Parliament has approved a significant amendment to the Special Economic Zone Act, raising the minimum investment required for projects to USD 500 million and introducing a series of incentives intended to attract large‑scale foreign capital. The measure, passed with the support of 46 members, marks one of the most consequential revisions to the law since its adoption.
The bill was introduced on behalf of the government by Ibrahim Sujau, the Member of Parliament for Baarah, and was reviewed by the Committee of the Whole House before its final passage.
At the centre of the amendment is the new investment threshold. Lawmakers stipulated that projects within Special Economic Zones must involve no less than USD 500 million, a requirement intended to ensure that only ventures of substantial scale and impact will qualify.
The legislation also reshapes the framework for development by allowing zones to be designated as 'Sustainable Townships'. These are defined as large‑scale real estate or integrated tourism projects managed under a single authority and required to provide legally mandated facilities and services.
Under the new framework, townships must employ sustainable infrastructure and resources to limit environmental impact, while also offering residential facilities, utilities and essential services for inhabitants. Eligible projects include integrated tourism developments combining luxury services, large‑scale real estate ventures featuring luxury residences, and international‑standard facilities such as hospitality training centres or health service centres.
To encourage the scale of investment required, the amendment introduces a preferential tax regime. Developers will pay income tax at 5 percent for the first 10 years, 10 percent for the following decade, and thereafter at the standard rate under the Income Tax Act. Capital goods imported for the development of zones will also be exempt from import duty.
The Committee of the Whole House added a further provision to secure long‑term state revenue. The government may now collect a Property Transfer Tax of 4 percent on the total value of rights sold under long‑term leases, structured on strata principles, for villas or rooms within tourist resorts or integrated resorts located inside Special Economic Zones.