What is SEZA Botswana?

SEZA Artistic Impression

SEZA stands for by the Special Economic Zones Authority.It is a parastatal under the Ministry of Investment Trade and Industry.It was empowered by the Special Economic Zones (SEZs) Act, 2015.Its establishment was mainly to develop ,regulate and manage special economic zones in Botswana.

What are Special Economic Zones  (SEZs) ?

SEZs are geographically delineated area, usually physically secured.It has single management or administration and offers benefits for investors physically within the zones.These areas also have  separate customs area (duty-free benefits) & streamlined procedures

These special zones  attract Foreign Direct Investment, promote exports & industrialization; (2) serve as “pressure valves” to alleviate large scale unemployment, (3) support wider pilot reforms, (4) act as experimental laboratories.They also create jobs and facilitate for technology transfer.

Special Economic Zones Regulations Act was signed by the Minister and published on 21st June 2019 for immediate implementation.These regulations cover establishment, development and management of SEZs in line with the SEZ Act and make provision for licensing and rules governing the zones

SEZs can be Established on public or private land . A proposal can be  initiated by authority or outside party. These proposals also undergo different phases/offices  before being authorized .

Authority- Submits proposal to the Local Authority for review to be decided upon within 60 days and receives and assesses proposal from outside party before recommending to Local Authority.

Outside Party-Submits proposal to Authority for preliminary review to be decided upon within 14 days. In addition to proposal submits application for developer license and/or zone management licence as required

Local Authority-Reviews proposals submitted by the Authority within 60 days of submission. It undertakes consultation with affected persons where necessary. The local Authority then Approves or rejects proposals and informs the Authority of decision or recommends modifications

Minister – Declares SEZ in accordance with Section 29 of the Act following approval of proposal by Local Authority.He/She may revoke declaration on recommendation of the Authority

Once approved development of SEZ can be done in 3 ways. It can be SEZA own initiative, a Public-Private Partnership arrangement or an Independent Developer. The developer has responsibility once they have been approved by the local Authority. This  Includes  but are not limited to iimplementing  SEZ development plans in accordance with approved master plans and Development Agreement; Develop in commercial manner; in accordance with Act and consistent with long-term sustainable economic development goals of the Authority; Adhere to performance requirements of phased development schedule of the SEZ ;Pay fees and taxes due to the Authority or other authority; Maintain company books, records, accounts and financial statements ;Obtain prior approval of the Authority when transferring occupancy rights with respect to land and other assets and also comply with all other obligations.

Investors in SEZs

The following business activities and services may be located in an SEZ (eligible for Incentives):Agro business activities, Manufacturing activities,Warehousing, distribution or logistics services and Internationally traded services.

Any person wishing to carry on business in an SEZ shall apply to the Authority for an investor licence.There is classification of these investors. They are main investors and those providing support services to main investors.Those providing support in the form of restaurants, grocery stores etc. will not qualify for incentives, but will apply for license to operate businesses in the zone

Application to include:

  • Description of proposed activities;
  • Proof that project constitutes an investment compatible with approved detailed master plan of SEZ
  • A business plan covering class or kind of goods; raw materials to be used; target markets with percentage breakdown
  • A financial plan showing sufficient capitalisation and access to adequate debt financing
  • Where the applicant wishes to apply for Incentives, a statement establishing that 100% of the applicant’s annual production or sales except in the case of derogation, will be exported
  • Time schedule for design, construction and activation of applicant facilities
  • Number of employees and skill levels to be employed
  • Environmental impact assessment where applicable
  • Any other information as required by the Authority
  • There are investment rules that investors inSEZshould adhere to and uphold. These includes Notification to Authority in the event of changesto information, discrepancies noticed, maintenance of records and accounts
  • National treatment: treatment accorded to foreign entities in the SEZ equal to that accorded to nationals (no domestic ownership requirements or minimum capital requirements when reinvesting profits)
  • Prohibition of sale of land without Authority’s consent
  • Safeguard against speculative investment: Authority permitted to seize interest in the SEZ land; rescind initial sale or lease agreement; require purchaser to pay open market value of the transferred title if land purchased for speculative investment
  • Acquisition of Land and Commencement of construction: acquire and take possession of  real estate in SEZ within 60 days after issue of licence and start construction and business activities no later than 24 months after licence is issued
  • Completion of Construction or Development: all construction or development to be completed within 24 months of the date of purchase or in accordance with agreements

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