Special economic zone

Special economic zone  (tax haven,  globalisation)

A special economic zone (SEZ) is an area in which the business and trade laws are different from the rest of the country.

SEZs are located within a country's national borders, and their aims include increasing trade balance, employment, increased investment, job creation and effective administration. To encourage businesses to set up in the zone, financial policies are introduced. These policies typically encompass investing, taxation, trading, quotas, customs and labour regulations. Additionally, companies may be offered tax holidays, where upon establishing themselves in a zone, they are granted a period of lower taxation.

The creation of special economic zones by the host country may be motivated by the desire to attract foreign direct investment (FDI). The benefits a company gains by being in an SEZ may mean that it can produce and trade goods at a lower price, aimed at being globally competitive. In some countries, the zones have been criticised for being little more than labour camps, with workers denied fundamental labour rights.

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References

This page imported content from Wikipedia on 6 October 2024.
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