--- title: What Type Of Businesses Can Operate In Opportunity Zones? description: Requirements must be met before a business can qualify as an opportunity zone business. What are they, and what types of businesses can operate in them? image: https://www.realized1031.com/hubfs/Images/photo/abstract/cranes-and-construction-AS-244094814.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - [Wealth Management Gap](https://www.realized1031.com/the-wealth-management-gap) - [Our Process](https://www.realized1031.com/how-realized-works) - [Financial Advisors](https://www.realized1031.com/advisor) - [Resources](https://www.realized1031.com/resources) - [The Company](https://www.realized1031.com/about-us) - [Articles](https://www.realized1031.com/blog) [Register](https://www.realized1031.com/marketplace) [Log In](https://www.realized1031.com/login) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # What Type Of Businesses Can Operate In Opportunity Zones? Posted Feb 10, 2020 ![cranes-and-construction-AS-244094814](https://www.realized1031.com/hs-fs/hubfs/Images/photo/abstract/cranes-and-construction-AS-244094814.jpg?width=650&name=cranes-and-construction-AS-244094814.jpg) Operating a business within an opportunity zone means participating in improving the economic prosperity of a specific area. There are a few requirements that must be met before any business can qualify as an opportunity zone business. In this article, we’ll look at what those qualifications are and the types of businesses that can operate in them. ### What is a Qualified Opportunity Zone Business (QOZB)? A [Qualified Opportunity Zone Fund](https://www.realized1031.com/blog/real-caveats-for-real-estate-qualified-opportunity-funds) (QOZF) can invest in a wide range of products. QOZFs often invest in real estate, which includes [real property](https://www.realized1031.com/blog/keeping-it-real-and-personal-property-that-is) and infrastructure ([except for government-owned infrastructure](https://oz.guide/fundmanagers)). Think of real property like real estate, or, more specifically, land and immovable property on land, such as buildings.  Then there are [qualified opportunity zone businesses (QOZB)](https://www.realized1031.com/glossary/qualified-opportunity-zone-business). QOZBs range in scope, and can include anything from tech start-ups, healthcare research and development firms, and even oil and gas exploration companies. Typically, qualified opportunity funds will invest in one qualifying business, or several that operate within a similar vertical. There are a couple of ways investors and funds can get involved in QOZBs: - Equity investments in new or expanding businesses by purchasing original-issue stock. - Taking ownership of original interests in partnerships. If the above investment approaches look familiar, it’s because they are similar to the style used by venture capitalists. Let’s now shift to the specific requirements needed to qualify as a QOZB. ### Business Requirements There are a few qualifications that businesses must meet to be included in a QOZF. One is the active conduct of business. As laid out by the [treasury](https://www.irs.gov/pub/irs-dft/f8996--dft.pdf), a QOZB must meet the following requirements as well: - Substantially all of the tangible property that is owned or leased is located in an OZ. According to the IRS, substantially all equates to “at least 70%.” - 50% of total income is derived from the active conduct of a qualified business within an OZ. - The [second round of regulations](https://www.realized1031.com/blog/key-takeaways-from-second-round-qoz-regulations) provided a safe harbor that 50% of the business’ services, based on the hours of employees and contractors, that can be done in an OZ. - Less than 5% of the average of the unadjusted aggregate basis of the business’s property must be attributable to non-qualified financial property. - At least 40% of the business’s intangible property must be used in the active conduct of a qualified business in an OZ. ### Types Of Businesses That Are Not Eligible Any business type that meets the above requirements and is [not one of the following](https://www.irs.gov/pub/irs-pdf/i8996.pdf) is eligible: Not a private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or other facility used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off-premises. There are several requirements for a business to successfully operate in an opportunity zone as a qualified business. With the second round of regulation updates, the IRS has shed more light on these requirements, making them clearer for investors who want to get involved.  