SPECIAL ECONOMIC ZoneS (SEZ)

South Africa’s broad economic policy includes schemes designed to encourage and promote international competitiveness in the country’s manufacturing sector. This is set out in government’s Economic Programme of Action, where Special Economic Zones (SEZs) are created in order to encourage increased levels of foreign direct investment in the economy. This will be achieved primarily through the giving of incentives to attract foreign and local investment within these zones in order to boost the country’s economic attractiveness.
 

The South African concept

Special Economic Zones (SEZs) are geographically designated areas of country set aside for specifically targeted economic activities to promote national economic growth and export by using support measures to attract foreign and domestic investments and technology. 

Categories of SEZs that may be designated as such by the Minister of Trade and Industry may include:
  • Free ports;
  • Free Trade Zones (FTZs);
  • Industrial Development Zones (IDZs); and
  • Sector Development Zones (SDZs)

Customs controlled areas

SEZ or any part thereof may be designated as a Customs controlled area.  There may be more than one (1) Customs controlled area within a single SEZ.  These areas are controlled by Customs to the extent for those activities that require registration or licensing in terms of the Customs and Excise Act, 1964.  Only the premises where these activities are executed will be controlled by Customs.  Customs controlled area Enterprises are premises permanently located within a Customs controlled area where activities that require registration or licensing with Customs are executed and controlled by Customs.

There are specific Customs Rebate Provisions for Customs Controlled Areas:

  • Goods of any description imported by a registered Customs controlled area Enterprise into the Customs controlled area may be imported under rebate item 498.01.
  • Goods of any description imported by a registered SEZ Operator for use in the construction and maintenance of the infrastructure of a Customs controlled area in an SEZ may be imported under rebate item 498.02. Infrastructure is limited to the basic structural elements permanently installed in a Customs controlled area, e.g. sanitation, electricity, roads, bridges and buildings.
  • Goods may be entered under any rebate item of Schedule 3 by a Customs controlled area Enterprise as contemplated in rule 21A.01 and registered in terms of such item, provided:
    • The Customs controlled area Enterprise complies with:
      • Any notes to that item;
      • The notes to Schedule 3; and
      • Section 75; and
    • The VAT is paid on goods imported by the Customs controlled area Enterprise under any item in Schedule 3.

Transition of current IDZs

In terms of the transitional provisions of Section 39 of the SEZ Act, 2014, all IDZs in operation before 9 February 2016 will by law convert to SEZs.

Any existing IDZ Operator must ensure that the IDZ complies with the framework regulating SEZs in terms of the SEZ Act, 2014, within three (3) years of commencement of the SEZ Act, 2014.

Note: The Minister of Finance has to date not designated any special economic zones (SEZs) for the purposes of claiming the ETI and therefore claims in excess of the “normal” ETI criteria would not be eligible as per section 6 of the ETI Act (No 26 of 2013).

How to Control the Movement of Goods?

In addition to the Customs client number, a Customs control area number [one per Customs control area] will be allocated by the system. The number will be of paramount importance when goods are moved between warehouses/rebate users in the same or other Customs control areas.
For more on registration of an SEZ, click here.
 
Last Updated: 04/09/2017 10:33 AM     print this page
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 Top FAQs

SEZ - What forms must be completed to register with Customs as an SEZ Operator?
SEZ - What forms must be completed to register with Customs as an SEZ operator? For the purpose of registration as an SEZ Operator the applicant must complete the following forms –

SEZ - What is a SEZ SARS Office?
The South African Revenue Service Customs Office located in an SEZ operating under the Controller / Branch Manager for the area within which the SEZ is designated,

SEZ - What is a SEZ (Special Economic Zone) operator?
The holder of a valid SEZ Operator permit granted by the Minister of Trade and Industry in terms of Section 32(4) of the SEZ Act, No. 16 of 2014,

SEZ - What is a Customs controlled area?
An SEZ or any part thereof may be designated as a Customs controlled area. There may be more than one (1) Customs controlled area within a single SEZ. These areas are controlled by Customs to the extent for those activities

SEZ and IDZ - What do the acronyms SEZ and IDZ stand for?
Special Economic Zone in terms of the Special Economic Zones Act No. 16 of 2014. Special Economic Zones (SEZs) are geographically designated areas of country set aside for