A Special Economic Zone (SEZ) refers to designated geographical areas with special economic regulations that differ from general trade, tax and investment rules.
The Special Economic Zone Act establishes a body to be known as the Special Economic Zone Authority (the Authority). The Authority is administered by a board of directors whose chairperson is to be appointed by the Minister. The Authority shall assist in implementing the policies and programmes of the Government with regard to SEZs and be responsible for, amongst other areas:
|Special Economic Zone (SEZ) Regime||Jamaica Export Free Zone Regime|
|Exemption from border taxes|
|Exemption from Customs Administrative Fees (CAF)|
|Customs charges on sale into the domestic economy|
|General Consumption Tax (GCT) is NOT charged on locally purchased goods and services entering the zone, including electricity and telephone services||General Consumption Tax (GCT) was charged on the purchase of telecommunication services|
|Promotes two-way trade between zones and the rest of the local economy (i.e. to satisfy the World Trade Organization’s Agreement on Subsidies and Countervailing Measures and removes the previous export subsidy of the 15% cap on domestic sales), zero rate on sales into the zones||Export requirement of 85% and restricted interaction with the rest of the country in terms of the amount of manufactured goods that have to be exported|
|Countrywide zone development with industry clustering||Generally located in industrial areas or near ports or airports|
|Greater emphasis on private sector zone development and management||Primarily developed and operated by the government|
|Low headline Corporate Income Tax||No Corporate Income Tax|
|Managed by the SEZ Authority which has regulatory, facilitatory and promotional functions||Managed by the Free Zone Council|
|Value added services provided to SEZ users via the Jamaica Special Economic Zone Authority||Regulatory function provided via the Free Zone Council|
|Application with fees||Application with no fees|
|In addition to employment, the SEZ regime also incorporates development policy priorities such as FDI and value chain development with a focus on innovation, human resource development, rural development and green growth||Narrowly defined national development objectives|
Corporate Income Tax Headline Rate of 12.5%
(possible effective rate of 7.5% with the approval of additional tax credits)
|Customs Duty Relief||√||√|
|Relief from Income Tax on Rental Income||√||√|
|GCT relief – on all goods & services entering the Zone||√||√|
|Employment Tax Credit||√||√|
|Promotional Tax Credit (R&D and training)||√||√|
|Stamp Duty Payable||50%||50%|
|Relief from Transfer Tax||√||X|
|Environmental Levy Payable||√||√|
*Kindly refer to the Special Economic Zone Act and Regulations as amended periodically
Section 40(1A) of the Income tax Act shall apply as if the rate at which –
The Minister in charge of Special Economic Zones (The Prime Minister and Minister of Economic Growth and Job Creation) shall, on recommendation by the Authority, and in consultation with the Minister of Finance declare, by notice in the Gazette, any area as SEZ. The declaration will define the limits, rules and regulations of the zone and will remain in force until revoked by an order in the Gazette by the Minister and on recommendation by the Authority.
Definitely! One of the major aims of the SEZ regime is to promote the growth of Jamaica’s economy. All companies conducting business in the SEZ as a Developer, Occupant, Zone User or MSME Occupant must be incorporated in Jamaica.
|Developer||Occupant||Zone User||MSME Occupant|
|Company incorporated under the Companies Act of Jamaica||Company incorporated under the Companies Act of Jamaica||Company incorporated under the Companies Act of Jamaica that has been authorized by the SEZ Authority to provide ancillary services, other services or goods to SEZ Occupants within the Zone.||Company limited by shares and incorporated under the Companies Act of Jamaica with|
|Established to develop and or operate an SEZ under a master-concession or licence-agreement as approved by the SEZ Authority||Conducts business in the SEZ under a sub-concession agreement with a developer and approved by the SEZ Authority||No benefits from SEZ fiscal incentives.||Conducts business in the SEZ under a sub-concession agreement with a developer and approved by the SEZ Authority|
|Approved to develop a Zone that is sufficient to accommodate at least three (3) SEZ Occupants or special approval as a Single-Entity Specialised Zone||Approved to operate from an approved SEZ with a Developers’ Sub Concession Agreement||Approved to operate from an approved SEZ with a Developers’ Sub Concession Agreement||Approved by the SEZ Authority based on evidence that the MSME conducts at least 50% of its business with an SEZ Developer or Occupant or has the capabilities to provide services or goods to an international market|
|Benefits from fiscal incentives||Benefits from fiscal incentives||Benefits from fiscal incentives with year on year proof of business|
|Issued or paid up share capital at the effective date of either a master-concession or licence-agreement must not be less than US$1,500,000||Issued or paid up share capital at the effective date of either a master-concession or licence-agreement must not be less than US$25,000. Also, investments by the Occupant in the Zone related activities I,e. equipment, machines, facilities improvement etc. must be greater than US$50,000 within the first year of operation||Investments by the Zone User in the Zone related activities I,e. equipment, machines, facilities improvement etc. must be greater than US$50,000 within the first year of operation||Investments by the Zone User in the Zone related activities I,e. equipment, machines, facilities improvement etc. must be greater than US$25,000 within the first year of operation for a valid period of not more than four (4) years from date of issuance.|
All interested parties are invited to complete the registration form which may be requested via email at firstname.lastname@example.org or you may schedule an appointment with the JSEZA and a representative will be assigned to assist you with completing the documentation.
No, there is a restriction on such movement to mitigate against the erosion of Jamaica’s tax base for a period known as the Zone-establishment period. The Zone-establishment period is currently set at 10 years from the date the SEZ Act comes into force, however, the Minister may shorten or extend this time based on the level of zone development and protection of the Jamaican tax base.
Yes, there is a negative list of activities that neither a Developer nor Occupant may conduct inside a zone (please see list below). However, a SEZ Zone User may engage in these activities provided they can acquire the requisite permits/licences under the applicable law(s) and they have received authorization from the SEZ Authority to conduct the activity within a zone. It is important to remember that in conducting these or other activities that Zone Users are not eligible for the fiscal benefits under the SEZ Act.
(Note: Additionally, of import, is the fact that the Minister of Finance, after consultations with the Minister with responsibility for the Jamaica Special Economic Zone Authority may amend the negative list. The JSEZA, in consultation with the appropriate Ministries, Departments and Agencies, reserves the right to deny applications on the basis of public interest.)
Activities in the following industries are not allowed: