I am interested in Jamaica’s Special Economic Zones

How can SEZs benefit my business?

What is a Special Economic Zone

A Special Economic Zone (SEZ) is a designated area within a country that operates under different economic regulations, including business and trade laws. These considerations are specifically engineered to enhance trade, employment, job creation and investment opportunities within that geographical sector, including Foreign Direct Investment (FDI).

Jamaica boasts a thriving shipping industry, supported by Kingston Harbour, one of the world’s largest natural harbours. This feature holds special appeal for businesses across various sectors, but especially those within the manufacturing and distribution industries.  The greater the success of an SEZ, the stronger the network it can build with other hubs of trade and commerce, boosting the benefits for all parties concerned.

How Can I Get Involved

In Jamaica, in addition to the zones managed and developed by the Jamaica Special Economic Zone Authority (JSEZA) and various Government Agencies, the Special Economic Zones Act, affords foreign and local investors numerous fiscal incentives once they have applied for and obtained approval to receive an operating certificate or authorization to carry out their respective authorized SEZ activities as an occupant operating in a SEZ or as a developer of a SEZ.

Where applicable, the SEZ benefits result in an income tax rate of 12.5%, which is significantly lower than the normal rate and which can be further reduced to 7.5% with the application of certain employment tax credits. In addition, the SEZ benefits result in no withholding tax on the repatriated profits from Jamaica, no customs duty or general consumption tax (GCT) on the import of equipment, GCT relief on certain goods and services entering the SEZs, and refund of customs duties upon the exportation of goods from Jamaica.

A ‘developer’ is a company limited by shares that is incorporated under the Companies Act and is established by a sponsor (investor(s)) for the purpose of entering into a master-concession or a licence-agreement with JSEZA of the establishment of a SEZ. A ‘master-concession’ is a concession agreement concluded between JSEZA and the developer of a SEZ established or intended to be established on land that is vested in JSEZA as the registered proprietor or head lessee of the land. On the other hand, a ‘licence-agreement’ is a concession agreement concluded between JSEZA and the developer of a SEZ established or intended to be established on land that is not vested in JSEZA as the registered proprietor or head lessee of the land. JSEZA also has the discretion to allow the establishment of specialized SEZs which are SEZs limited to specific economic activities, such as maritime or aviation related SEZs (which may include dry docks, bunkering facilities, aircraft maintenance and repair, tank farms, among others).

JSEZA also has the discretion to allow the establishment of specialized SEZs which are SEZs limited to specific economic activities, such as maritime or aviation related SEZs (which may include dry docks, bunkering facilities, aircraft maintenance and repair, tank farms, among others).

An ‘occupant’ of a SEZ is a person, other than a developer of a SEZ or a ‘zone user’, who conducts business in a SEZ pursuant to the terms and conditions set out in a sub-concession agreement it has entered into with a developer of that SEZ.  A sub-concession agreement is the respective contractual arrangement between the developer and all occupants operating within the SEZ which must be compliant with the terms and conditions of the master-concession or the licence-agreement.

MFG’s SEZ Practice Group includes a multidisciplinary team of attorneys devoted to helping clients plan, procure, lease or build and finance SEZ investment projects in Jamaica. Our SEZ Practice Group has advised SEZ developers, single-entity developers, occupants, zone users, sponsors, lenders, public authorities and contractors:

1. on the legislative transition process from the Free Zone regime to the SEZ regime; and
2. from concept to successfully obtaining sub-concessions, licenses and operating certificates approved by JSEZA.

We have handled multijurisdictional/cross-border projects in a range of business sectors including business process outsourcing, energy and shipping & marine projects.

There are real benefits to both business operators and the local economy when a properly regulated and strategically managed SEZ is in operation.