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[Q] How does USCIS interpret "rural area"?

[Q] Client wants to start new business in a city that has under 20,000 residents, but that city is a part of a Metropolitan Statistical Area. Could this qualify for a $500,000 investment because it qualifies as a "rural area", or does he need to invest $1 million?

Practically speaking, this is how USCIS defines "rural".

The immigration regulations define "rural" as "any area NOT within EITHER a metropolitan statistical area (as designated by the Office of Management and Budget) OR the outer boundary of any city or town having a population of 20,000 or more."

Even though the regulation uses the word "or," the USCIS interprets this definition as meaning that an area must be both OUTSIDE a metropolitan statistical area as defined by Office of Management and Budget and have a population of less than 20,000. This means some truly rural areas cannot qualify as TEAs for EB-5 purposes because they happen to be located in a sprawling MSA. If the USCIS refuses to change its interpretation of the definition, Congress should fix the problem legislatively.

This means if the Metropolitan Statistical Area (MSA) is sprawling and covers a lot of area, and there happen to be pockets of what look like rural areas within the MSA, they will not qualify as "rural areas". This definition sort of defeats the purpose as these pockets are precisely the type of lands which need developing. Anyway, this is another instance where USCIS could have easily and logically arrived at a different conclusion that jibes more reasonably with the real world of commerce.