The EB-5 Investment Amounts, Targeted Employment Areas and Set Aside Categories

Location and Investment Amount

The location of the project or business determines how much capital can be raised from each EB-5 investor. Projects that are located in so-called “targeted employment areas” (TEAs) have a lower investment minimum for prospective investors ($800,000 per investor).

For all non-TEA locations, the minimum investment for each EB-5 investor is $1.05 million. While the higher investment amount is attractive for businesses raising capital, projects that qualify for the lower investment amount are far more appealing to investors. TEA projects tend to be more successful in the EB-5 market because of the reduced difficulties in marketing a million dollar investment opportunity. 

Set Aside Categories

The EB-5 program reserves visas for projects that are located in TEAs, which is appealing to investors from countries with long visa backlogs. The rural reserved visa allows for premium processing on immigration petitions as well, which is a great marketing tool for developers with qualifying projects. 

Following the passage of the Reform and Integrity Act of 2022, the annual EB-5 visa allowance is now divided amongst the four EB-5 visa classifications: unreserved, rural, high-unemployment, and infrastructure investments, with 68% of these visas available to the “unreserved” EB-5 category and 32% reserved for the other set-aside EB-5 categories.

The set aside categories are reserved for investors in infrastructure projects, or projects based within a high unemployment or rural area. The incentive to develop and invest in set aside categories is a limited pool of visas with a smaller pool of applicants, as well as a lower minimum investment amount. 

Having a regional center operating within a TEA is one of the most ideal arrangements for developers, given that EB-5 investors will seek out the lower investment minimum provided by TEA projects and the coveted reserved visas that come with them. 

Targeted Employment Areas

Since the EB-5 program was created to stimulate economic growth, the program is structured to provide an extra level of incentive for those who direct their investments to areas with poor economic performance. This way, not only does the US improve its economic growth, but areas where that growth is needed most get more investment.

A targeted employment area is defined as an area that is either rural, or has experienced high unemployment. TEAs are NOT regional center designations, but rather a geographic area that can overlap with a regional center’s area of operation. The “area” can be a single census tract, or adjacent census tracts in which the new commercial enterprise is principally doing business. There are various maps and tools published online that can estimate a project’s location as a TEA, but the ultimate authority in determining which projects are in TEAs is USCIS. It is best to refer to these tools in the early due diligence process of setting up a project for an EB-5 capital raise.

TEAs are designated by USCIS based upon economic reports, census tracts, and other demographic surveys, yet, the Department of Homeland Security makes the final decision on a TEA designation. 

Rural TEAs

The EB-5 program regulations define a rural area as any area other than an area within a metropolitan statistical area (MSA) or within a city or town that has a population of 20,000 or less. The former portion of this definition is important as many areas that may seem rural due to a low population may not qualify as a rural TEA if they are considered part of a larger MSA. These types of projects are eligible for priority processing on their petitions and 20% of the total visa pool is available for rural investments, making them attractive investment opportunities. USCIS has yet to issue any statement on priority processing being used in practice, or demonstrate any pattern of priority processing for rural projects.

High Unemployment TEAs

A high unemployment area is defined as an area that has experienced an unemployment rate of at least 150% of the national average. These types of investments have 10% of the EB-5 visa pool reserved for them. The “area” can be a single census tract, or adjacent census tracts in which the new commercial enterprise is principally doing business. There are various maps and tools published online that can verify a project’s location as a TEA, but the ultimate authority in determining which projects constitute TEAs is USCIS. It is best to refer to these tools in the early due diligence process of setting up a project for an EB-5 capital raise. TEA status for high unemployment lasts two years and can be renewed through USCIS.

TEA status is not infinite and will change, given the shifting nature of unemployment statistics and economic reports. TEAs will be valid for an EB-5 petition if the TEA status is valid when the investor’s entire investment is within the RC’s escrow account, or when their I-526 is approved- whichever comes first.

Infrastructure Projects

USCIS defines an “infrastructure project” as a capital investment project which is “administered by a government agency” (federal, state, or local offices all count) and plans to solicit capital and create jobs while “maintaining, improving, or constructing a public works project”. As of 6/15/23, there have been no infrastructure projects promoted by a government agency in the EB-5 program. This may be because there is currently no clarity regarding what requirements must be met to qualify as “infrastructure” or if government sponsorship is necessary to proceed with an infrastructure offering. Additionally, it is unclear whether infrastructure offerings must be publicly funded, or if private routes are viable as well.