Jamaican Free Zones

The Jamaican Free Zones are a government initiative to encourage foreign investment. Businesses operating within these zones have no tax on their profits, duty exemption on imports and exports, and relaxed customs procedures. However, they must export 85% of their produce outside of CARICOM.

Created under the Jamaica Export Free Zones Act the zones are operated by the government. Businesses that operate in the zones must be in the fields of warehousing and storing, manufacturing, redistribution, processing, refining, assembling, packaging, and also service operations. These businesses gain 100% tax holiday in perpetuity, no import licensing requirements, and exemption from customs duties on capital goods, raw materials, construction materials, and office equipment.

Jamaica has four free trade zones but companies outside of the zones can apply for Free Zone status as Single Entity Free Zones. The government initially used the zones to promote the garment and related industry, this push expanded to information technology in the 1990s with addition clauses added to the act in 1996.

From 1985-1995 the combined export output of the zones in textiles was US $1.31 billion. Around 12,000 people were employed in the textile factories, about 1.6% of the total workforce. however since 1995 the industry has benn in a serious depression due to structural problems in Jamaica and increased foreign competition.

The first free zone created was the Kingston Free Zone (KFZ) in 1976 on ground adjacent to the Kingston Container Terminal. The 18 hectare site contains 72,835 m² of factory space. The other major free zones are Montego Bay Free Zone (MBFZ), Garmex Free Zone, Hayes Free Zone, and Cazoumar Free Zone.

WTO rule changes agreed at Doha will end export subsidies in 2007.

The free zones have been attacked as US subsidised "sweatshops", the minimum wage is US $30 a week.

External link

Text of the Export Free Zones Act, 1989 (http://www.globalmarch.org/virtuallibrary/ilo-natlex/jamaica-export-89.htm)