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Having a cup of "TEA" in "Regional Center" is the best
This article will explain why having a TEA in the Regional Center is the best kind of EB-5 project for EB-5 investors. As you should know, the Targeted Employment Area (TEA) concept allows $500,000 USD investment rather than the regular $1 Million USD. That's a big difference. Also, the Regional Center (RC) concept allows the requisite job-creation to be indirect and induced, as well as direct. Combining the two concepts, you get a EB-5 project that requires $500,000 USD and allows job-creation to take place through directly and indirectly, but sometimes all indirectly.
Now, the problem is setting up a EB-5 project that can really deliver the above two benefits associated with TEA and RC. Let's call this "TEA-RC" benefit to make it sound cool. One good thing is that most regional centers combine the TEA-RC features.
TEA feature is something that is found the way it is: a regional center does not make the TEA; either it is or not, the only question being how one needs to evidence TEA. In contract, the RC is a benefit obtained through effort. If the EB-5 project is in TEA area at the time of I-526 approval, then the subsequent change in TEA status will not affect the TEA classification. There could well be the situation where a specific area was a TEA at the time of I-526 approval, but afterwards, the area no longer qualifies as a TEA. That change will not adversely affect you, and you will not have to put in additional $500,000 USD.
Let's examine the regulatory definition of TEA.
Targeted employment area
means an area which, at the time of investment, is a rural area or an area which has experienced unemployment of at least 150 per cent of the national average rate.
means any area not within either a metropolitan statistical area (as designated by the Office of Management and Budget) or the outer boundary of any city or town having a population of 20,000 or more.
Therefore, an area can be a TEA either by being "rural" area or by being "an area which has experienced unemployment of at least 150 per cent of the national average rate". A "rural" area is outside a metropolitan statistical area (as designated by the OMB), or the outer boundary of any city or town, having a population of 20,000 or more." This is a convoluted definition of a "rural" area, because it entails knowing "metropolitan statistical area" and what is "outer boundary of any city or town having a population of 20,000 or more".
How do you show that the new commercial enterprise has created or will create employment in a TEA? 8 CFR 204.6(j)(6), quoted below, offers some guidance.
If applicable, to show that the new commercial enterprise has created or will create employment in a targeted employment area, the petition must be accompanied by:
(i) In the case of a rural area, evidence that the new commercial enterprise is principally doing business within a civil jurisdiction not located within any standard metropolitan statistical area as designated by the Office of Management and Budget, or 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; or
(ii) In the case of a high unemployment area:
(A) Evidence that the metropolitan statistical area, the specific county within a metropolitan statistical area, or the county in which a city or town with a population of 20,000 or more is located, in which the new commercial enterprise is principally doing business has experienced an average unemployment rate of 150 percent of the national average rate; or
(B) A letter from an authorized body of the government of the state in which the new commercial enterprise is located which certifies that the geographic or political subdivision of the metropolitan statistical area or of the city or town with a population of 20,000 or more in which the enterprise is principally doing business has been designated a high unemployment area. The letter must meet the requirements of 8 CFR 204.6(i).
What requirements must be met by such letter per 8 CFR 204.6(i)? Let's examine the regulation 8 CFR 204.6(i).
(i) State designation of a high unemployment area. The state government of any state of the United States may designate a particular geographic or political subdivision located within a metropolitan statistical area or within a city or town having a population of 20,000 or more within such state as an area of high unemployment (at least 150 percent of the national average rate). Evidence of such designation, including a description of the boundaries of the geographic or political subdivision and the metho d or methods by which the unemployment statistics were obtained, may be provided to a prospective alien entrepreneur for submission with Form I-526. Before any such designation is made, an official of the state must notify the Associate Commissioner for Examinations of the agency, board, or other appropriate governmental body of the state which shall be delegated the authority to certify that the geographic or political subdivision is a high unemployment area.
Our complaint is that when foreign investors want to invest in the U.S., the U.S should be easy to find out which area is TEA and not TEA. It doesn't take genius to spur more investments and create more jobs in the U.S., but nothing is being done to make it easier to accomplish these objectives.
Practically speaking, this is how USCIS defines "rural".
The immigration regulations define "rural" as "any area NOT within EITHER a metropolitan statistical area (as designated by the Office of Management and Budget) OR the outer boundary of any city or town having a population of 20,000 or more." Even though the regulation uses the word "or," the USCIS interprets this definition as meaning that an area must be both OUTSIDE a metropolitan statistical area as defined by Office of Management and Budget and have a population of less than 20,000. This means some truly rural areas cannot qualify as TEAs for EB-5 purposes because they happen to be located in a sprawling MSA. If the USCIS refuses to change its interpretation of the definition, Congress should fix the problem legislatively.