This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Download The Guide To Opportunity Zones [![Download The Guidebook to QOZ's](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/QOZ-eBook-250.png?width=250&height=250&name=QOZ-eBook-250.png "Learn More About Qualified ...") ](https://www.realized1031.com/blog/what-type-of-businesses-can-operate-in-opportunity-zones#blogform) Download eBook ---   --- ### Download The Guidebook to QOZ's ![Download The Guide To Opportunity Zones](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/QOZ-eBook-550.jpg?width=550&height=650&name=QOZ-eBook-550.jpg) Learn More About Qualified Opportunity Zones Investments. By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received. Search ### [Why Realized](https://www.realized1031.com/why-realized) - [Wealth Management](https://www.realized1031.com/the-wealth-management-gap) - [Why Realized](https://www.realized1031.com/why-realized) - [Our Process](https://www.realized1031.com/how-realized-works) - [Scenarios](https://www.realized1031.com/scenarios) - [Private Client Program](https://www.realized1031.com/private-client) - [Realized Exchange Services](https://www.realized1031.com/realized-exchange-services) ### [The Company](https://www.realized1031.com/about-us) - [The Team](https://www.realized1031.com/about-us) - [FAQ](https://www.realized1031.com/frequently-asked-questions) - [Testimonials](https://www.realized1031.com/testimonials) - [Press](https://www.realized1031.com/press) - [Careers](https://www.realized1031.com/careers) ### [Partners](https://www.realized1031.com/partners) - [Financial Advisors](https://www.realized1031.com/advisor) - [Broker Dealers](https://www.realized1031.com/partners/broker-dealers) - [Real Estate Agents](https://www.realized1031.com/partners/real-estate-agents) - [Certified Public Accountants](https://www.realized1031.com/partners/certified-public-accountants) ### [Resources](https://www.realized1031.com/resources) - #### Learn - [Articles](https://www.realized1031.com/blog) - [Glossary of Terms](https://www.realized1031.com/glossary) - [Capital Gains Tax Rates](https://www.realized1031.com/capital-gains-tax-rate) - #### Watch - [Video Library](https://www.realized1031.com/videos) - [Webinar Archive](https://www.realized1031.com/webinars) - #### Read - [Delaware Statutory Trust](https://www.realized1031.com/delaware-statutory-trust) - [Tenants-In-Common](https://www.realized1031.com/tenants-in-common-tic) - [1031 Exchange](https://www.realized1031.com/1031-exchange) - [Qualified Intermediary](https://www.realized1031.com/qualified-intermediary) - [Qualified Opportunity Zones](https://www.realized1031.com/opportunity-zones) #### Realized - 500 W 13th Street Austin, TX 78701 - (877) 797-1031 ##### [Contact Us](https://www.realized1031.com/contact-us) - [![Realized on Facebook](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-facebook-whiterev.png?width=60&height=60&name=social-facebook-whiterev.png)](https://www.facebook.com/Realized/) - [![Realized on LinkedIn](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-linkedin-whiterev.png?width=60&height=60&name=social-linkedin-whiterev.png)](https://www.linkedin.com/company/realized/) - [![Realized on YouTube](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-youtube-whiterev.png?width=60&height=60&name=social-youtube-whiterev.png)](https://www.youtube.com/c/Realized1031?sub_confirmation=1) - [![Realized Holdings, Inc. BBB Business Review](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/bbb/RZH2-bbb-seal.png?width=40&height=65&name=RZH2-bbb-seal.png)](http://www.bbb.org/central-texas/business-reviews/real-estate-investors/realized-holdings-llc-in-austin-tx-1000112948/#bbbonlineclick) - [![FEA Logo](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/fea/RZH2-fea-logo.png?width=82&height=65&name=RZH2-fea-logo.png "FEA Logo")](https://www.1031.org) SECURITIES DISCLOSURE Realized1031.com is a website operated by Realized Technologies, LLC, a wholly owned subsidiary of Realized Holdings, Inc. (“Realized Holdings”). Securities and/or Investment Advisory Services may be offered through Registered Representatives or Investment Advisor Representatives of Realized Financial, Inc. ("Realized"), a broker/dealer, member [FINRA](https://www.finra.org)/[SIPC](https://www.sipc.org/), and registered investment adviser. Realized is a subsidiary of Realized Holdings, Inc. ("Realized Holdings"). Check the background of this firm on [FINRA's BrokerCheck](https://brokercheck.finra.org/firm/summary/22333). Hypothetical example(s) are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment. Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested. This site is published for residents of the United States who are accredited investors only. Registered Representatives and Investment Advisor Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all of services referenced on this site are available in every state and through every representative listed. For additional information, please contact the Realized Compliance department at 512-472-7171 or info@realized1031.com. - [Terms & Conditions](https://www.realized1031.com/terms-and-conditions) - [Privacy Policy](https://www.realized1031.com/privacy-policy) - [Form CRS](https://www.realized1031.com/hubfs/common-files/disclosures/FormCRS.pdf) - [ADV 2A](https://www.realized1031.com/hubfs/common-files/disclosures/ADV2A.pdf) - [Reg BI Disclosures](https://www.realized1031.com/hubfs/common-files/disclosures/RegBI.pdf) -   © 2026 Realized Holdings, Inc. ```json { "@context" : "http://schema.org/", "@type" : "BlogPosting", "articleBody" : "Operating a business within an opportunity zone means participating in improving the economic prosperity of a specific area. There are a few requirements that must be met before any business can qualify as an opportunity zone business. In this article, we’ll look at what those qualifications are and the types of businesses that can operate in them. What is a Qualified Opportunity Zone Business (QOZB)? A Qualified Opportunity Zone Fund (QOZF) can invest in a wide range of products. QOZFs often invest in real estate, which includes real property and infrastructure (except for government-owned infrastructure). Think of real property like real estate, or, more specifically, land and immovable property on land, such as buildings. Then there are qualified opportunity zone businesses (QOZB). QOZBs range in scope, and can include anything from tech start-ups, healthcare research and development firms, and even oil and gas exploration companies. Typically, qualified opportunity funds will invest in one qualifying business, or several that operate within a similar vertical. There are a couple of ways investors and funds can get involved in QOZBs: Equity investments in new or expanding businesses by purchasing original-issue stock. Taking ownership of original interests in partnerships. If the above investment approaches look familiar, it’s because they are similar to the style used by venture capitalists. Let’s now shift to the specific requirements needed to qualify as a QOZB. Business Requirements There are a few qualifications that businesses must meet to be included in a QOZF. One is the active conduct of business. As laid out by the treasury, a QOZB must meet the following requirements as well: Substantially all of the tangible property that is owned or leased is located in an OZ. According to the IRS, substantially all equates to “at least 70%.” 50% of total income is derived from the active conduct of a qualified business within an OZ. The second round of regulations provided a safe harbor that 50% of the business’ services, based on the hours of employees and contractors, that can be done in an OZ. Less than 5% of the average of the unadjusted aggregate basis of the business’s property must be attributable to non-qualified financial property. At least 40% of the business’s intangible property must be used in the active conduct of a qualified business in an OZ. Types Of Businesses That Are Not Eligible Any business type that meets the above requirements and is not one of the following is eligible: Not a private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or other facility used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off-premises. There are several requirements for a business to successfully operate in an opportunity zone as a qualified business. With the second round of regulation updates, the IRS has shed more light on these requirements, making them clearer for investors who want to get involved. This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor.", "articleSection" : [ "Qualified Opportunity Zones" ], "author" : { "@type" : "Person", "email" : "marketing@realized1031.com", "image" : "", "name" : "The Realized Team", "url" : "https://www.realized1031.com/blog/author/the-realized-team" }, "dateModified" : "2020-12-03T16:07:04+0000", "datePublished" : "2020-12-03T16:07:04+0000", "description" : "Requirements must be met before a business can qualify as an opportunity zone business. What are they, and what types of businesses can operate in them? \n", "headline" : "What Type Of Businesses Can Operate In Opportunity Zones?", "image" : { "@type" : "ImageObject", "height" : 255, "url" : "https://cdn2.hubspot.net/hubfs/733513/Images/photo/abstract/cranes-and-construction-AS-244094814.jpg", "width" : 650 }, "mainEntityOfPage" : "https://www.realized1031.com/blog/what-type-of-businesses-can-operate-in-opportunity-zones", "name" : "What Type Of Businesses Can Operate In Opportunity Zones?", "publisher" : { "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "USA", "addressLocality" : "Austin", "addressRegion" : "TX", "postalCode" : "78701", "streetAddress" : "500 W 13th Street " }, "logo" : { "@type" : "ImageObject", "height" : 60, "url" : "http://www.realized1031.com/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black-No-Margin-296x60-AMP.png", "width" : 296 }, "name" : "Realized" }, "thumbnailUrl" : "https://cdn2.hubspot.net/hubfs/733513/Images/photo/abstract/cranes-and-construction-AS-244094814.jpg" } ```