Free Zones in India (SEZs) in 2023

Since 2003, Healy Consultants has been assisting our multinational Clients set up companies in India. An increasingly attractive option for foreign investors is the India Special Economic Zone (SEZ) company. There are currently 238 SEZs across India in 15 states.

• Advantages of setting up an India SEZ company

  1. 100% tax deduction on export profits for the first five years, 50% tax deduction for the next 10 years and a 50% tax deduction on re-invested export profit for the following five years;
  2. Exemption from i) minimum alternative tax ii) central sales tax (CST) iii) services tax (ST) and iv) dividend distribution income;
  3. Duty exemption for goods imported for development, operation and maintenance of the SEZs;
  4. Miscellaneous incentives, including exemption from custom duties, excise duties and value added tax (VAT), depending on the state in which the SEZ is located;
  5. Up to US$500 million annually can be borrowed without any restriction on maturity date through recognised financial institutions;
  6. Pro-business infrastructure, including simpler licensing and regulatory procedures.

• Best uses of an India SEZ company

  1. Many foreign investors set up an India SEZ to conduct export activities;
  2. The India SEZ company is ideal for companies importing raw materials, due to favourable import duties;/li>
  3. Information Technology (IT) firms;
  4. The states of Tamil Nadu, Gujarat and Maharashtra are popular locations to set up an India SEZ company. Visit this page to view a comparison of the best Indian states in which to do business.

• Comparison of major states operating SEZs in India

  Summary at a Glance	Tamilnadu	Gujarat	Maharashtra
  Number of SEZs?	36	20	26
  FTZs used mostly by which industry?	IT/ITES	Multi-product, IT/ITES	IT/ITES
  Average annual Industrial space rent / 1000 sq. m.	US$10,000	US$10,000	US$18,000
  How long to set the company up?	3 months	2 months	3 months
  How long to open company bank account?	4 weeks	4 weeks	4 weeks
  Quality of Utilities	Good	Good	Satisfactory
  Can sign sales contracts with Indian Clients?	Yes	Yes	Yes
  Allowed to invoice India Clients?	Yes	Yes	Yes
  Corporate tax payable in India on export revenue?	0%	0%	0%
  Corporate bank account	SBI	HSBC	Citibank
  Physical office space required?	Yes	Yes	Yes
  Industrial space availability	Many	Many	Many
  Allowed to import raw materials?	Yes	Yes	Yes
  Allowed to export goods?	Yes	Yes	Yes
  Wholly foreign owned?	Yes	Yes	Yes
  Can the entity hire expatriate staff in India?	Yes	Yes	Yes
  Minimum number of directors	2	2	2
  Minimum number of shareholders	1	1	1
  Individual shareholders allowed?	Yes	Yes	Yes
  Corporate shareholders allowed?	Yes	Yes	Yes
  Corporate director(s) allowed?	No	No	No
  Public register of shareholders and directors	Yes	Yes	Yes
  LLC company allowed?	Yes	Yes	Yes
  Can apply for immigration visas?	Yes	Yes	Yes
  Annual audited financial statements to be submitted?	Yes	Yes	Yes