These are designated areas within a country that operate under different economic regulations than the rest of the nation. These zones are typically established to attract foreign investment and promote export-oriented industries. Businesses operating within these areas often receive incentives such as tax breaks, reduced tariffs, and streamlined customs procedures. For example, a nation might establish one to encourage the manufacturing and export of electronics, offering reduced import duties on components used in assembly.
The establishment of these special areas can significantly boost a nation’s economy by increasing foreign exchange earnings, generating employment opportunities, and facilitating the transfer of technology and managerial expertise. Historically, their creation has been a strategy employed by developing countries seeking to integrate into the global economy and enhance their competitiveness in international markets. These areas contribute to economic growth and attract investment.