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An Explosion Of Free Zones Worldwide

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Free Zones Worldwide – An Explosion

The ‘new economy’ comes with new features. Free Zones are now a worldwide phenomena. Dedicated areas and territories designed by various countries specifically to attract predominantly foreign investors – by way of business incentives, special legislation, favourable tax regime etc. While in some parts of the world the concept of free zone is known already for decades, some other countries are still discovering the concept.


For mainland China, opening its first free zone in September last year was a major event. The Shanghai Free-Trade Zone seems to be a success already. Launched under the name: “China (Shanghai) Pilot Free-Trade Zone”, this first free trade zone in mainland China covers 29 square kilometres of the Zone and is being used as a testing ground for a number of economic and social reforms. For example, the sale of video game consoles, banned in China since 2000, is allowed within the zone and Microsoft’s Xbox is available there as well.

The volume of foreign investment is gradually increasing. At the end of June the total number of 1245 foreign companies was reported. Investors come from more than 60 countries including USA, Japan and Germany.


Also in Europe the free zone initiatives continue. The government of Former Yugoslav Republic of Macedonia continues with its project of Free Economic Zones located in Skopje, Tetovo and Shtip, while others have been planned to open in seven other regions of the country. So far, the economic zone of Skopje, known as Bunarxhik and located near the airport and Corridor 8 highway works at full capacity, other areas are working on developing the required infrastructure.
While the project faces heavy criticism, the Central bank data show increase of foreign investments in the country (EUR 160 million in 2013) and thousands of jobs being created.


Despite the political uncertainties in the region, the legal framework for the establishment of The Crimea Economic Zone was adopted in June. The law a.o. cancels state taxes in the Free Economic Zone for the coming 10 years. Gambling was declared legal in the area, as well as in Sochi.


In the Karachi area, a new economic zone is being developed as well. It has been designed to cater for the needs of medium and large entrepreneurs, aspiring to invest especially in the engineering and downstream steel industry of Pakistan. Various tax incentives will be guaranteed to foreign investors for the minimum of 10 years.

South Africa

Within the next 100 days, two special economic zones will be established in the Dube trade port and the Tshiame industrial development. The regulatory framework has been drafted already. While the first zone will specialise in high-value, niche agricultural and horticultural products, as well as manufacturing and value-addition for the automotive, electronics and clothing industries, the zone in the Free State will focus on automotive, clothing and agro-processing activities.


In the meantime, time in Dubai does not stand still. With Dubai Design District (ran by Dubai Technology & Media Free Zone Authority and dedicated to luxury, design, art and fashion), the number of free zones comes to 22. The free zones in the emirate of Dubai account for almost twenty thousand companies and two hundred thousand job opportunities and their revenue represents one fourth of the Dubai GDP.

Nowhere in the world is the variety in free zones bigger. No wonder that the UAE has established the World Free Zone Organisation.


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