Canadian Manufacturing

Opportunity (Zone) is knocking for Can-Am business expansion

The Opportunity Zones program provides substantial tax benefits for capital gains reinvested into economically disadvantaged areas

January 2, 2020  by Andrea Klyczek, Invest Buffalo Niagara

PHOTO: Invest Buffalo Niagara


—Sponsored content provided by Invest Buffalo Niagara

For Canadian companies, and specifically those in southern Ontario, interested in the U.S. market, Buffalo Niagara is the natural front door. These companies can leverage the size of the U.S. market, Made in the U.S.A labels, and much more all from a U.S. location close to their Canadian headquarters.

Some additional regional advantages include:

  • International border location
  • Proximity to major metropolitan areas
  • Highway, rail, and maritime shipping
  • Low-cost renewable hydroelectricity
  • Affordable real estate
  • Low cost of living, high quality of life

However, there is a newer advantage to doing business in the U.S. that continues to build the business case for expansion. The Opportunity Zones program provides substantial tax benefits for capital gains reinvested into these economically disadvantaged areas.

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Qualified investments include real estate, stock or equity interest in an existing business, startup businesses, and business property, as long as the investment is located in an Opportunity Zone. For business investments, at least 50% of revenues must be derived from the active conduct of business in the Opportunity Zone and at least 70% of the tangible property of the business must be located in an Opportunity Zone.

Tax benefits include:

  • Deferral of capital gains tax until the investment is sold or until 12/31/2026, whichever is earlier.
  • Discounted capital gains of 10% for investments held 5 years if invested by December 31, 2021.
  • Discounted capital gains of 15% for investments held 7 years if invested by December 31, 2019.
  • Exclusion of 100% of future gains for investments held 10 years or longer.

While Opportunity Zones are one of the newest available programs to incent your business expansion, it certainly isn’t alone. In addition to federal Opportunity Zone tax advantages, many additional incentives are available in Buffalo Niagara. Incentives such as low-cost hydropower, grants from utility providers, historic preservation tax credits, brownfields tax credits, property and sales tax abatements, capital grants, and low-interest loans can be used to facilitate any real estate or business development deal. An incentives package can be tailored to fit any project and a team of experienced economic development officials will facilitate the process.

Just over the Can-Am border in Niagara County, there are eight (8) Opportunity Zones in Niagara County—five (5) in the City of Niagara Falls, two (2) in the City of North Tonawanda, and one (1) in the City of Lockport, each offering different investment opportunities.

PHOTO: Invest Buffalo Niagara

Niagara County’s Opportunity Zones include waterfront sites along the Niagara River and Erie Canal, historic main streets, neighborhood business districts, office and industrial parks, and sites overlooking the majestic Niagara Falls itself.

If you’re interested in more information about Opportunity Zones and available prospects just over the border within Niagara County, visit this website.


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