Number of special economic zones in the world from 1975 to 2018

The number of special economic zones worldwide has increased, reaching *** thousand in 2018, from about ** in 1975. Free trade zones facilitate the accessibility of investors to the market and offer an encouraging incentive for foreign direct investments.

 Overview of Special Economic Zones

Free trade zones, also known as special economic zones (SEZ) are areas in a country that have unique trade rules and regulations other than the country’s main regulations. These zones increase investments, especially foreign investments, as they provide the environment with supportive policies and infrastructure that reduce risk and increase incentives. In 2018, there were free trade zones in around 147 countries worldwide. Among the Middle East and North Africa (MENA) region, the United Arab Emirates had about 47 SEZ which is the highest in the region. Special economic zones provide entry to new markets with the extra support of having a neutral political zone.

 MENA Special Economic Zones

  Free trade zones are important as they often have a large influence on political relationships between countries. Free trade zones provide multiple advantages to the country by promoting and supporting growth and integration through infrastructure development, greater investments, and providing jobs. To attract foreign investors, free trade zone operators in the MENA region offer ownership rights, tax and duties exemptions, and relaxed labor laws. The value of foreign direct investments in the MENA region almost reached ** billion U.S. dollars in 2017. The value of foreign direct investments into the UAE exceeded **** billion U.S. dollars by 2019, with the largest share being in the real estate sector. The largest foreign direct investments to the United Arab Emirates were from the United Kingdom of Great Britain at more than ** billion UAE dirhams in 2015.