Part I - Special Economic Zones: Who wants to taste a piece of the pie?
Many discussions have been taking place in the business community, particularly among Jamaican manufacturers, regarding how they can get a piece of the Special Economic Zone (“SEZ”) pie so that they may be able to taste the delicious fiscal incentives offered by The Special Economic Zones Act, 2016 (the "SEZ Act").
The SEZ Act has repealed the Jamaica Export Free Zone Act (the "Free Zone Act") and the benefits, as discussed in my article published on February 7, 2018 (the “Article”), are numerous. One can therefore evidently understand why many companies would want to set up their business operations within a SEZ.
In the Article, I also emphasized the need for existing Promoters of Free Zones, Standalone Free Zones and Approved Free Zone Enterprises to start making the necessary arrangements to transition under the SEZ Act before it is too late. Statistics from the Special Economic Zones Authority (the “Authority”) confirm that there are 15 Promoters, 73 Approved Free Zone Enterprises, 41 Standalone Free Zones and 33 Non Free Zone Entities spreading across Jamaica. They all must remember that the ‘transition clock’ is ticking.
Notwithstanding, those who are not a part of an existing Free Zone may also be able to apply to become a Developer, Occupant, Single Entity SEZ or Zone User under the new SEZ Regime. Below I have outlined the application process for Developers.
The Application Process – Developers
In order to become a Developer of a SEZ, the applicant company must be incorporated under the Companies Act of Jamaica and has been established to design, finance, construct, develop, service, operate, manage, maintain, and promote a SEZ in Jamaica under a master-concession or licence-agreement as approved by the Authority.
Each applicant is required to complete the prescribed application form set out on the SEZA’s website along with the payment of the prescribed non-refundable application fee and submission of the following supporting documents and information:
a certified copy of the memorandum and articles of association;
a certified copy of the applicant’s certificate of incorporation;
a certified copy of applicant’s taxpayer registration number (TRN)
the GCT registration issued by Tax Administration Jamaica; and
the named company representative including, job title, telephone number and email address.
If the applicant is a Promoter of an existing Free Zone, it will be required to also submit a copy of the instrument that authorizes the Promoter to operate in the existing Free Zone, which must be certified by the Authority. Each applicant will be required to submit an affidavit setting out all relevant commercial information pertaining to the applicant, including its name, address, nationality, owners, board of directors (or equivalent management committee), auditors, bankers, as well as the capital ownership shares of the applicant.
‘Transitioning Applicants’ will also have to outline their proposed SEZ business operation by also submitting a business plan that includes the names and activities of the Approved Free Zone Enterprises operating in the existing SEZ whereas ‘New Applicants’ will have to submit a proposed project brief and a proposed development plan. Transitioning and New Applicants are also required to submit employment information, investment and financial information, a copy of a Surveyor’s Technical Description, Surveyor’s ID Report and Surveyor’s ID including Site Plan of the proposed SEZ area and by way of an affidavit, give an undertaking that declares the applicants’ assurance that it will fulfill the obligation under the SEZ Act.
After submission of all the required information the Authority may request any additional information required by it that would be in support the execution of a SEZ Developer Agreement (whether master concession agreement or licence agreement, as may be applicable) (the “SEZ Agreement”), provided that the Authority gives the applicant a reasonable time to submit the information. If within fourteen days (14) days of having made the application the Authority does not provide the applicant with any deficiency notice, the submitted written proposal will be deemed complete.
On receipt of the Transitioning or New Applicant’s complete written proposal, the Authority ought to, within a period of sixty (60) days, enter into the SEZ Agreement with the applicant in conformity with the provisions of the SEZ Act and the Special Economic Zones Regulations, 2017 (the “SEZ Regulations”).
Within ten (10) days after the execution of the Agreement, the Authority ought to issue an Operating Certificate to the applicant, thereby according the applicant with the legal status of a Developer under the SEZ Act and the SEZ Regulations.
Once the applicant is approved to develop a SEZ that is sufficient to accommodate at least three (3) SEZ Occupants or as a Single-Entity Specialised Zone, the new Developer will have to comply with the obligations under the SEZ Act and SEZ Regulations including but not limited to having an issued or paid up share capital at the effective date of the Agreement not less than US$1,500,000.00 and paying an annual SEZ developers licence fee.