More and more people and businesses worldwide are suffering from less security, less freedom and ever-changing rules. Traditional governance frameworks from previous centuries are reaching their limits in the fluidity of the modern economy. Important country-wide reforms that address this are difficult due to political struggle and the rigidness of the existing systems. To counter this, countries have established Special Economic Zones (SEZ) to try and attract investment by lowering taxes or tariffs in a limited territory.
However, with more than 3.000 Special Economic Zones in operation worldwide in 153 countries, or 80% of all countries, simply creating a zone with lower taxes is hardly a competitive advantage anymore. Investors already have hundreds of places where they can go and not pay taxes.
To create long-lasting prosperity in the 21st century, countries need to consider further factors besides low taxes. The entire institutional framework must be addressed. That’s the problem, Prosperity Zones were made to solve.
A Prosperity Zone is a semi-autonomous territory, administered by an operating company, which functions as a hub for investors and a safe haven for the development of new technologies, such as Blockchain and smart city tech. They do this by offering a 21st century legal framework, corruption-free, efficient and safe. It comes with a well aligned incentive structure and a secured legal position established in a contract with the Host State, taking into account it’s specific legal and political requirements. Prosperity Zones are the next evolution in Special Economic Zones, and their status is comparable to Hong Kong’s or Macau’s relationship with China.