Almost all countries are fast developing in today’s modern era and so are their economies. Every country has attracted industries and entrepreneurs from all over the world which has results in more revenue and thus leading to a hike in the nation’s overall economy. But, because of the economies of many countries are nearly equal and hence a tough competition prevails between the two. In your everyday life, if you want to attract someone, you try to do certain things which the other person likes and gets attracted to. There is a similar scenario between countries and the businesses.

To attract businesses and industries to their own country, the government introduces new laws which would supposedly attract the industrialists and entrepreneurs and urge them to start their business in that country.

Some commonly used techniques to attract these fish are low taxes, discounts in electricity and water usage, land tax waivers etc. But, it is impossible to enact these ordinances in all parts or wherever the company wants. For an instance, if a company likes to have some waivers in land in the heart of the city, it is very difficult for the government to allow waivers as the land value is very high and any waiver will result in massive loss for the government.

So, to solve these problems tactically, governments have introduced the concept of enterprise zone. Commonly known as UEZs, these are reserved areas of land where companies can start their business and avail huge waivers and discounts in the government. The number of restrictions is drastically reduced in these areas to attract more businesses. The common taxes such as land tax, water tax, electricity tax etc. are waivered in these areas and electricity, water are distributed at cheap rates.

And in order to attract research and development, the governments also introduced research tax credit. These are special business tax credits introduced in the US and this was being done to give a boost to the falling research standards. These research credits were introduced in the Economic Recovery Tax Act in 1981. At present, the research tax credit laws are set to expire on the first of December, 2012. It is estimated that the introduction of these credits has led to an overall increase of four percent in the economy and has greatly encouraged R&D services in the country. It is expected that more R&D reforms will be introduced in the coming years.

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