Exploring Opportunity Zones in North and South America

As part of last year's Tax Cuts and Jobs Act, Congress and the President enacted a reform and stimulus package that introduced what are known as Opportunity Zones. Found all throughout the mainland United States and also encompassing the totality of Puerto Rico, Opportunity Zones are communities, wards, counties, and zip codes designated for investment incentives and fiscal exemptions, mainly through the deferral of capital gains taxes. Though this tax legislation was ushered through Congress in 2017, local policy makers and investors are still largely unfamiliar with the specifics and benefits offered by Opportunity Zones. In some places, state and local governments have begun developing comprehensive prospectuses and basic infrastructure projects in order to draw capital into specific Opportunity Zones. Meanwhile, investors in industries such as manufacturing, real estate development, and agribusiness have started modeling and assessing future investments within Opportunity Zones. Located in predominantly underserved communities, such as recovering Puerto Rico or abandoned inner cities in the Midwest, Opportunity Zones seek to revitalize abandoned infrastructure and spaces by repurposing them for the socioeconomic realities of the 21st century.

Exploring Opportunity Zones in North and South America

Meanwhile, down in Colombia, President Duque is pushing for a very similar initiative as part of the tax reform that he wants to approve next year. Seeking to revitalize Colombia’s agribusiness sector and countryside as well as benefit from the opening up of new regions for economic development, President Duque is pushing for zero taxation on gains from investment in rural regions. Thus, President Duque’s version of Opportunity Zones would be geared specifically towards the rural regions of the country that have traditionally been underserved and were hardest hit by years of conflict.Both in the United States and in Colombia, the idea of Opportunity Zones for tax exempt investment and development seeks to diversify the traditional pool of attractive options available to large and mid-sized investors.(Read more about United States, Mexico, Canada Trade Agreement)