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Setting
up I.T. software and services operations in India by
an Overseas Company
No
prior permission of the government of india is required
to set up i.t./software units in india. moreover, to
encourage units in this sector, the government of india
has announced many schemes.
Domestic
Tariff Area (DTA): The main focus here is to sell
in the domestic market in India. The unit can be set
up anywhere in India. All normal laws of India apply.
No concession is available on import duties. Exports
are permitted.
Export
Processing Zones (EPZ): These zones are located
at various places including Cochin, Falta (near Calcutta),
Kandla, Chennai, Noida, Santa Cruz (Mumbai), Vishakhapatnam
and Surat. A unit can be set up in these zones subject
to the availability of space. No import duty, special
10-year’s income tax holiday are some of the incentives
provided. There is no restriction on the quantity of
domestic sales.
100%
Export Oriented Unit (EOU): Similar to EPZ scheme,
except that there is no need to be physically located
at an EPZ.
Software
Technology Park (STP): A special scheme under the
aegis of the Ministry of Information Technology. STPs
are located at Noida, Navi Mumbai, Pune, Gandhinagar,
Hyderabad, Bangalore, Chennai, Bhubaneshwar, Jaipur,
Mohali, Thiruvanathapuram. This scheme offers incentives
such as zero import duty on the import of all capital
goods, a special 10 years income tax holiday, availability
of infrastructural facilities like high speed data communication
links, etc.
Special
Economic Zones (SEZ): With a view to enabling hassle
free manufacturing and trading activity for the purpose
of exports, SEZ are being set up. The units in these
zones shall not be subjected to any pre-determined value
addition, export obligation, input output/wastage norms.
They shall be treated as being outside the Customs territory
of the country. Sale in DTA by the units in these zones
will be permitted only on payment of full customs duty.
Initially two SEZ would be set up in the States of Gujarat
and Tamilnadu. The existing Export Processing Zones
may also be converted into SEZ by the Ministry of Commerce
& Industry through issue of a notification.
Kandla,
Santa Cruz(Mumbai) , Kochi & Surat EPZs have been
converted to SEZ from NOV 1, 2000. Approval has also
been given by the Govt for setting up SEZ at Nanguneri
(Tamil Naidu) , Positra (Gujrat) , Kulpi(West Bangol),
Paradeep(Orissa), Bhadohi (Utter Pradesh), Kakinada
(Andhra Pradesh), and Dronagiri (Maharashtra)
Overseas
Company
A
foreign company is one, which has been incorporated
outside India and conducts business in India. These
companies are required to comply with the provisions
of the Companies Act, 1956.
A
foreign company planning to set up business operations
in India can do so as under:
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As
a foreign company through a Liaison Office/Representative
Office, Project Office or a Branch Office. The opening
and operation of such offices is regulated by the
Foreign Exchange Management Act (FEMA). An approval
of the Reserve Bank of India (RBI) is required for
the opening of such offices.
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As
an Indian company through a Joint Venture or a Wholly
Owned Subsidiary. Incorporation of Companies is
controlled by the Registrars of Companies in various
states in India.
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