Special economic zone

A special economic zone (SEZ) is a designated area within a country that has been set up to attract foreign investment and promote economic growth. The goals of a SEZ can vary depending on the specific policies and regulations established by the government, but

Goals

Some common goals include:

• Attracting foreign investment: One of the main goals of a SEZ is to attract foreign companies to invest in the zone, through the provision of tax incentives, relaxed regulations, and other benefits.
• Creating jobs: SEZs are often established in order to create jobs and stimulate economic growth, particularly in regions that have high unemployment or are economically underdeveloped.
• Enhancing exports: SEZs are often established to promote exports, by providing a location for companies to produce goods and services that can be sold to other countries.
• Developing infrastructure: SEZs often require significant investments in infrastructure such as ports, airports, roads, and power supply.
• Promoting industrial development: SEZs are often established to promote industrial development, particularly in industries that are deemed to be of strategic importance to the country.
• Encouraging technology transfer: SEZs can be used to encourage technology transfer from foreign companies to local companies, by providing a location where foreign companies can set up operations and share their knowledge and expertise.
• Improving competitiveness: SEZs can be established to improve the competitiveness of the country's economy by providing a location where businesses can operate with a more favorable business environment.
• Diversifying the economy: SEZs can be established to diversify the economy by promoting the growth of new industries and sectors, and reducing the dependence on traditional sectors.

In summary, the goals of Special economic zones can vary depending on the specific policies and regulations established by the government, but some common goals include attracting foreign investment, creating jobs, enhancing exports, developing infrastructure, promoting industrial development, encouraging technology transfer, improving competitiveness, and diversifying the economy.

Benefits of SEZs

There are many benefits available for investors who establish their business in SEZs, including but not limited to: tax exemptions, plots of land with ready utilities, help with the paperwork, property tax exemption (only in some districts). Investors can be offered public aid for the investment, new workplaces as wells as non-investment activities, which include:

• research and development,
• logistical activities,
• employee training.

Special economic zone — recommended articles

Trade liberalization — Basic industry — Economic factor — Export incentives — Employers association — Advantages of cooperatives — Importance of international business — Technology park — Medium-sized enterprise

References

• Liu, X., Heilig, G. K., Chen, J., & Heino, M. (2007). Interactions between economic growth and environmental quality in Shenzhen, China's first special economic zone. Ecological Economics, 62(3), 559-570.

Author: Anna Opalińska