India free zones

India free zones

India currently operates around 202 special economic zones (SEZs), which are located in 15 states. The states of Tamilnadu, Telengana and Karnataka operate the most number of SEZs in India. These zones offer certain benefits including:
business registration in India's free zone

  • 100% tax deduction on export profits for the first 5 years, 50% tax deduction for the next 10 years and 50% tax deduction on re-invested export profit for next 5 years;
  • Exemption from i) minimum alternative tax (MAT) ii) central sales tax (CST) iii) services tax (ST) and iv) dividend distribution income (DDT);
  • Duty exemption for goods imported for development, operation and maintenance of the SEZs;
  • Miscellaneous incentives including exemption from custom duties, excise duties and VAT may also be available, depending on the state in which the SEZ is located;
  • Up to US$500 million annually can be borrowed without any restriction on maturity date through recognized financial institutions.
Summary at a GlanceTamilnaduTelenganaKarnataka
Number of Free Trade Zones available362626
FTZs used mostly by which industry?IT/ITESIT/ITESIT/ITES
Average annual Industrial space rent per 1000 sq. m.US$10,000US$12,000US$18,000
How long to set the company up?4 months5 months5 months
How long to open company bank account?5 weeks5 weeks5 weeks
Quality of UtilitiesGoodGoodSatisfactory
Allowed to sign sales contracts with Indian Clients?YesYesYes
Allowed to invoice Indian Clients?YesYesYes
Corporate tax payable in India on export revenue?0%0%0%
Corporate bank accountSBIHSBCCitibank
Physical office space required?YesYesYes
Industrial space availabilityManyManyMany
Allowed to import raw materials?YesYesYes
Allowed to export goods?YesYesYes
Wholly foreign owned?YesYesYes
Can the entity hire expatriate staff in India?YesYesYes
Minimum number of directors222
Minimum number of shareholders222
Individual shareholders allowed?YesYesYes
Corporate shareholders allowed?YesYesYes
Corporate director(s) allowed?NoNoNo
Public register of shareholders and directorsYesYesYes
LLC company allowed?YesYesYes
Can apply for immigration visas?YesYesYes
Annual audited financial statements to be submitted?YesYesYes

Frequently asked questions

Contact us

For additional information on our free zone company registration services in India, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Kunal Fabiani, directly:
client relationship officer - Kunal