RCBJ Perspectives: What Happens if an Approved EB-5 Project’s TEA Lapses? What Do You Do? How to Fix It?
By Simone Williams-Arrington | Williams Global Law
This article originally appeared in the April 2025 edition of IIUSA’s Regional Center Business Journal.
READ THE FULL SPRING 2025 EDITION OF THE RCBJ
The Targeted Employment Area (TEA) designation is a key factor in the EB-5 Immigrant Investor Program, allowing investors to qualify for a lower investment threshold if they invest in designated high-unemployment or rural areas. TEAs play a crucial role in the program, which was established in 1990, to stimulate economic growth through job creation and capital investment by foreign investors. [1] However, questions arise when a project’s TEA designation lapses before or after investors complete their investment or file their I-526 or I-526E petition, creating potential risks for both investors and project developers. This article explores the implications, risks, and potential solutions for Regional Centers (“RCs”), EB-5 investors and project developers when a TEA status expires or changes.
WHAT IS A TEA AND WHY IS IT IMPORTANT?
The EB-5 Immigrant Investor Program requires immigrant investors to invest a minimum amount of capital in a new commercial enterprise that generates at least 10 jobs for U.S. workers. However, there is an exception for investors who place their capital in businesses operating within a Targeted Employment Area (TEA). TEA investments qualify for a lower capital threshold, making the program more accessible to investors while encouraging economic development in underprivileged areas. [2]
For petitions filed on or after March 15, 2022, the required minimum investment is $1,050,000 and $800,000 if investing in a TEA. These thresholds will automatically increase every five years, with the next adjustment set for January 1, 2027.[3] This adjustment mechanism ensures that investment levels keep pace with economic conditions over time. The U.S. Congress introduced the reduced investment threshold for TEAs to promote investment in economically distressed areas that need job creation the most. For an immigrant investor to qualify for the reduced investment amount, the new commercial enterprise or the job-creating entity must primarily operate within a TEA. [4]
A TEA must fit into one of two categories at the time of investment: rural area or high-unemployment. A rural area is defined as a location outside a metropolitan statistical area (MSA), as designated by the Office of Management and Budget (OMB), and not within the outer boundary of a city or town with a population of 20,000 or more, based on the most recent U.S. decennial census. [5]A high-unemployment area consists of a census tract or contiguous census tracts where the commercial enterprise primarily operates. For high-unemployment areas, the required evidence differs depending on the petition’s filing date. For standalone petitions filed on or after March 15, 2022, the investor must provide a detailed description of census tracts and unemployment statistics for USCIS to determine whether the area qualifies as high unemployment. This data must confirm that the weighted average unemployment rate of the proposed area meets the 150% threshold compared to the national average. [6] To prove that an investment qualifies, the immigrant investor must provide supporting evidence demonstrating the area meets TEA statutory and regulatory criteria.
By structuring the EB-5 program this way, the U.S. government incentivizes foreign investment in regions that require economic stimulation, ensuring that capital infusions translate into job creation and business growth where they are most needed.
LAPSES
A geographic area that once qualified as a TEA may lose its designation over time due to changes in employment rates or population growth. Some immigrant investors request eligibility for the reduced investment threshold based on the fact that previous investors in the same new commercial enterprise qualified for the lower capital investment amount. However, an immigrant investor must demonstrate that the area in question qualified as a TEA at the time of investment or at the time of filing the immigrant petition, as applicable. Investors may not be able to rely on past TEA determinations if the underlying economic conditions have changed.
For petitions filed on or after March 15, 2022, USCIS designations of TEAs remain valid for two years from the investment date for standalone investors or from the date a regional center properly files Form I-956F for regional center investors.[7] These designations may be renewed for additional two-year periods provided that the area continues to meet the TEA criteria at the time the renewal is requested. An immigrant investor who invested the required capital and/or filed their I-526 or I-526E petition while the TEA remained valid does not need to increase their investment if the designation expires after their investment or petition filing.
While an area must qualify as a TEA at the time of investment or Form I-526/I-526E petition filing, it does not need to maintain its TEA status by the time the Form I-829 petition to remove conditions is filed. Even if population growth or employment improvements cause the area to lose its TEA status later, the investor remains eligible, as long as all other conditions were satisfied and the job creation goals were met as a result of the investment. [8]
HOW TO FIX A LAPSED TEA STATUS
If the Targeted Employment Area (TEA) status lapses on your EB-5 Visa investment project, the implications depend on when you made the investment and when you filed your petition. Here’s what you can do in different scenarios:
If TEA Status Changes Before You Make Your Investment and File Your I-526 or I-526E Petition
If the TEA designation changes before a standalone investor’s investment has been made and before submission of the I-526 petition, the standalone investor may need to invest at the standard minimum threshold ($1.05 million) rather than the lower TEA amount. For regional center projects, the investor’s investment must be made or the I-526E petition must be submitted during the 2-year period in which the TEA designation remains valid. Unless the project can re-qualify as a TEA, the investor will have to invest at the higher investment threshold. Regional center investors who invested their funds after the TEA had lapsed and no longer wish to proceed with the EB-5 investment will need to consult their regional center regarding their rights to withdraw from their EB-5 investment partnership.
