A delimited geographical area or an export-oriented manufacturing or service enterprise located in any part of a country, which benefits from special investment-promotion incentives, including exemptions from customs duties and preferential treatment with respect to various fiscal and financial regulations.
The basic idea is that a developing country creates a policy which is attractive for foreign investors with a lot of money. The companies in an EPZ are often given exemptions from the labour laws that govern the rest of the country, which obviously causes much poorer working conditions in an EPZ. Sometimes the EPZ is an area segregated from the rest of the country, like in the Dominican Republic, and some countries have no actual boundaries; instead the whole country operates under these reduced regulations.
EPZs are essential to the forming of a global economy, but also bring about never before seen levels of social inequality.