SEZ Glossary
A comprehensive reference of terms used in Special Economic Zone policy, investment promotion, and trade. Covers zone types, incentive instruments, governance structures, and investment concepts.
Zone Types
Special Economic Zone (SEZ): An umbrella term for any designated area with preferential economic regulations. Free Trade Zone (FTZ): A zone focused on import/export trade with duty-free treatment. Export Processing Zone (EPZ): A manufacturing zone primarily oriented toward exports. Industrial Park: A planned area with shared infrastructure for manufacturing tenants. Technology Park / Science Park: A zone focused on R&D, technology, and innovation. Financial Free Zone: A zone with a distinct regulatory framework for financial services firms. Freeport: A port area with duty suspension for goods in transit or processing.
Incentive Instruments
Tax Holiday: A fixed-term corporate income tax exemption, typically 5–20 years. Duty Exemption: Waiver of import duties on capital goods, raw materials, and components. 100% Foreign Ownership: Allowing non-resident entities to hold full equity in zone companies without a local partner. Repatriation Rights: Permission to transfer profits, dividends, and capital abroad without restriction. One-Stop-Shop (OSS): A single administrative window that handles all investor permits, licences, and regulatory approvals.
Governance and Investment Terms
Governing Authority / Zone Authority: The entity responsible for zone administration, licensing, and infrastructure. FDI (Foreign Direct Investment): Cross-border investment where the investor holds a lasting interest and management influence. Rules of Origin: Criteria that determine the national source of a product for trade agreement purposes — critical for SEZ-based exporters seeking preferential tariff access. Pillar Two: The OECD's global minimum corporate tax of 15%, which limits the competitiveness of certain SEZ tax holidays for MNC subsidiaries.