To avoid issues, if a regional center project’s TEA status is set to lapse soon, investors should complete their investment and/or file their I-526E as soon as possible to lock in the lower investment threshold. For standalone EB-5 investors, it is always recommended to verify the TEA status prior to investing your funds and filing your I-526E, if your project no longer qualifies you will need to either invest at the higher threshold or choose a different qualifying location.
WHAT TO DO NEXT
If a project loses its TEA designation before an investor makes their investment and files their I-526/I-526E, there are a few strategies to address the issue:
- Recalculate TEA Eligibility Using Updated Data
Since TEA status is determined by census data and unemployment rates, a project may still qualify if newer statistics support its designation. Additionally, USCIS permits a weighted average approach, allowing the combining of neighboring census tracts to meet TEA requirements, even if the primary location alone does not qualify. A reconfiguration of the site’s immediately adjacent census tracts may allow the location to continue to meet the high-unemployment area requirements.
- Consider a Rural TEA Designation
If a project is located outside of an MSA and in a city or town with a population less than 20,000, it may qualify for reclassification under a rural TEA designation. This designation allows investors to benefit from the lower $800,000 investment threshold while also receiving priority processing for their applications.
- Move the Project Location
In certain situations, it may be possible for a standalone investor or a developer to move the location of the project to an area that will meet the TEA requirements. However, for regional center projects, if other investors have made their investment and the funds have been spent, this may not be possible.
- Secure Additional Investor Funding
If the TEA status cannot be reinstated, investors considering the EB-5 investment who choose to proceed will be required to increase their investment to $1.05 million to meet the standard EB-5 program requirements.
- Switch to a Different EB-5 Project
If the project you are considering no longer qualifies as a TEA, investors have the option to select another project that remains eligible for TEA status.
If TEA Status Changes After Filing Your I-526 or I-526E Petition
For petitions filed on or after March 15, 2022, USCIS designations of TEAs remain valid for two years from the investment date for standalone investors or from the date a regional center files Form I-956F for regional center investments. USCIS adjudicates I-526E petitions based on the TEA status at the time of investment or the time of filing. If your TEA designation expires after making your investment or filing, you are not required to increase your investment, as long as your area was a TEA at the time of investment or filing. If USCIS challenges the TEA status in a Request for Evidence (RFE), the investor or regional center can submit proof that TEA status was valid at the time of investment or the time of filing.
Further, if the project’s TEA status changes after I-526 or I-526E filing but before I-829 adjudication, it does not impact the investor’s conditional residency. USCIS only considers the TEA at the time of investment or filing, and changes afterward do not affect the investor’s ability to remove conditions on their green card. Investors should proceed with their I-829 petition as normal, providing evidence that the project met TEA requirements at the time of investment.
WHAT TO KEEP IN MIND
Confirm TEA Status Before Investment: Always check the TEA designation before making your investment to ensure eligibility.
File Your I-526 Petition Quickly: If your area qualifies as a TEA, submitting your I-526 petition as soon as possible can help lock in the lower investment threshold.
Consult with an EB-5 Attorney: Immigration and investment laws change frequently, so working with an experienced EB-5 attorney is necessary to navigate any TEA status concerns.
Monitor USCIS TEA Guidelines: Since TEA designations can change every two years, staying informed about policy updates will help you plan accordingly.
While a TEA status lapse may seem concerning, USCIS policies generally protect investors as long as their investment met TEA requirements at the time of investment or filing. Afterall, the goal of the EB-5 program is to promote economic activity and growth in underserved regions. In many cases, areas that were once high-unemployment areas may no longer qualify as high-unemployment, in part, due to the positive impact of the EB-5 investments in that community.
[1] “About the EB-5 Visa Classification.” U.S. Citizenship and Immigration Services, https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/about-the-eb-5-visa-classification
[2] “Immigrant Petition Eligibility Requirements.” Policy Manual Volume 6 (Chapter 2). U.S. Citizenship and Immigration Services. State. Gov, https://www.uscis.gov/policy-manual/volume-6-part-g-chapter-2
[3] “Immigrant Petition Eligibility Requirements.” Policy Manual Volume 6 (Chapter 2). U.S. Citizenship and Immigration Services. State. Gov, https://www.uscis.gov/policy-manual/volume-6-part-g-chapter-2
[4] “About the EB-5 Visa Classification.” U.S. Citizenship and Immigration Services, https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/about-the-eb-5-visa-classification
[5] “About the EB-5 Visa Classification.” U.S. Citizenship and Immigration Services, https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/about-the-eb-5-visa-classification
[6] “Immigrant Petition Eligibility Requirements.” Policy Manual Volume 6 (Chapter 2). U.S. Citizenship and Immigration Services. State. Gov, https://www.uscis.gov/policy-manual/volume-6-part-g-chapter-2
[7] “About the EB-5 Visa Classification.” U.S. Citizenship and Immigration Services, https://www.uscis.gov/working-in-the-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/about-the-eb-5-visa-classification
[8] “Immigrant Petition Eligibility Requirements.” Policy Manual Volume 6 (Chapter 2). U.S. Citizenship and Immigration Services. State. Gov, https://www.uscis.gov/policy-manual/volume-6-part-g-chapter-2
