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GOJ Partners with Singapore to Develop Special Economic Zone

Prime Minister Andrew Holness, this morning (January 26) met with Daniel Seah, Deputy Director of Singapore Cooperation Enterprise (SCE) and representatives from the Special Economic Zone Authority (SEZA) to discuss the partnership between both governments to develop Jamaica’s Special Economic Zone (SEZ).

A memorandum of understanding (MoU) which was signed between the Jamaican government and Singapore Cooperation Enterprise in December 2016 will see the development of a comprehensive road map which will foster a SEZ environment.

Prime Minister Holness said that the “development of the SEZ will greatly impact Jamaica’s economic development as all Jamaicans should benefit from the Zone.”

This he says will be possible with limited intervention from government.

The three tiered MoU establishes that the SCE will develop a world class Special Economic Zone; provide planning and workforce skills qualification framework and create a business environment within Special Economic Zones.

The Jamaican government on August 1, 2016, promulgated the Special Economic Zone Act which repeals the Jamaica Free Zone Act.

This makes provisions in respect of the development, regulation, construction, supervision, management and control of Special Economic Zones in Jamaica.

It is expected that the SEZ will create a modern framework to attract investments in planned industrial clusters that develop and deliver a wider range of goods and services.

Present at the meeting were, Hon. Daryl Vaz, Minister without portfolio in the Office of the Prime Minister, Mrs. Audrey Sewell, Permanent Secretary, Metry Seaga, Chairman, Special Economic Zone Authority; Dr. Eric Deans, CEO, Special Economic Zone Authority and Diane Edwards, President, JAMPRO.

Source:http://jis.gov.jm/goj-partners-singapore-develop-special-economic-zone/

What’s so special about the Special Economic Zones Act?

A Special Economic Zone (SEZ) generally refers to a geographically demarcated area within a country that offers special economic regulations and procedures to entities which operate within the zone.

The passing of the Special Economic Zones Act (the Act), which effectively repealed the Jamaica Export Free Zones Act, represented a major initiative by the Government of Jamaica to improve the manner in which SEZs were designated, promoted, developed, operated and managed within the country.

The intention was that the introduction of a modern SEZ regime would result in greater investments (both domestic and foreign), increased employment and economic growth for the country. Set out below are some of the significant reforms introduced by the Act.

Under the Act, the category of persons who may utilise the SEZ consists of developers, occupants and zone users. A developer is defined as a company limited by shares incorporated under the Companies Act of Jamaica and established by a sponsor (ie an investor) for the purposes of entering into a master-concession or a licence agreement to develop and construct an SEZ.

 

An occupant refers to a person who conducts business in the SEZ under a sub-concession agreement with the developer. Zone users are persons, other than occupants and developers, who have been authorised by the authority (defined below) to perform activities or services within the SEZs.

Perhaps one of the most significant reforms introduced by the Act was the establishment of the Special Economic Zones Authority (the Authority). It is believed that the introduction of an autonomous authority will enhance the efficiency and competitiveness of the SEZs. Some of the functions of the Authority include the handling of development applications; management and operation of a business acceleration centre, which will assist with the communication and co-ordination of regulatory activities with Government entities on behalf of the developers and occupants of the SEZs; promotion and marketing of the SEZs; and the raising of capital to execute its functions under the Act.

Under the previous free zone regime, manufacturing entities were only allowed to supply up to 15 per cent of production to the domestic markets. This cap on domestic sales has been removed under the Act, which will result in sustainable linkages between SEZs and the rest of the Jamaican economy. Entities within the SEZs are now able to freely sell goods on the local market and export goods to businesses outside of the SEZs. The hope here is that this will lead to increased domestic employment, increased exports, and will facilitate the participation of Micro, Small and Medium Enterprises (MSMEs).

A number of additional tax benefits and incentives have also been introduced under the Act. For instance, entities which operate within the SEZs will benefit from a 12.5 per cent reduction in income tax; there is no General Consumption Tax on electricity or telephone services provided to entities within the SEZs; and the Act provides for stamp duty relief of 50 per cent of the duty payable upon the purchase, lease or other acquisition of land used by a developer of an SEZ. The tax benefits and incentives are conferred upon the Authority as well as developers and occupants of the SEZs.

The Authority has the power to allow for the establishment of an SEZ in which only specific economic activities such as maritime or aviation may take place. The Authority may also establish an SEZ in which only a single entity may operate. It is also important to note that there are a number of activities which may not be carried on within an SEZ.

These prohibited activities are set out in the Act and include tourism services, financial services regulated by the Bank of Jamaica or the Financial Services Commission, construction services – save where such services form a part of a manufacturing process within the SEZ, health services excluding research and development, retail trade, telecommunication services, public utilities, real estate, catering services and extractive industries such as mining, quarrying or drilling.

Another significant reform under the Act is that developers can now establish SEZs privately through concession or licence agreements with the Authority. These developers must have at least US$1.5 million in capital as a prerequisite to obtaining a concession or licence agreement with the authority. A developer that is an MSME will not have to meet this capital requirement so long as the Authority determines that it has sufficient development potential and is likely to meet the capital requirements within four years.

