SEZ vs. EPZ

Difference Between SEZ and EPZ

SEZ is the Special Economic Zone selected by the government for carrying out developmental activities in that particular area. Special laws are created for governing the economic activities in this special zone so as to attract businesses and industries in this area. The government tries to make the laws flexible and encouraging for the investors. The investments from foreign and native investors can be established in this special zone and the products can be exported or sold within the country.

EPZ or Export Processing Zone is for assisting and facilitating the manufacturing companies in exporting their goods. This is to encourage exports and the companies are given tax rebate and tax holiday when the business is at initial stages so that the manufacturers can establish themselves in the global market.

Both these zones were created by governments to attract foreign and domestic investments for developing the economically backward areas. These special zones were also intended to provide employment to the local people and promote technology. Both these concepts were aimed fat overall growth of the country.

EPZ was used my big multinational companies and they enjoyed the tax holidays and then moved their business to another country to enjoy the tax holiday there. This lead to creation of SEZ so that the basic aim behind created SEZ and EPZ could be achieved. SEZ have been successful in most of the countries.

There are many differences between the two. In fact the only similarity between these two is the long term goal. Some of the differences between them are given below:

  • SEZ covers larger geographical area while EPZ covers some special areas only.
  • SEZ are in developing and developed, both type of countries while EPZ are mainly located in developing countries.
  • SEZ aim to develop domestic business while EPZ aim to promote exports.
  • SEZ involve infrastructural growth, manufacturing units and other services while EPZ are concerned about the manufacturing units only.
  • SEZ aim at holistic approach and focus n overall development of the zone while EPZ have focused themselves to growth of manufacturing units and exports.

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