Sam Silverman is the Managing Partner of EB5AN—a national EB-5 visa firm with 2,300+ foreign investors from 60+ countries.
I have previously examined how rural EB-5 projects can be used as an avenue for foreign nationals to qualify for permanent green cards in exchange for their investment.
When it comes to qualifying investments, EB-5 offers the option of targeted employment areas (TEAs), which are either designated rural areas or regions with high unemployment rates.
In this article, I will explore the differences between rural and high-unemployment EB-5 projects (also called “urban” TEAs) for prospective investors, each with its own set of considerations. But first, let’s start by looking at the advantages of investing in targeted employment areas in general.
Reserved Visa Set-Asides
The main benefit of investing in a TEA project is the investment amount. Both urban (high-unemployment) and rural TEA investments qualify for the reduced $800,000 threshold, compared to the standard $1,050,000 required for projects outside TEAs.
In addition to a lower investment threshold, TEA projects also offer important visa allocation advantages. The rural category of TEAs receives 20% of the reserved visas, while the high-unemployment category is allocated 10%. For investors from countries with EB-5 visa backlogs, such as China and India, set-aside EB-5 visas significantly help avoid long delays.
It’s important to understand that each participating country is limited to 7% of annual visas, so this is why high-demand nations like China and India often face long waiting periods due to application backlogs.
However, future backlogs are also expected in these reserved categories, as per the State Department’s January Visa Bulletin warning. This means that even under reserved rural and urban TEA categories, new investors may face backlogs soon.
Visa retrogression might become more of an issue for Indian and Chinese applicants who invest under the high-unemployment category due to its more limited availability.
Urban Versus Rural EB-5 Projects
An urban or high-unemployment TEA is an area with an unemployment rate of at least 150% of the national average. On the other hand, a rural targeted employment area must have a population of 20,000 or fewer based on the most recent decennial census, must not border a municipality with more than 20,000 residents and must be outside a metropolitan statistical area.
The main advantage of rural TEA investments is generally faster processing times since they benefit from priority processing, a policy introduced by the EB-5 Reform and Integrity Act of 2022 (RIA).
Before the RIA, I-526 petitions faced lengthy processing times. According to USCIS data, most non-Chinese petitions filed before the RIA took nearly five years to process, and I have seen Chinese petitions faced with even longer waits of over seven years.
However, post-RIA, USCIS now processes rural EB-5 petitions on a priority basis over other EB-5 petitions. In addition to the rural set-aside visa quota explained above, this development provides unprecedented timeframes for rural EB-5 petitions based on my observations as the managing partner of an EB-5 firm.
Immigration And Financial Risk Tolerance
For U.S.-based investors from low-demand countries, concurrent filing for adjustment of status can provide a significant advantage, allowing them to remain in the U.S. legally while their EB-5 petitions are processed. Available to investors under both rural and urban categories, this option enables them to obtain work and travel authorization while waiting for their green card, reducing the urgency of faster processing times.
Since rural EB-5 projects receive priority processing while high-unemployment TEA projects do not, investors who qualify for concurrent filing and are not at risk of visa retrogression due to high demand may be less concerned about processing speed.
Additionally, some high-unemployment TEA projects may be located in more established areas that feel familiar to certain investors. For those who prioritize location and familiarity over faster processing, these projects can be an appealing option. If their country has no visa backlog risks, these investors can comfortably wait for their green cards while taking advantage of the benefits that come with concurrent filing, making high-unemployment TEA projects a viable option.
Overall, an investor’s risk tolerance shapes their preference for rural or urban EB-5 projects; risk-averse investors often favor rural projects for faster processing, while those more comfortable with risk may opt for urban projects. Cultural and regional factors also play a role; I find investors from stable economies tend to be more relaxed whereas those from uncertain markets may prioritize speed.
The expected retrogression in urban categories has also driven more interest in rural projects.
How To Choose The Best Option For Yourself
When choosing between rural and urban EB-5 projects, investors should consider factors such as processing times, backlog risks and personal circumstances.
While rural projects are becoming increasingly popular, for U.S.-based investors from low-demand countries who can benefit from concurrent filing and are less concerned about waiting for their physical green cards, high-unemployment TEA projects may still be an attractive option. That said, I would generally not recommend this route for Indian or Chinese investors due to the higher risk of visa retrogression.
Ultimately, the choice between rural and urban EB-5 investments depends on an investor’s financial and immigration goals. The best approach is to consult experienced EB-5 professionals and a knowledgeable immigration attorney who can guide you through the details of your case and help you make an informed decision.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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