Opportunity & Hub Zones

The (HUBZone) Program

The Historically Underutilized Business Zones (HUBZone) program helps small businesses in urban and rural communities gain access to federal procurement opportunities. To qualify for a HUBZone certification, a company must maintain a “principal office” in one of these specially designated zones. Pontiac is an SBA HUBZone, and your business may qualify for HUBZone certification if your business home is within our city. This can help get federal contracts and bid opportunities to grow your business.

Benefits of the HUBZone Program include

Competitive and sole source contracting
10% price evaluation preference in full and open contract competitions
Subcontracting opportunities

Eligibilities

To qualify for a HUBZone, a business must meet the following:

Must be owned and controlled at least 51% by U.S. citizens, or a Community Development Corporation, or an agricultural cooperative, or a Native American tribe
It must be qualified as a small business by SBA standards
At least 35% of its employees must reside in a HUBZone

Opportunity Zones

The city of Pontiac is classified as a Qualified Opportunity Zone.

An Opportunity Zone is a tool for economic development that offers tax benefits to investors. This helps to nudge economic growth and job creation. Taxpayers can invest in these zones through Qualified Opportunity Funds.

Benefits

Opportunity Zones offer tax benefits to business or individual investors who can elect to temporarily defer tax on capital gains if they invest those gain amounts in a Qualified Opportunity Fund (QOF). Investors can defer tax on the invested gain amounts until the date they sell or exchange the QOF investment, or Dec. 31, 2026, whichever is earlier.

The length of time the taxpayer holds the QOF investment determines the tax benefits they receive.

If the investor holds the QOF investment for at least five years, the basis of the QOF investment increases by 10% of the deferred gain.
If the investor holds the QOF investment for at least seven years, the basis of the QOF investment increases to 15% of the deferred gain.
If the investor holds the investment in the QOF for at least 10 years, the investor is eligible to elect to adjust the basis of the QOF investment to its fair market value on the date that the QOF investment is sold or exchanged.