When people hear the term “Special Economic Zone” (SEZ), they often picture large corporations – Business Process Outsourcing (BPO) firms, multi-national giants, or automotive companies. However, Jamaica’s Special Economic Zones Act was carefully structured to include Micro, Small, and Medium-sized Enterprises (MSMEs) as part of the Government of Jamaica’s broader vision to create an enabling environment for the Sector.
The Jamaica Business Development Corporation (JBDC) through this shared vision, partners with the Jamaica Special Economic Zone Authority (JSEZA), the agency tasked with regulating and managing the development of SEZs in Jamaica.
The Entrepreneur Weekly tells us more.
A Special Economic Zone, as defined by JSEZA, is a designated geographic area that operates under different economic regulations than the rest of the country. These zones are designed to attract investment, boost exports, and stimulate economic activity by offering a range of business-friendly incentives.
Before we move forward, it’s important that we understand these terms:
- Developer: A company may apply for Developer status if the intention is to establish, manage, maintain and operate as the landlord of a SEZ.
- Occupant: An Occupant refers to a company which conducts business in the Zone under a sub-concession agreement with a Developer.
- MSME Occupant: An Occupant who has 50 or less employees and generates an annual revenue not greater than 150 million Jamaican dollars.
- Zone User: Means a company providing services to Developers or Occupants within a SEZ. This could include restaurant or manpower services. A Zone User does not benefit from the SEZ fiscal incentives.
- Sub-concession: is an agreement that allows an occupant, like a business, to operate within a designated area, often a Special Economic Zone (SEZ), under terms outlined in a contract between the developer and the occupant.
Companies operating within these zones enjoy several key benefits, including, but not limited to:
- Income Tax Relief
- Customs Duty Relief
- Asset Tax Relief
Levelling the Playing Field
Typically, businesses wishing to operate in a SEZ are required to meet specific financial thresholds.
According to JSEZA guidelines:
- The applicant must be a new company, registered with the Companies Office of Jamaica (COJ)
- The applicant must be a company limited by shares and registered under the Companies Act of Jamaica
- Investments by the applicant in zone-related buildings, machines, equipment, facilities and other necessary assets during the first year of the occupant’s sub-concession shall not be less than US$50,000.00
However, the SEZ Act of 2015 offers a special provision for MSMEs – ‘MSME Occupant’. These financial requirements can be waived if the applicant can demonstrate what the law describes as “sufficient development potential”. The applicant may be “Approved by the SEZ Authority based on evidence that the MSME conducts at least 50% of its business with a SEZ Developer or Occupant or has the capabilities to provide services or goods to an international market”. (JSEZA)
The JSEZA says, “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.”
This policy provides MSMEs with a pathway to access the same incentives as larger firms, while allowing room to scale gradually under the guidance of JSEZA.
JBDC facilitates the development of the MSME sector through partnerships like the one with JSEZA. Though these agencies are not identical, entrepreneurial success is at their core as they both operate under the Ministry of Industry, Investment & Commerce (MIIC). Find out how the JBDC can move your business ‘From Concept to Market’. Visit www.jbdc.net and become a client today.
YOU DON’T WANT TO MISS THIS!
