Special Economic Zone Authority (SEZA)

Special Economic Zone Framework in Sindh

Keeping in view the great success of SEZs around the globe, the Government of Pakistan has passed Special Economic Zone (SEZ) Act 2012. The Act will help to attract the investment and promote better infrastructure which in turn provide a platform to help grow the economy, create social cohesion, enhance the environment and deliver better public services.

According to the SEZ Act 2012, Government of Sindh has established Special Economic Zone Authority (SEZA), Sindh which is headed by Chief Minister, Sindh.

Composition of Special Economic Zone Authority, Sindh.

Chief Minister Sindh Chairperson
Minister Finance Member
Chairperson Sindh Board of Investment Vice Chairperson
Additional Chief Secretary P&D Member
Secretary Finance Member
Secretary Industries & Commerce Member
Secretary Land Utilization Department Member
Secretary Energy Member
Secretary Works and Services Member
Secretary Livestock & Fisheries Member
Secretary Agriculture Member
President/ A Nominee of Karachi Chamber Member
Two members to be appointed by the Chief Minister (to be notified later) Member
Director General, Sindh Board of Investment Secretary

 

Overview

Special Economic Zone (SEZ) is a blanket term for various types of specialized zones with specific types of enterprises operating in a well-defined geographic area where certain economic activities are promoted by a set of policy measures that are not generally applicable to the rest of the country. A number of types of SEZs exist each with a different set of incentives such as Free Trade Zone, Industrial Estate, and Industrial Park. Successful SEZs offer immediate access to high-quality infrastructure, uninterruptible power supply, clearly titled land, public facilities, and support services. In addition, streamlined regulatory enforcement, simpler business and establishment rules, expedited customs administration, and other special administrative and approval procedures are also offered in such zones.

A number of successful economies like China, Malaysia, Thailand, UAE and India have developed several SEZs to attract foreign and domestic investment. This has triggered an unprecedented growth in their economies. China’s SEZs were first established in five coastal cities in 1980 (Hainan, Shenzhen, Shantou, Xiamen, and Zhuhai) and were areas where market economies could exist when the rest of the country was still under a planned economy. Malaysia has a very aggressive industrial policy that includes generous incentives and a network of industrial estates, parks, and zones. Currently, Malaysia has over 200 Industrial Estates and Parks, 14 Free Industrial Zones (FIZ) and a number of specialized Special Economic Zones. Thailand has been very aggressive in setting up appropriate infrastructure and incentives to attract investment and the results have been clearly positive. The United Arab Emirates, in response to a fear of becoming overly dependent on fossil fuels, has set up free zones as an engine to diversify the economy. The first free zone was Jabl-e-Ali Free Zone (JAFZA). Today, the UAE has over 12 free zones and counting. The success of these zones to date has stemmed from high levels of infrastructure investment, true freedom from taxes and regulations, and effective cluster building.

Infrastructure Facilities

Infrastructure to support industries within the Zone with following guaranteed facilities:

Roads Complete internal road infrastructure with connections to major modes of transportation such as highways, airports, and seaports.
Electricity Uninterruptible power supply at a stable frequency.
Natural Gas Adequate supply of natural gas.
Water Full Capacity for water demand within the SEZ.
Sewerage/Drainage Availability of sewerage and drainage system.
Waste water Arrangements of wastewater treatment facilities.
Communications All communications infrastructure, including telephone and the  internet.
Security Fool-proof security including secured perimeter wall or fence and  other relevant equipment.
Fire fighting Availability of effective fire-fighting services.
Medical Facilities Adequate medical facilities.
Maintenance Proper maintenance services.

SEZ Development Approach

The Feasibility Study shall include at a minimum the following components:

  • Market assessment of demand from targeted industries.
  • Price evaluation of the land and analysis for land pricing strategy.
  • Suitability assessment of the local area to support the targeted industries and the required infrastructure and amenities.
  • Financial Model of the costs and revenue streams of the SEZ along with sensitivity analysis.
  • Economic Impact Analysis including estimates for job creation, tax generation, export generation, and other benefits.

SEZ Plan shall be maintained and updated throughout the operations of the SEZ, including at a minimum the following components:

  • A Master Plan
  • A Management Plan
  • A Marketing Plan
  • A Capital Investment Plan

Incentives and Protections

The developer of a particular SEZ as well as all Zone Enterprises shall be entitled to the following benefits:

  • One time exemption from all customs duties and taxes for all capital goods imported into Pakistan for the development, operation and maintenance of a SEZ entity, subject to verification and approval from the Board of Investment.
  • Exemption from all taxes on income generated from the development and operation of the SEZ for a period of ten years, starting from the date of signing of the development agreement.
  • With the objective of promoting hi-tech industries or particular regions, additional benefits can be extended to a particular category of SEZs, Zone Enterprise, regions or sectors.
  • These benefits will not be withdrawn prematurely, and any change therein shall be to the advantage of the developer of the SEZ, or the enterprise.
Special Economic Zone Athority (SEZA), Sindh Download
Investment Policy 2013
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Special Economic Zone Act - 2012
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Modified SEZ Act 2012
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SEZ Ordinance 2015
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Special Economic Zone Rules
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SEZA Sindh Notification
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SEZA 1st Meeting Presentation
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