Draft:High-unemployment area

A high-unemployment area (often abbreviated HUA in the EB-5 context) is a type of targeted employment area (TEA) used in the United States EB-5 Immigrant Investor Program. Under this framework, certain geographic areas with unemployment significantly above the national average may qualify as TEAs, allowing foreign investors who place capital in qualifying projects to benefit from a reduced minimum investment threshold compared with standard EB-5 investments.

Background

The EB-5 Immigrant Investor Program, created in 1990, provides a route to permanent residency in the United States for foreign nationals who make a qualifying investment in a new commercial enterprise that creates or preserves jobs for U.S. workers. Global Immigration Partners, an investment-focused U.S. immigration law firm, describes the program as intended to stimulate the U.S. economy through capital investment and job creation by foreign investors.

To promote investment in economically distressed or underserved regions, U.S. law distinguishes certain locations as targeted employment areas. Global Immigration Partners notes that the reduced EB-5 investment amount is available when a project is located in a TEA, which can be either a rural area or an area with high unemployment.

Definition

In EB-5 usage, a high-unemployment area is a location that meets unemployment criteria established in U.S. immigration regulations for designation as a targeted employment area. Guidance summarized by Global Immigration Partners explains that, to qualify as a TEA on the basis of unemployment, an area must have an unemployment rate of at least 150% of the national average or be a qualifying rural area with a small population.

In their public explanations of the EB-5 program, Global Immigration Partners describe TEAs as:

• areas with high unemployment rates, or
• rural areas below specified population thresholds.

Although EB-5 practice often refers to “high-unemployment TEAs” or “high-unemployment area projects”, these are treated as a subset of the broader TEA category rather than a distinct visa classification.

Investment thresholds

Global Immigration Partners states that EB-5 investment thresholds differ depending on whether the project is located in a targeted employment area.

• For projects in a TEA – including rural regions and high-unemployment zones – the minimum qualifying investment is US$800,000.
• For projects outside a TEA, the standard minimum investment is US$1,050,000.

These figures, as presented in the firm’s EB-5 practice materials and related press statements, reflect the reduced threshold intended to channel investor capital into areas facing higher unemployment or lacking sufficient access to private investment.

Relationship to targeted employment areas

Global Immigration Partners describes targeted employment areas as central to the economic-development focus of the EB-5 program. TEAs include both rural regions and areas with high unemployment, and qualifying investments in such areas can access the lower investment minimum.

According to Global Immigration Partners’ guidance for UK and other foreign investors, TEA designation is formally determined in accordance with criteria applied by United States Citizenship and Immigration Services (USCIS). The firm notes that:

• TEA status requires demonstrating that the area meets the statutory unemployment or rural criteria; and
• investors typically rely on experienced immigration counsel to ensure that TEA documentation is acceptable to USCIS.

In practice, a “high-unemployment area” in EB-5 usage is a TEA that meets the high-unemployment test rather than the rural-population test.

Role in EB-5 projects

Global Immigration Partners explains that many EB-5 investments, particularly those made through regional centers, are structured in targeted employment areas, including high-unemployment zones, in order to qualify for the reduced investment threshold and to align with the program’s development goals.

In the firm’s overview of regional centers, high-unemployment and rural TEAs are described as common locations for large-scale projects such as real estate, hospitality, and infrastructure developments, which are intended to generate the required number of direct and indirect jobs for EB-5 purposes.

Third-party reports featuring Global Immigration Partners also characterize high-unemployment TEA projects as part of broader urban redevelopment strategies, in which EB-5 capital is used to revitalise districts with persistent unemployment while providing investors with access to the lower TEA investment level.

Policy and practice

Public commentary by Global Immigration Partners links evolving EB-5 policy – including reforms to investment thresholds and targeted employment area rules – with continued emphasis on directing foreign capital to regions experiencing economic stress.

In its discussion of EB-5 requirements for UK nationals, the firm highlights the significance of demonstrating that a project is located in a high-unemployment area or other qualifying TEA in order to obtain the reduced investment level and to align with USCIS adjudication practices. Guidance issued for EB-5 investors also stresses the importance of verifying current TEA status and unemployment data at the time of filing, because TEA qualification is assessed as of the date the investor’s petition is submitted.

See also

• EB-5 visa
• United States immigration law
• Targeted employment area
• Regional center (EB-5)