SEZ: Basic Concept
Special Economic Zone (SEZ) refers to a totally commercial area specially established for the promotion of foreign trade. A Special Economic Zone (SEZ) is a geographical region that has economic laws more liberal than a country's typical economic laws. Usually the goal is flourishment in foreign investment. Moreover, SEZs are specifically delineated enclaves treated as foreign territory for the purpose of industrial, service and trade operations, with relaxation in customs duties and a more liberal regime in respect of other levies, foreign investments and other transactions.
Difference between EPZs and SEZs
The SEZs are the new nomenclature of modified earlier Export Promotion Zones or EPZs. The first EPZ in India was set up in 1965 Kandala. They were created as privileged zones with the facilities of liberal tax and labour laws. They were to attract the foreign investors to import materials for use and export the manufactured
commodities. In this way jobs would be created and export got enhanced. The main difference between an EPZ and a SEZ is that the former is just an industrial enclave but the latter is an integrated township with fully developed infrastructure to import materials for use and export the manufactured commodities. In this way jobs would be created and export got enhanced. The main difference between an EPZ and a SEZ is that the former is just an industrial enclave but the latter is an integrated
township with fully developed infrastructure.
Need of SEZ in Nepal
SEZs are made with the intention to encourage certain kinds of industries by providing a more free-market-oriented legal regime than the country's industrial enclave but the latter is an integrated township with fully developed infrastructure.
Need of SEZ in Nepal
SEZs are made with the intention to encourage certain kinds of industries by providing a more free-market-oriented legal regime than the country's other national laws. This practice has been followed in many countries already. Though preparations have been made in various parts of Nepal in creating such areas, the lack of a proper legislation in this regard is being sought to be remedied. SEZ has been envisioned in Nepal with a view to: to attract FDI and modern technology, to promote the export oriented industries, to provide the logistics and infrastructure facilities and the avoidance of double taxation, to provide competitive and conducive environment for the industrial investment, to safeguard the interest of the investors
Industrial Policy 2010
The Industrial Policy, 2010 has been issued having the salient feature where export oriented industries and industries based in export promotion house and Special Economic Zones are entitled to get declared facilities and assistance on customs duty, excise duty and VAT. Industries established in Special Economic Zone are entitled to get the declared income tax exemptions, VAT related facilities and assistance, and exemptions on customs duty and local tax.
Promoting Special Economic Zone (SEZ) in Nepal as a totally commercial area specially established for the promotion of foreign trade that has economic laws more liberal than a country's typical economic laws attracting both: foreign and domestic investment. Also develop SEZ as a delineated enclaves treated as foreign territory for the purpose of industrial, service and trade operations, with relaxation in customs duties and a more liberal regime in respect of other levies, taxation, foreign investments and other transactions.
Achieve steady improvements in the establishment and by proposing measures to create a steadily improving investment friendly environment, removing and simplifying outdated unnecessary procedures, approvals and legislation, facilitating greater private sector role in SEZ development for operation and development of SEZs.
Achieving Mission and Vision
With a view to achieve the mission and vision, the works to be carried on are: as one stop agency which facilitates and support local and foreign investors in both manufacturing, and services sectors as they move up the value chain to achieve higher sustainable returns and
seek out new opportunities.
Growing Industry verticals: while Nepal may be a regional attraction in various areas, we have to focus on expanding and extending existing industry verticals. Exploring new growth areas will contribute towards creating good bond and sustaining our competitiveness.
Enhancing business environment: while interacting with investors and promoting investments, we have to provide feed back to other government agencies to ensure that infrastructure and public services remain efficient and cost competitive. Government as the facilitator and/or regulator rather than developer and operator.
Nepal had been granted membership of WTO on 23rd April, 2004, and the SAFTA framework agreement was singed on 6th January 2004 and BIMSTEC free trade area on 8th February, 2004. They have been landmark in the history of Nepalese trade as these would help integrate Nepalese trade to regional and trans regional framework.
In general, Special Economic Zone( SEZ) has set of objectives: to attract foreign investment, to promote export trade leading to an increase in foreign exchange, to create job opportunities, to accelerate technology transfer, to add value to domestic resources, and promote regional development.
In setting up SEZ the government will have to massively invest in creating infrastructures as well as it loses revenue from those industries inside SEZ for a number of years, especially in the initial phase.
Hence the costs to the governments are: Investment by the government on land, infrastructures and other construction, Investment by domestic entrepreneurs for setting up units in the Zones, Maintenance costs, Taxes exemption, Residual value of land and buildings.
Benefits to the national economy are: Labor Return (Salaries, Insurance and other benefits), Government property return , rental of land and buildings), Net income of SEZ administration and supporting agencies including utilities, Taxes collectable, Foreign exchange, Enhancement of technological capability
(Bhairahawa SEZ Administrative Block)
As regards the current status of SEZ in Bhairahawa, Simara, it is under construction. Whereas in Bhairahawa the administrative block and the Service centre are at the final stage of completion. The Feasibility Studies Completed are in the areas of: Panchkhal, Biratnagar, Kapilvastu, Jumla, and Dhading. The Feasibility Studies that are Ongoing are in the areas of: Gorkha, Dhanusha, Siraha, and Rautahat. The Prefeasibility & Site Assessment areas are in: Ratmate Jilling, Nepalgunj . Nuwakot. Likewise, efforts are underway to incorporate the SEZ portion in the new Industrial Enterprise Ordinance and the operational Manual for the effective and the efficient operationalisation of SEZ is on the offing.