Opportunity Zone Magazine Opportunity Zone Magazine Volume 1, Issue 1 | Page 26

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OPPORTUNITY ZONE MAGAZINE | VOLUME 1
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ISSUE 1
IMPACT OF THE OPPORTUNITY ZONES
Investment in companies located in Opportunity Zones
may present tremendous benefits to both investors and
the communities in which in such companies are located.
However, a n investment in a QOF entails a number
of cascading eligibility requirements with which both
investors and companies must familiarize themselves.
Notably, QOFs must invest in QOZ Businesses, and QOZ
Businesses must meet the tangible property tests applicable
to QOZ business property on the date of investment
and throughout the life of the QOF. In addition, QOFs
themselves entail certain unresolved complexities that
surround exit by the investor, and may require the use
of subsidiary investment entities or multi-class equity
structures. As the QOZ investment landscape takes shape,
it is the investors which master these requirements that
will ultimately gain the greatest access to the opportunities
afforded by the Opportunity Zone regime.
R ichard S hamos is counsel in the investment funds practice
group at Sadis. Shamos advises financial services firms on the
structuring and distribution of investment funds, including hedge
funds, private equity funds, real estate funds, registered funds
and sub-advised products. Shamos specializes in customized
investment fund structures involving alternative asset classes,
cross-border fund structuring and distribution, and international
taxation and securities law issues. Shamos is a member of the
firm’s Opportunity Zones working group and regularly advises
sponsors and investors on structuring their investments in
Opportunity Zones.
P aul M arino is a partner at Sadis & Goldberg LLP. He focuses
his practice on matters concerning financial services, corporate
law and corporate finance. Marino provides counsel in the
areas of private equity funds, mergers and acquisitions. He has
represented national and multinational corporations, ranging
from telecoms, tech companies and real estate syndication
to financial investors and investment advisors. He has also
negotiated and structured a number of U.S. domestic and cross-
border mergers and acquisitions and joint ventures.
Sources:
1
Congressional Letter to Secretary Steven T. Mnuchin, Department of the Treasury. https://www.scott.senate.gov/imo/media/doc/
1.23.19%20Signed%20Opportunity%20Zone%20Letter%20to%20Secretary%20Mnuchin.pdf
2
1400Z-2(d)(2)(B) and (C).
3
A copy of the proposed guidelines may be obtained at https://www.irs.gov/pub/irs-drop/reg-115420-18.pdf. 
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