16 February 2009
one of our client would like to start a branch office of existing business in SEZ. They are ready to make new investment for that ie, plant and machinery entirly new. I need to know whether they can tranfer employees and clients from old company(which is not in SEZ) to newly established branch in SEZ. Please reply soon..............
21 February 2010
SEZ act or SEZ Rules makes it very clear that , existing unit can open Branch in SEZ with fresh investment.
The SEZ Rules , 2006 states in Sec.19(7) as follows.
" If an enterprise is operating both as a Domestic Tariff Area unit as well as a Special Economic Zone Unit, it shall have two distinct identities with separate books of accounts, but it shall not be necessary for the Special Economic Zone unit to be a separate legal entity:"
So , the SEZ act or rules is favarable in your case.
The things to be verified is that , are employees are ready to get transfer ? Check up with HR speciallist what will happen to the employee scheme like PF , PPF and others.
Prima Faci to be safe you can transfer the employees gradually .
About Clients , you can have fresh agreements with clients on SEZ Name.
( visit our website www.sez-india.net for more info on SEZ's )
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