There are plenty of good reasons why companies decide to use Special Economic Zones (SEZs), and usually the first reason that springs to mind is preferential terms. The complete removal of trade-related duties and taxes can add up to substantial savings. When your organization decides to use an SEZ, you’re entering a special relationship with your host which effectively entitles you to mates’ rates!
The hand of friendship extends further still, though; many additional and equally valuable benefits are available in these zones. This blog identifies the most important advantages and gives some useful insight into Jamaican SEZs.
So, how should we define an SEZ? I think of it as an administratively separate part of the host country where business can be conducted on privileged terms. It’s a geographically delineated area, usually physically secured, which has a single management or administration authority, a separate customs area with streamlined procedures, and it provides benefits to companies that decide to locate themselves within the zone.
The idea of these zones took off globally in the early 1960s, initially in Europe and the USA. Today there are about 5,400 SEZs – of which 1,000 have been set up within the past decade – located in approximately 150 different countries and territories around the world.
Great for the host nation
For the host nation, an SEZ can promote economic growth and help increase export levels. More specifically, it is likely to stimulate commercial exchange between countries, boost trade and business-related possibilities, increase currency exchange gains, ensure less bureaucracy and more
investment freedom, stimulate low-cost logistics and business diversification, open up new employment possibilities, and lift export barriers.
Outstanding for companies
By using an SEZ, companies can bypass many or all local import and exchange controls. They can also enjoy a variety of custom preferences for the production, storage and handling of goods. And typically, an SEZ creates a better business environment with efficient services and infrastructure. For example, there are science and technology parks, logistics parks and airport-based zones offering an appropriate range of third-party services – each company can select the zone that matches specific requirements.
The Jamaican SEZ experience
For Jamaica, SEZs represent a constant investment in the country since its very first zone was created in 1976. Today this innovative Caribbean nation boasts a total of 104 entities with SEZ status across 140 locations in 11 of its 14 parishes.
Together these SEZs create an ecosystem that fosters exponential growth in key global services sub-sectors such as knowledge process optimization (KPO) and IT-enabled services as well as business process optimization (BPO) services, logistics, and services for a broad spread of creative industries. All this has helped Jamaica achieve top 10 positions in several critical international business advantage metrics, and business confidence has increased annually by more than 24 points in the last decade. The country was placed 6th globally for the least red tape (Forbes Best Countries for Business Report, 2019), encouraging international companies to invest in Jamaica and facilitating business growth.
Alongside this, Jamaica has developed a unique Upsource services model. This invites companies to utilize upscale outsourcing in Jamaica’s SEZs, particularly high-quality, high-value services delivered by a growing pool of talent with global expertise in data, research, logistics, distribution and more.
According to Lynda Langford, Country Director of Conduent, which has used the Jamaican SEZ ecosystem for more than 30 years, “With the increasing upskilling of people employed within the services sector, it is very likely that whatever our customers’ needs are, they will be able
to find a solution to them in Jamaica.” Langford, adds “We have been able to gain access to some of the brightest minds, to further enhance the quality of services to our clients and utilize the offerings of the Special Economic Zones (SEZs), including custom duty relief, capital allowance and employment tax credit.”
Find out more
If your organization would like to discover more about the advantages of Jamaican SEZs, please get in touch today. You can also find further information when you sign up for our SEZ Playbook. We look forward to starting a beautiful partnership!