12 Sep Unleashing the power of special economic zones
Highly competitive incentives are helping the Jamaica Special Economic Zone Authority attract businesses from a variety of sectors
Established by the government in 2016, the Jamaica Special Economic Zone Authority (JSEZA) has played a crucial role in helping the country achieve an enviable global position and contributed to Jamaica’s economic performance by providing employment, foreign direct investment, liability driven investment and capital investment. In the most recent Doing Business Report from
the World Bank, Jamaica once again maintained its position as the top-ranked nation in the Caribbean.
One of the major factors that has contributed to this success is the ability of JSEZA to regulate the space effectively and attract investors through highly competitive incentives. This has led to the growth of the global digital services and manufacturing sectors. With the global digital services sector
(GDSS) growing exponentially in the midst of a global pandemic.
“Our mandate is to increase investments, grow exports and train Jamaicans, and we have had a great deal of success,” explains Kelli-Dawn Hamilton, CEO of JSEZA. “This is encouraged by the application of lower corporate income tax rates. Companies are able to benefit from 12.5%, which can go down to 7.75%, as opposed to the usual 25% which is applicable outside of the SEZ Regime.
“This has led to a boom across a variety of industries. One of the success stories is the GDSS which has grown rapidly from a nascent industry in the ‘90s to now hiring more than 60,000 people in Jamaica. We have moved from call center activities to more
upskilled services and the benefit of that is tremendous.
“We have also seen an increase in the manufacturing space which opens up further opportunities for exporting goods. Furthermore, we’re looking to emerging markets and seeking if there are opportunities that can be explored. We recently welcomed a drydock company that will further support Jamaica’s logistics hub initiative. This will bring more diversity to SEZs.”
In addition to the incentives on offer, the Authority works to ensure its legislation is competitive and adaptable — a fact that proved crucial coming out of the COVID-19 pandemic.
“We created a work from home initiative that will allow companies within the SEZs to allow 30% of their workforce to work from home,” reveals Hamilton. “Come January 2024, companies will be able to create a hybrid work module and be more flexible, thus creating myriad opportunities for GDSS companies.”
Expansion plans in the works
In the almost seven years since JSEZA was established, the number of SEZs has grown to 143, testament to the entities impact in economic growth and job creation. Such has been the success of these zones that there are plans to expand, a move that Hamilton believes will help attract a variety of new industries.
“In regards to the expansion of SEZs, we have 32 projects in the pipeline and the value of these is around $3 billion. Some of these projects will be game changers for us because they’re moving into areas that we are currently not operating in,” she explains. “We’re looking at organic manufacturing, green energy and sustainable development. This type of investment really excites us as we are particularly interested in the management of our natural resources.
“We are also looking to create an industrial park within a flagship SEZ which will be integrated with residential areas, schools and training facilities. The zone will look to attract those in the manufacturing sector
and the GDSS industry, making it a true logistics hub.
“It will be created in Caymanas in the parish of St. Catherine, which is just 20 minutes from Norman Manley International Airport and only a 10 minute journey from the seaports. It’s perfectly positioned to allow trade to happen quickly and efficiently, making this project a real game changer.”
Building a close relationship with investors
In an effort to further attract new investment and strengthen relationships with existing clients, JSEZA recently opened a Business Acceleration Center (BAC) in Kingston Wharves Special Economic Zone.
The center will provide expedited services such as acquiring permits and authorizations, while also providing a Business One-Stop Shop and Aftercare Service to strengthen relationships through on-premises and in-person interactions.
“What the BAC allows us to do is be at the beck and call of our investors. Wherever there are challenges arising, we’re right there to help to solve the problems,” reveals Hamilton. “That’s important for us because these zones are about facilitating the movement of goods and services from Jamaica to the rest of the world. In order to achieve this effectively, we needed to be on the ground.
“The center provides the opportunity for clients to deal with us directly and immediately address any issue they may have. This customer centric approach is what ensures we are competitive and shows we are continuing to facilitate incentives for businesses.”
While the BAC is set to help with Jamaica’s push to become a leading logistics hub, the plan is to open more centers in other zones across the country. “These will not only provide quick and effective support services, but shows we are not just regulators but facilitators as well,” she states.
“There are projects underway to create a technology hub and a Manufacturing Special Economic Zone where pharmaceutical companies can explore the manufacturing side of the business, as well as a media hub that will focus on creative industries such as film production,” adds Hamilton.
“When you think about world-class athletes, you think of Jamaica. That’s the reason that we want to create a special sporting economic zone. We want to capitalize on our global reputation in athletics by building a sports zone where teams from anywhere in the world can train in warm-weather conditions. They will also be provided with access to our leading coaches and nutritionists. We believe this could provide a significant economic boost and is a good example of the type of opportunity JSEZA wants to create.”