Last updated: December 17th, 2019 3:47 PM

How to Start an SEZ?

Any individual, partnership firm, company or co-operative society can apply for setting up of Special Economic Zone. Special Economic Zone can be established jointly or severally by Central Government, State Government or any person for manufacture of goods or for rendering of services or for both or as a Free Trade and Warehousing Zone. Procedure for setting up of Special Economic Zone (SEZ) are provided under section 3 of the Special Economic Zone Act, 2005.

Procedure for Obtaining SEZ Approval

Following is the procedure to be followed for setting up of SEZ in India:

1. Any person willing to set up a Special Economic Zone has to make a proposal to the State Government. The application for proposal for setting up of Special Economic Zone is to be made in form A. The proposal can be made only after identifying the area for setting up of SEZ. Proposal for setting up of SEZ can even directly be made before the Board.
2. In case, proposal is directly made against Board, the person, after getting approval from the Board, is required to obtain the concurrence of the State Government.
3. On receipt of the proposal, the State Government needs to forward the same to the Board along with its recommendation.
4. The Central Government has right to prescribe various requirement for setting up of Special Economic Zone. Minimum area of land required for setting up of business, terms and conditions for various authorized operations are some of the examples of various requirements which can be prescribed by Central Government.
5. Currently the minimum area requirement for setting up of Special Economic Zone is as under:

   Particulars	Area Requirement
   Multi sector SEZ	1000 hectares
   Sector Specific SEZ	100 hectares
   FTWZ	40 hectares
   IT/ITES/handicrafts SEZ Bio-technology/ non-conventional energy/gems and jewellery Sector	10 hectares

6. 6. The Board, on receipt of proposal, may either approve the proposal subject to such terms and conditions as it may deem fit or may even modify or reject the proposal.
7. Final Action of Board on receipt of proposal:
   1. When Board approves the proposal without any modification:
      1. In such case, the Board is required to communicate the approval to the Central Government.
   2. When Board approves the proposal with modification:
      1. In such case, the Board is required to communicate the modification to the person or the State Government of the concerned person. Further, if the modification as proposed by the Board is accepted by the person or the State Government, the Board is required to communicate the same to the Central Government.
   3. When Board rejects the proposal –
      1. In such case, the Board is required to record the reason for rejection and communicate the same to Central Government. The Central Government in turn would intimate the same to the person or the State Government.
8. If everything goes well, the Central Government on receipt of communication would issue a letter of approval on such terms and conditions and obligations and entitlements as may be approved by the Board, to the Developer, being the person or the State Government concerned.

Documents Required

Proposal for setting up of Special Economic Zone is to be made in form A along with required undertaking and affidavit. Project report is also required to be submitted.

• Name of the Applicant.
• Proposed Area of Special Economic Zone.
• Status of recommendation of proposal by the State Government, if available.
• Whether proposal is for formal approval or in-principle approval?
• Whether it is multi-product SEZ?
• Whether it is sector specific SEZ? If yes, the details of sector thereon.
• Projected investment in project.
• Projected export from the project.
• Projected employment generation from the project.
• Source of fund of project.
• Net worth of the Applicant.
• Extent of FDI, if any.
• Source of FDI.

Form A - SEZ Application

[pdf-embedder url="https://www.indiafilings.com/learn/wp-content/uploads/2018/07/Form-A-SEZ-Application.pdf" title="Form A – SEZ Application"]