Lastly, the Act provides for the introduction of a special Customs regime for SEZs. It requires the commissioner of Customs to make arrangements for the availability of Customs services within the SEZs on a continuous basis, the establishment of Customs procedures and systems that will enable electronic transactions and payments and pre-arrival clearance of goods and the efficient transportation of goods and equipment destined for an SEZ without any unnecessary delay.

The passing of the Act has undoubtedly established a modern SEZ regime for Jamaica. Over time, we will see if this regime results in sustained growth and development for our country’s economy. In terms of finding out how the SEZ may benefit you and your business, there is, however, no time like the present.

– Samantha Moore is an associate attorney-at-law at Myers, Fletcher & Gordon and is a member of the firm’s Commercial Department. Samantha may be contacted via samantha.moore@mfg.com.jm or www.myersfletcher.com This article is for general information purposes only and does not constitute legal advice.

 

source: http://www.jamaicaobserver.com/business/What-s-so-special-about-the-Special-Economic-Zones-Act-_74650

Over 200 expected at logistics hub symposium tomorrow

KINGSTON, Jamaica (JIS) — Key partners in the staging of a logistics symposium are upbeat and have high expectations for a successful, information-sharing event.

The symposium, slated for Saturday, July 23 at the University of the West Indies Regional Headquarters in Mona, St. Andrew, is expected to attract approximately 200 persons representing both the public and private sectors, including the thinkers, implementers, business strategists, companies and individuals who may wish to capitalise on the future growth of the global logistics industry.

Chairman of the Logistics Hub Initiative, Dr Eric Deans explained that the symposium will look at what it means to become a logistics gateway and how Jamaican businesses can fit into a global marketplace.

“We would want to have more sharing of knowledge as to what is happening with the logistics hub…persons need to be aware of what is taking place within the region, what is happening in terms of goods moving through the region, investments taking place in other countries, various investment trends and countries positioning themselves to take advantage of these trends. So it is about breaking it down to the individual level to let persons understand how they can take advantage of these happenings,” Deans pointed out.

Vice-President of Cable & Wireless Business, Donovan White said that he expects a continued flow of information with small, medium and large enterprises and for them to understand the importance of the logistics hub initiative (LHI) to long-term microeconomic success.

 

“My expectation from the symposium is that people will come and walk away being a lot more aware…there is a lot that has gone on in the last year in terms of behind-the-scenes work (as part of the logistics hub initiative) and so, the more people come with an open mind and believing that there is a move to change our economic development in a positive way, then I believe people will leave feeling that we are on to something and that they need to get involved,” White expressed.

The day’s proceedings will begin with a plenary and opening ceremony featuring a presentation from the economic consulting firm Nathan Associates Inc, entitled ‘Master Plan and Industry Analysis for the Global Logistics Hub Initiative’. This session will provide an update on findings and state of developments relating to the global logistics hub initiative.

The sessions following will include panel discussions on three key areas within the global logistics industry: manufacturing, transportation and services.

The symposium is being staged by Mona School of Business & Management (MSBM), Planning Institute of Jamaica (PIOJ), Jamaica Logistics Hub Taskforce, Ministry of Economic Growth & Job Creation, Port Authority of Jamaica and Caribbean

Maritime Institute in association with Cable & Wireless Business, Sutherland Global Services and the Shipping Association of Jamaica.

source: http://www.jamaicaobserver.com/news/Over-200-expected-at-logistics-hub-symposium-tomorrow

Special Economic Zone Act Passed

The Ministry of Industry, Investment and Commerce welcomes the passing of the Special Economic Zone Act in both the Senate and the House of Representatives. The legislation represents a milestone achievement as part of the Global Logistics Hub Initiative and facilitation of investments into Jamaica.

Special Economic Zones represent a wide variety of geographically-demarcated areas that offer simple and efficient business regulations and procedures to investors. The Special Economic Zone Act has effectively repealed the Jamaica Export Free Zones Act, making way for the designation, promotion, development, operation and management of Special Economic Zones; the establishment of a Special Economic Zone Authority and the granting of benefits and other measures in order to attract domestic and foreign investments.

Minister Hylton in commenting on the legislation stated, “We envision that the zones will attract new economic activities, supported by the provisioning of new infrastructure. It will also allow domestic suppliers to sell to companies located in the SEZs and potentially become part of global supply chains. Importantly, incubators will be a key feature to ensure our MSME sector has an opportunity to be part of this growth initiative.”

In preparation for the transition from the Freezone regime to the SEZ regime, the Ministry has conducted consultations with existing Free Zone entities to allow for a smooth process. Existing Freezone operators such as Gulfray Americas Limited, which recently announced a US$350 million investment in the build out of the Spanish Town Free Zone and Kingston Wharves Limited, which is investing $J 1.8 billion in the build out of its Total Logistics Facility are among investors that will transition to the Special Economic Zone regime.

Source: http://www.mof.gov.jm/mof-media/media-centre/press/2270-special-economic-zone-act-passed.html