Compliance will be much easier and more flexible. A one-tier structure comes with too many restrictions. The two-tier structure is standard because you get the ability to lease property rather than just own it, and you get to claim the working capital safe harbor. You also get easier property testing.
The principal benefits of a two tier structure (i.e., a Qualified Opportunity Fund (QOF) investing in a Qualified Opportunity Zone Business (QOZB) over a QOF-only structure are that (i) Qualified Opportunity Zone Business property needs to account for only 70% of a QOZB's total tangible assets (as opposed to 90% of total assets in a QOF-only structure), (ii) a QOZB can use the 31-month work capital safe harbor but a QOF cannot and (iii) if a later investor that already has funded a QOF wants to invest, then that QOF can invest in the QOZB (which would not be possible in a QOF-only structure, because one QOF cannot invest in another).
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