Government of Nepal

Ministry of Industry

Special Economic Zone Authority, Nepal

विशेष आर्थिक क्षेत्र प्राधिकरण, नेपाल

Concept of Special Economic Zone (SEZ)

Special Economic Zone (SEZ) is the advanced concept of Export Processing Zone, and is also called the "Free Trade Zones" which includes Export Processing Zones, Special Trade Zones, Tourism-Entertainment Zones, Information and Technology Parks, Banking etc.

The main objectives of creating "Special Economic Zone (SEZ) are:

  • To develop competitive capacity of export oriented goods and services in the international market.
  • To attract Foreign Direct Investment (FDI).
  • To attract domestic and foreign capital and advanced state of-the-art technology by providing appropriate facility for the industry through one door.
  • To widen the export trade all over the world.

Investment on land, infrastructures and other construction by the government and investment by domestic investor/entrepreneurs for setting up units in the zones, maintenance costs and taxes exempted are the costs to the nation while labor return, rental of land and buildings, net income of SEZ administration and supporting agencies including utilities and taxes collectable are benefits to the national economy.

The investors in SEZ are granted permission and administered in all respect of export and import under strictly simplified ~One Window Policy~or one stop service. They have liberal tax regime with exemption to varying degrees in income tax, excise duty, VAT and others taxes and duties. They have facilities of repatriation of investment, immigration, banking, export-import facility, foreign workers employment etc. All relevant services such as custom, banking, insurance, police, fire, medical etc. are at the door. SEZs are governed by liberal production oriented labor law with hire and fire policy forbidding union and strikes. Instead, the labors have wages much higher than outside SEZs, fixed working period and liberal extra benefits and allowances.

Industrial Policy 2010:

“The Industrial policy, 2010 has been issued having the salient feature where export oriented industries and industries based in export promotion house and Special Economic Zones are entitled to get declared facilities and assistance on customs duty, excise duty and VAT. Industries established in Special Economic Zone are entitled to get the declared income tax exemptions, VAT related facilities and assistance, and exemptions on customs duty and local tax.”