Tribes and Three Zs: Opportunity, HUB, and Foreign Trade Zones

The Bureau of Indian Affairs (BIA) describes what “Opportunity Zones, HUBZones, and Foreign Trade Zones” are, how they apply to tribal lands, and what benefits they offer, at this link. The following is our summary of the information given.

Our analysis shows that FTZ-based economic development among tribes is still nascent and sporadic. While some tribes are pioneering modern supply-chain and trade-oriented business models, many others lack resources, capacity, or interest to leverage FTZs.

Garland & Zhang’s innovative business model is designed to change all that.

Purpose — helping tribes attract investment & business

The three programs provide location-specific economic opportunities that tribes and tribal governments can leverage to promote and sustain business growth in their communities.

The target is tribal lands — including reservations, trust lands, villages, and tribal areas — which may qualify under zones or FTZ, giving tribal enterprises tools to attract investment, create jobs, and build infrastructure.

Overview of the Three Z Programs

1. Opportunity Zones (OZs)

Definition & Value: Economically distressed communities where new investments may qualify for special tax benefits.
Number: There are 8,764 Opportunity Zones across all 50 U.S. states, DC, and five U.S. territories (American Samoa, Guam, Northern Mariana Islands, Puerto Rico, U.S. Virgin Islands).
Overlap: Many Opportunity Zones overlap with tribal lands (federally or state-recognized American Indian / Alaska Native reservations, trust lands, villages, tribal areas in Oklahoma, etc.) — which means tribes and tribal enterprises are positioned to benefit.
Investments: Individuals or corporations can take realized capital gains from the sale of assets and invest them into eligible businesses or properties inside an Opportunity Zone — via an “Opportunity Fund.” This can defer capital gains taxes (up to 10 years). Opportunity Funds can invest in tangible property (e.g. buildings) or tribal businesses, potentially enabling construction of warehouses, offices, housing, hotels — thereby stimulating economic development and jobs in tribal communities.
Grants: Tribal governments may seek feasibility-study grants through the Native American Business Development Institute Grant to plan projects in Opportunity Zones.

2. HUBZones

Definition & Value: HUBZones (Historically Underutilized Business Zones) are zones considered underdeveloped by certain criteria — businesses operating in such zones may receive federal contracting preferences.
Eligibility: Importantly, tribal lands (such as reservations, trust lands, and Alaska Native village areas) automatically qualify as HUBZones.
SBA Oversight: The program is overseen by the Small Business Administration (SBA), which maintains a public interactive map showing all HUBZones (including tribal areas).
Incentives: Federal contracting incentives under HUBZone include: “set-asides” (contracts reserved for HUBZone-certified firms), “sole-source” awards (contracts issued without competition), and “price-evaluation preference” (discount in bid evaluation if a HUBZone firm’s price is significantly lower than non-HUBZone firms). Since the U.S. federal government annually procures hundreds of billions in goods and services, these preferences create a meaningful opportunity for tribal businesses to win government work.
Note: tribal business must be certified as a HUBZone business (via SBA) to qualify — not all businesses located on tribal lands automatically get the benefit. Certification requirements include e.g. at least 51% U.S.-citizen ownership (or eligible tribal/Native entity), principal office located in a HUBZone, and certain percentage of workforce residing in a HUBZone.

3. Foreign Trade Zones (FTZs)

Definition & Value: An FTZ is a geographical area (industrial/commercial zone) where foreign and domestic goods are treated, for tariff and customs purposes, as if they had not yet entered the United States. This can lead to major cost savings: imported components can be stored, assembled, and/or part-manufactured in the FTZ, in which case the finished goods may enter U.S. commerce tariff-free. This makes FTZs especially attractive for manufacturing, assembly, warehousing and re-export operations.
Eligibility: A tribal corporation may qualify to establish an FTZ under federal FTZ regulations.
Oversight: FTZs are subject to oversight by U.S. Customs and Border Protection (CBP) and require compliance with detailed security and operational requirements. Also — before manufacturing in an FTZ, operations must be approved case-by-case by the Foreign‑Trade Zones Board (FTZ Board), which evaluates whether there are negative impacts on U.S. domestic industries.
Models: For tribal corporations, there are several models: importing components to assemble goods; importing for re-export; or leasing FTZ space to other companies (or taking equity) — offering flexibility and multiple revenue strategies.

Summary of Key Advantages & Considerations

Advantages:

These programs provide federal incentives that can meaningfully lower barriers to investment: tax deferral (OZ), federal contracting preferences (HUBZone), tariff/cost savings (FTZ).
Tribal lands, including reservations and trust lands, often already qualify — meaning tribal governments or tribal businesses don’t need to lobby for designation (especially under HUBZone).
They can spur economic development: building infrastructure (housing, commercial buildings), manufacturing, job creation, attracting outside capital or business partners.
They give flexibility: tribes can choose between real estate development (OZ), services and contracting (HUBZone), or manufacturing/trade (FTZ), depending on local resources, workforce, and strategic vision.

Considerations / Challenges:

For OZ, there are rules about what counts as a qualified business or property (timing of acquisition, substantial improvement, “active business” criteria, limitations on certain types of businesses). Garland & Zhang understands these rules.
For HUBZone, tribal businesses must get certified, and meet ownership, location, and workforce-residency requirements. Certification is not automatic. Garland & Zhang understands these requirements.
For FTZs, there are regulatory and compliance burdens: CBP oversight, security/operational requirements, and FTZ-Board approval for manufacturing activities.
Garland & Zhang understands the rules and regulations and is structured to own the developments so that these considerations are no longer barriers.

Conclusion — A Strategic Tool-Box for Tribal Economic Development

Opportunity Zones, HUBZones, and Foreign Trade Zones are not one-size-fits-all solutions but complementary economic-development tools that tribal governments and tribal enterprises can use to their considerable benefit.

For many tribes, these programs open pathways to:

Attract outside investment (through tax incentives)
Leverage federal contracting (through HUBZone preferences)
Engage in manufacturing, trade or re-export business (through FTZs)