Special Economic Zones in the OIC Region:
Learning from Experience
51
Zones Fiscal Incentives Non-fiscal Incentives
Exemptions for import of raw direct
materials and supporting materials for
production purposes
No import income tax
No tax agency incentives
Reduction in property tax in compliance of
law and regulation
Jordan
Aqaba Free Zone
5% income tax on income generated from
activities within ASEZ in certain sectors
Exemption from social service tax
Exemption from sales tax on majority of
goods and services
Exemption from annual land and building
taxes on utilised property
Exemption from taxes on distribution of
dividends and profits on activities in ASEZ
and outside Jordan
No tariffs or import taxes on imported
goods for individual consumption and
registered enterprises
No foreign equity restrictions on
investment in tourism, industry, retail
and other commercial services
100% foreign ownership available
No foreign currency restrictions
Full repatriation of profits and capital
Streamlined labour and immigration
procedures - project may employ up to
70% foreign labour as an automatic right
Jordan
King Hussein Business Park
Ma’an Development Area
5% income tax on activities within the
economic zone
Exemption from taxable income from
export
Exemption from sales tax on goods sold
into (or within) the economic zone
Exemption from import duties on all
materials, instruments and machines
within economic zone
Exemption from social services tax
Exemption from dividends tax on income
accrued within the economic zone
No restrictions on foreign ownership
Streamlined business procedures,
licensing for expatriates and property
registration/transfer procedures
Flexible labour regulations
Improved enforcement of intellectual
property rights
Streamlined customs regulations
Clear land ownership policy
Malaysia
Bayan Lepas FIZ
Port Klang Free Zone
Iskandar
Pioneer firms receive exemption from
corporate income tax and development tax
of 5% for tax holiday period of 5 to 10
years. Unabsorbed capital allowances
incurred during the pioneer period can be
carried forwards
Investment Tax Allowances are also
available for companies which cannot
obtain pioneer status and allows an
allowance of 60% on capital expenditure
100% foreign ownership allowed for
companies exporting >80%
No equity restrictions
Foreign exchange administration
flexibilities and expatriate positions
Unrestricted employment of local and
foreign workers for some sectors
Protection of intellectual property