or more as based on the most recent decennial census of the United States.
The Census Bureau maintains two helpful websites to assist you in making this determination. The first provides maps of MSAs by state. The second, known as the American Fact Finder, allows individuals to enter a street address to determine if the location is rural.
If the project is not located in a rural area, applicants will need to determine if it is a Targeted Employment area. To qualify for a TEA you will need to establish that the project is:
• Located within a MSA; and
• Located in an area that has experienced an average unemployment rate of 150% of the national average.
Unemployment rates are listed on the Bureau of Labor Statistics’ website. Some state agencies also list unemployment data by either county, city or census tracts on their websites. These include:
In some instances, you may also need to work with your economist to contact the appropriate state agency to issue a TEA certification letter in support of the EB-5 petition.