Rural vs. Urban EB-5 Investment: Understanding The Difference

The EB-5 Immigrant Investor Program offers a path to U.S. permanent residency through strategic investments in job-creating industries. Within this program, investors have the option to choose between rural and urban EB-5 investment projects, each with its own set of characteristics and potential benefits. Understanding the differences between rural vs urban EB-5 investments can help potential investors make informed decisions that align with their immigration and financial goals.

What Is Rural EB-5 Investment?

Rural EB-5 investments are EB-5 projects located in areas outside of Metropolitan Statistical Areas (MSAs) or within MSAs with populations under 20,000. The primary goal of these investments is to spur economic development and job creation in underdeveloped regions across the U.S. To encourage more investment in rural areas, the EB-5 minimum investment requirement is set at $800,000.

Rural EB-5 investments typically focus on sectors such as hospitality and tourism, recreational, educational, agricultural, manufacturing, or resource-based industries.

What Is Urban EB-5 Investment?

Urban EB-5 investments are projects located in more densely populated areas, typically within major cities or their surrounding metropolitan regions. These investments often focus on real estate development, large-scale manufacturing or industrial facilities, and technology-based industries.

Like with rural EB-5 investments, urban EB-5 investments can qualify for the lower minimum investment threshold of $800,000 and a reserved visa set-aside category, in this case for high unemployment areas (HUAs), if the urban EB-5 project is located in a Target Employment Area (TEA). Historically, all of Behring’s EB-5 projects have qualified for the high unemployment area TEA designation and the minimum EB-5 investment threshold.

Benefits of Urban EB-5 Investments Over Rural EB-5 Investments

Urban EB-5 investments present several advantages over their rural counterparts:

• Economic stability: Urban areas generally benefit from more diversified and robust economies. A broader economic base can provide greater stability and resilience during market fluctuations or economic downturns. In an urban setting, industries such as real estate, finance, technology, healthcare, and entertainment coexist, reducing reliance on any single sector. This economic variety serves as a buffer against industry-specific challenges, regulatory changes, or market shifts that could disproportionately affect rural EB-5 projects with a single-industry-focus.
• Infrastructure and resources: Urban EB-5 projects are supported by well-developed infrastructure, which may lead to shorter project timelines and reduced logistical challenges.  Existing transportation networks, reliable utilities, and access to essential services are major advantages of urban areas. Additionally, cities provide a larger pool of skilled labor and professional services, making it easier to attract talent and suppliers.
• Market demand: Urban areas inherently have a higher demand for goods and services due to their large and dense populations. This translates to stronger customer bases, greater foot traffic for commercial projects, and more consistent demand for housing, retail, and office spaces. In wealthier urban regions, higher income per capita can increase the purchasing power of local residents, creating more robust and profitable market opportunities for EB-5 projects.
• Exit strategies: One of the most significant advantages of urban EB-5 investments is the availability of more liquid markets, which can provide smoother exit strategies. Urban areas tend to have more active real estate markets with a higher volume of buyers, sellers, and investors. This makes it easier for projects to find buyers or investors when it’s time to exit, whether through selling, refinancing, or transitioning ownership.

The Perceived Advantages of Rural EB-5 Investments and Common Misconceptions

When considering the EB-5 Immigrant Investor Program, many investors are drawn to rural EB-5 projects due to several perceived advantages. These advantages often include a lower investment threshold, faster processing times, and the ability to file applications concurrently. However, some of these perceived benefits come with important caveats that investors should be aware of. In fact, urban EB-5 projects can offer many of the same advantages, often with greater economic stability. Below, we break down the common perceptions about rural EB-5 investments and clarify the facts.

• Lower Investment Threshold: While it’s widely known that rural EB-5 investments qualify for the lower minimum investment amount of $800,000, many investors are unaware that urban EB-5 projects can also qualify for this same threshold. If an urban EB-5 project is located in a Targeted Employment Area (TEA), such as Behring’s RISE Fund project, it too qualifies for the lower investment requirement. This misconception often leads investors to assume rural projects are the only option for a lower investment threshold, when in reality, urban opportunities can be just as accessible.
• Rural Set–aside Category is Current: It is true that the EB-5 reserved set-aside category for rural EB-5 projects is current, allowing investors to file both the I-526E application and I-485 adjustment of status simultaneously. However, many investors don’t realize that urban projects in high unemployment areas (HUAs) also have their own reserved set-aside category, which is also current. This means that investors who file applications with qualifying urban EB-5 investments can also concurrently file their I-526E and I-485 forms and obtain Employment Authorization Documents (EADs) and Advanced Parole in as little as three months, making urban investments equally advantageous in this regard.
• Faster Processing Times? The primary perceived benefit of rural EB-5 investments is that they offer faster processing times for EB-5 visa petitions. The expectation is that USCIS prioritizes processing rural EB-5 filings, allowing investors to obtain their green cards more quickly. However, recent data challenges this assumption. Behring’s analysis of FOIA data reveals that rural EB-5 projects are not consistently delivering on the promise of faster processing times. While rural projects may theoretically be prioritized, in practice, processing backlogs and other bureaucratic hurdles still affect both rural and urban EB-5 applications similarly. Investors looking to rural projects purely for quicker green card approval may need to adjust their expectations and recognize that the perceived speed advantage may not be as substantial as advertised.

Choosing Between Rural vs. Urban EB-5 Investments: Which EB-5 Investment Is Right for You?

Deciding between rural vs. urban EB-5 investments comes down to understanding your financial goals and risk tolerance. While rural projects may seem appealing due to their perceived advantages—such as a lower investment threshold and potentially faster processing times—urban EB-5 investments can offer similar benefits with the added security of more diversified economies, more robust infrastructure, and higher demand for goods and services.

Urban projects, particularly those in Targeted Employment Areas (TEAs), often qualify for the same lower investment amount as rural projects and provide the ability to take advantage of concurrent filing, while providing greater stability and clearer exit strategies. Furthermore, the assumption that rural EB-5 applications are processed faster has been challenged by recent data, which shows that both urban and rural projects face similar bureaucratic hurdles.

Ultimately, choosing the right EB-5 investment depends on balancing these factors with your personal immigration and financial objectives. Whether you opt for a rural or urban EB-5 project, it’s important to conduct thorough research, evaluate the project’s job creation potential, and consider the long-term economic viability of the region in which you are investing.

At Behring Co., we specialize in urban EB-5 investments that capitalize on the strengths of dynamic metropolitan areas. Our EB-5 projects are designed to satisfy all EB-5 program requirements while mitigating investment risk through industry leading protections and guarantees. Ready to learn more about how urban EB-5 investments can align with your immigration and financial goals? Contact us today for a personalized consultation and take the first step towards your new future.