What is Special Economic Zones (SEZs)

Special Economic Zones (SEZs) within South Africa are geographically designated areas 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)
   

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.

Customs controlled areas

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 that require registration or licensing in terms of the Customs and Excise Act, 1964 and 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.

Registration of an SEZ and licensing of SEZ Enterprises

For more on registration of an SEZ or licensing of a Customs controlled area Enterprise, click here.

Rebate provisions

• 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 of Schedule No. 1.
• 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 of Schedule No. 1. 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 of the Customs and Excise Rules, 1995 and registered in terms of such item, provided:
  • The Customs controlled area Enterprise complies with:
    • Any notes to that item;
    • The notes to Schedule No. 3; and
    • Section 75 of the Customs and Excise Act; and
    • VAT is paid on goods imported by the Customs controlled area Enterprise under any item in Schedule No. 3. To declare goods and services rendered, you can complete the form VAT267 – Declaration in respect of supply of goods or services to or from a CCA or an SEZ – External Form or for more information, see our VAT webpage. 

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