On Friday afternoon March 11, 2011 the Minister of Tourism, Economic Affairs, Traffic and Telecommunication Franklyn Meyers signed the financial agreement of 270.000 Guilders with USONA for the SEI project E-Zone.
An Economic Zone (E-Zone) is a specially designated area or space where established companies are eligible for special tax incentives. The primary condition for eligibility is that a minimum of 75% of the products or services produced by these companies are for export only. E-zones are a form of free zones. As St. Maarten is already a duty free port, in particular for products, due to the lack of import and export tariffs, companies established in the E-Zones will only render services abroad. The goal of e-zones is to increase investment by foreign investors, typically international businesses who will broaden the island’s tax base.
St. Maarten is a mono economy and very vulnerable to external and internal shocks. Therefore, this project will allow for the broadening of the tax base and the development of an alternative industry to Tourism.
Companies which are established in the e-zones will benefit from special fiscal incentives and as such will be taxed at 2% profit tax rate, which is significantly lower than the regular profit tax rate outside of the e-zones (40%). There are no import duties or turnover tax due for services that are rendered within the E-Zone.
The establishment of economic zones will (a) to boost the investment climate of St. Maarten, (b) create employment opportunities, and (c) broaden the tax base.
The E-Zone project is funded by the Dutch Government and coordinated by USONA and the department of BAK.