In an article based on an analysis of scientific publications and the provisions of the Ukrainian legislation, examines issues related to determining the place and role of institutions of local government in the mechanism of establishment and functioning of special (free) economic zones in Ukraine. Isolated and given a description of the major powers of institutions of local government in this field. The necessity of strengthening the influence of institutions of local government in the process of establishment a special (free) economic zones in certain areas, which aims to help increase the volume of investment, economic development in individual regions and to protect the interests of territorial community.