SEZ

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CA skmnair (Querist)
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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..............

Swanand

Swanand (Expert)
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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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