Quick Summary
Special Economic Zones are duty-free enclaves treated as foreign territory for trade operations. They offer tax holidays, single-window clearance, and world-class infrastructure.
Special Economic Zones (SEZ) are specially designated duty-free enclaves with flexible labor regulations and tax incentives to boost exports and attract foreign investment.
Types of SEZs
- Multi-product SEZ (minimum 1,000 hectares)
- Sector-specific SEZ (minimum 100 hectares)
- Port-based SEZ
- Airport-based SEZ
- IT/ITES SEZ
Benefits
- 100% Income Tax exemption on export income for first 5 years
- 50% exemption for next 5 years
- 50% exemption on reinvested profits for next 5 years
- Duty-free import of capital goods
- Simplified customs procedures
- Single window clearance
Requirements
- Net Foreign Exchange (NFE) must be positive
- Domestic Tariff Area (DTA) sales limited to 30%
- Must achieve positive NFE within 5 years
Key Points
- Export-oriented duty-free zones
- 100% tax holiday for 5 years
- Single window clearance
- Flexible labor laws
- Must maintain positive foreign exchange
- World-class infrastructure