For investors, the opportunity zones come with several tax advantages. Capital gains placed in a certified opportunity zone fund will not be taxed through the end of 2026 or when the investment is sold, whichever comes first. Any gains from the fund are permanently shielded from taxes if the investment has been held for 10 years. In addition, the initial investment will be discounted by up to 15 percent for tax purposes after seven years.

"We want all Americans to experience the dynamic opportunities being generated by President Trump's economic policies," Mnuchin said in a statement. "This incentive will foster economic revitalization and promote sustainable economic growth, which was a major goal of the Tax Cuts and Jobs Act."

The proposed guidance would govern investments in so-called "opportunity zones" across the country that were created under the sweeping new Republican tax law. Treasury Secretary Steven Mnuchin estimated as much as $100 billion in private capital could be funneled into those areas.

The Treasury Department on Friday outlined rules for investors seeking to finance development in underserved regions in exchange for significant tax breaks.

The guidance comes just weeks before the midterm elections. The GOP has struggled to sell its tax law to voters as the party tries to hold onto its House majority.

The proposed regulations clarify that only capital gains are eligible for preferred tax treatment. Investors who can participate include individuals, corporations, businesses, REITs, and estates and trusts. Treasury said additional guidance will be released before the end of the year, with final rules likely to come in the spring.

"We felt it was important to issue the core guidance now that's needed to get the funds up and operating and not wait until we have every question answered," said a senior Treasury official who declined to be named.

Read more: 'Opportunity zones' are popular with investors, but they might offer less benefit to voters

One key outstanding issue is how much flexibility the funds will have to buy and sell assets within an opportunity zone. The official said that will be part of the second round of guidance.

Still, some investors are already setting up funds amid early interest in the new program. Craig Bernstein of OPZ Capital said he has "soft-circled" $50 million in funding, and that demand has been high among families who have been reluctant to sell their businesses or significant shares of stock because of the tax implications.

"I think these regulations are going to free up and unlock a lot of capital that has been sitting on the sidelines waiting to get involved," Bernstein said.

States have designated more than 8,700 Census tracts as opportunity zones, including nearly all of Puerto Rico. The average poverty rate in the zones is 32 percent, compared with the national average of 17 percent.

The American Investment Council, which represents private equity investors, said it is reviewing the regulations but has welcomed the idea.

"The private equity industry supports Opportunity Zones and looks forward to playing a role as this important program moves forward," AIC President Drew Maloney said in a statement to CNBC. "Our members have a successful record of investing in communities across America, supporting millions of jobs, and strengthening local economies."

WATCH: Trump agenda, attitude overshadow tax cuts