Gov’t Leveraging SEZs for Investment Growth

An aerial view of Kingston Freeport Terminal Limited.

 

Businesses looking to optimise their supply chain operations and expand their global reach are being urged to take advantage of benefits available through the Special Economic Zone (SEZ) regime.

The Zones, which are governed by the Jamaica Special Economic Zone Authority (JSEZA), are designated areas across the country that offer special tax benefits and fiscal incentives, regulations and infrastructure to attract foreign and domestic business.

The objective is to stimulate economic growth, boost employment, and encourage innovation by providing an environment conducive to business expansion.

As of October 2023, there were 190 SEZ locations across the island, comprising 80 developers, 68 occupants and 42 Zone users.

JSEZA is promoting the SEZs as the ideal choice for business and will be conducting a series of tours across several zones to highlight their achievements and capacity to provide investment facilitation services.

Speaking with JIS News, Director of Investment Promotions and Communication, JSEZA, Kevon Farquharson, points out that the SEZs are a key part of Government’s mission to position Jamaica as a strategic hub for global trade and commerce.

He notes that “While the JSEZA focuses on developing several other industries, special emphasis is being placed on logistics because it is one of the major activities that contribute significantly to the SEZ regime.”

Director, Investment Promotions and Communication at the Jamaica Special Economic Zone Authority, Kevon Farquharson.

Mr. Farquharson says that logistics are crucial for facilitating the efficient import and export of products and services, enabling firms to effectively engage in international commerce.

One such logistics service provider is Kingston Freeport Terminal Limited (KFTL), which facilitates the movement of containerised cargo on and off the port for the transshipment and domestic markets.

“We are predominantly a transshipment hub, which accounts for around 90 per cent of our business, but also the main gateway for full containerised cargo for the domestic market, which accounts for the remaining 10 per cent,” KFTL’s Chief Financial Officer (CFO), Brandon Lee, tells JIS News.

Chief Financial Officer (CFO) at the Kingston Freeport Terminal Limited, Brandon Lee.

Having joined the SEZ community in 2020, KFTL has come to benefit from several opportunities provided under the SEZ regime.

“What the special economic zone provides for us is what I like to call financial benefits, allowing a company like KFTL to compete with these other regional or international companies. Fortunately for us, through the fruitful partnership between the entities, we have been able to capitalise on most, if not all, the benefits which the SEZ provides,” Mr. Lee shares.

These include a reduced rate on Corporate Income Tax, exemption of Customs Duties on imported items and zero per cent General Consumption Tax (GCT) on goods and services purchased locally for use within the zones.

The CFO says that “while KFTL is [situated] in a good geographic location, we do have competition in the region… and these benefits allow us to compete with other players”.

Detailing the company’s experience since becoming an SEZ, Mr. Lee shares: “We have had a good working relationship with the JSEZA. The team has certainly taken a hands-on approach in getting the onboarding done efficiently and if there are any queries, they are always available to answer.”

Furthermore, a robust regulatory framework within SEZs has been established to ensure a transparent and predictable business environment.

This regulatory framework not only provides a sense of security for logistics companies, but a sense of satisfaction knowing that “we can reap the benefits outlined in the Act while having our queries addressed in a timely manner”, Mr. Lee told JIS News.

Source: JIS

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