Two weeks ago on November 21, 2019, the EB 5 Modernization Regulation went into effect, not only changing the minimum investment amounts, but also how targeted employment areas (“TEAs”) are designated. Below is a very basic overview of how TEAs have changed and how it affects EB-5 investors:
- TEAs will now be designated by the Department of Homeland Security (“DHS”) instead of each individual state. Investors will also need to provide sufficient evidence that the EB-5 project is located in an eligible TEA and qualifies for the lower minimum investment amount of $900,000.
- When aggregating census tracts to form TEAs, only tracts that directly touch the project tract can qualify as a TEA project. Further, only census tracts will be used, and census block groups will no longer be used when determining TEAs. These changes may reduce the number of TEAs possible.
Impact on Investors
- Responsibility: Investors now have responsibility of providing evidence that a project qualifies as a TEA. This could entail hiring an EB-5 professional to assist with creating a report showing that the project is eligible for TEA designation when filing their I-526 Petition.
- TEA Uncertainty: Investors no longer get the benefit of 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 to show evidence of TEA designation.
- Project Location: Investors looking for EB-5 projects may need to choose different project locations to qualify for the TEA rate, as projects in desirable locations that once qualified for the lower rate (previously $500,000 and now $900,000) may no longer qualify for that rate.
We Are Here to Serve You
Since 2011, our EB-5 team at Christian Tyler Properties, with our partners, have helped scores of foreign investors successfully navigate complex immigration challenges. Our investment team includes MBAs, CFAs, transactional attorneys, and commercial real estate developers. In addition, we maintain relationships with the leading EB-5 law firms to ensure compliance with current USCIS policy and guidelines such as those outlined above. Our trusted lawyers include Meyer Law Group, EXEO Attorneys, Saul Ewing Arnstein & Lehr, Hirson & Partners, and Baker Dunelson and others.
Our office will continue to monitor and report on policy changes, but please reach out to us if you have any questions. We are here to serve you.