THE LAW FIRM OF HAZIM AL MADANI ATTORNEYS AND LEGAL CONSULTANTS
What Are Special Economic Zones Its impact on investment and investors
Special economic zones are among the most crucial economic mechanisms employed by numerous countries worldwide to invigorate investment and foster economic growth. These zones, also referred to as free zones, special economic zones, or industrial zones, are typically established by governments in partnership with the private sector. They offer financial, customs, tax, and administrative benefits and privileges to attract investment and stimulate economic activities.
Special economic zones play a vital role in enhancing the investment environment and bolstering a country’s appeal to investors. They can significantly influence economic growth, industrial development, and the emergence of new sectors. In this article, we underscore the importance of special economic zones and their impact on investment and investors. We will also mention a recent decision by the Crown Prince, issued on the 21st of Ramadan, which directed the launch of four special economic zones in the kingdom, thereby augmenting the kingdom’s standing as a global investment destination.
Here, we enumerate some of the primary impacts of special economic zones on investment and investors, including:
- • Provision of financial and tax advantages, which rank among the most vital aspects that draw investors to special economic zones.
- • Offering a streamlined and well-organized administrative and regulatory environment, expediting the processes for company establishment, license and permit acquisition, simplifying customs and logistics procedures, and supplying logistical support services and infrastructure.
- • Fostering technology and innovation, as special economic zones incentivize the advancement of technology and innovation in industries situated within their boundaries. They can provide inducements for companies to invest in research and development and to employ contemporary and innovative technology in production and manufacturing processes. This aids in elevating product quality and enhancing the competitiveness of existing industries.
We would like to emphasize the significance of the Crown Prince’s decision, issued on the 21st of Ramadan, to initiate four special economic zones, which will unveil new developmental horizons in the kingdom. These zones will capitalize on competitive advantages for each region to buttress vital and promising sectors, including logistics, industrial, technology, and other priority sectors for the kingdom. The new special economic zones have strategic locations in Riyadh, Jazan, Ras Al-Khair, and King Abdullah Economic City, north of Jeddah, which contribute to the realization of Vision 2030 and bring qualitative transformations to the Saudi economy.
In conclusion, we note that the authority responsible for regulating these four new special economic zones is the Economic Cities and Special Zones Authority. The primary objective of this new special economic zone decision will be reached by attracting international companies, and foreign direct investment, and promoting the expansion of future qualitative sectors through the establishment of world-class infrastructure. This infrastructure will support both local and international investors and offer distinguished investment opportunities, supported by an integrated and advanced system of regulations and rules.
In conclusion, we note that the authority responsible for regulating these four new special economic zones is the Economic Cities and Special Zones Authority. The primary objective of this new special economic zone decision will be reached by attracting international companies, and foreign direct investment, and promoting the expansion of future qualitative sectors through the establishment of world-class infrastructure. This infrastructure will support both local and international investors and offer distinguished investment opportunities, supported by an integrated and advanced system of regulations and rules.
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