FAQs

Starting Your Business

In what ways foreign investment can enter India and a foreign company invest in Indian company?

A foreign company can commence operations in India by incorporating a company under the Companies Act as a subsidiary (including a wholly owned subsidiary) or as a joint company.

Two routes of FDI: The automatic route (no prior approval is required) and the approval route.

For more information on the FDI policy visit: link 1 and link 2

Foreign Institutional Investors (FIIs), Non-Resident Indians (NRIs), and Persons of Indian Origin (PIOs) can invest in the primary and secondary capital markets in India through the portfolio investment scheme (PIS). Under this scheme, FIIs/NRIs can acquire shares/debentures of Indian companies through the stock exchanges in India. For more information on investment in Indian Companies by FIIs/NRIs/PIOs visit:

Click Here

Standard Operating Procedure detailing the online application procedure, authority issuing approvals, timelines, documents required for FDI.

Click Here

What are the different types of company structures and its Pros and Cons?

The Ministry of Corporate Affairs defines the different company structures based on its size/ number of members/ basis of control or liability/ ownership/ access to capital.

For more information check: Click Here

Considering the nature of investment, investment strategy most widely preferred route for investors is private limited company.

There are few differences between Private Ltd company and LLP viz, during the registration process a Pvt. Ltd will propose Directors while an LLP shall propose Partners. LLP incorporation fee, checklists of documents required are relatively lesser than Pvt Ltd company.

Further, limited liability companies enjoy the liability protections of a corporation as well as structural and tax advantages of a partnership. Significant difference between LLCs and LLPs is that LLPs must have at least one managing partner who bears liability for the partnership’s actions.

Some pros and cons for each type of company structure are presented below:

Partnership regulated under The Indian Partnership Act, 1932

A partnership is formed when two or more people start a business with a goal of making a profit.

Pros:

Easy to establish
Partnerships are ‘pass through’ entities, as in each partner individually pays taxes on their share of distributions

Cons:

Each partner is liable for the debts and obligations of the business
Profits must be shared
Personal disagreements can occur
General partnerships have limited ability to raise capital

Limited Liability Company (LLC) regulated under The Limited Liability Partnership Act, 2008

Pros:

Limited liability for partners
No double taxation - earnings and losses pass on to the owners
No limit on number of shareholders
Any member or owner can be involved with the operations of the LLC (unlike a Limited Partnership)
Fewer filing and administrative requirements than a corporation

Cons:

LLCs have numerous regulatory and filing requirements than a sole proprietorship or partnership

Corporation regulate under The Companies Act

Pros:

Liability protection for owners of the corporation
Personal assets of owners are not at risk to creditors
A corporation can retain profits without the owners paying tax
A corporation has higher capability to raise capital and offer different levels of stock

Cons:

Federal, state, and many local agencies monitor corporations and often have different regulatory requirements, ultimately increasing compliance costs.
Corporations often have higher overall tax rates
Shareholder dividends are not tax deductible for the corporation
Income is taxed twice - at the corporate tax rate and again at the individualincome tax rate

Which is the official site for information on company registration?

The Ministry of Corporate Affairs website should be accessed for any details regarding company registration

For more information visit: Click Here

Which is the official site in India for accessing company register information?

The Ministry of Corporate Affairs regulates corporate affairs through the Companies Act, 1956, 2013 and other allied Acts, Bills and Rules.

For more information visit:Click Here

Company name availability can be checked here: Click Here

What are the various requirements of the board of directors of Private limited company?

The Ministry of Corporate affairs defines minimum and maximum number of directors and their age limits, manner of appointment, removal and resignation, mode of appointment, remuneration etc.

For detailed information check: Click Here

Will government issue certification/ license once company is registered?

Once incorporation is complete a softcopy of the certificate is sent to the company, however, on request a hardcopy is issued by the Ministry of Corporate Affairs for a nominal fee. Click Here

Investing in Your Company

What are the Capital instruments permitted for receiving foreign investment in an Indian company?

Capital Instruments’ are equity shares, debentures, preference shares and share warrants issued by the Indian company.

Non-convertible/ optionally convertible/ partially convertible preference shares issued as on and up to April 30, 2007 and optionally convertible/ partially convertible debentures issued up to June 7, 2007 till their original maturity are reckoned to be FDI compliant capital instruments. Non-convertible/ optionally convertible/ partially convertible preference shares issued after April 30, 2007 and optionally convertible/ partially convertible debentures issued after June 7, 2007 shall be treated as debt and shall require conforming to External Commercial Borrowings guidelines regulated under Foreign Exchange Management (Borrowing and Lending in Foreign Exchange Regulations), 2000, as amended from time to time.

For more details visit :Click Here

Are the investments and profits earned in India repatriable?

All foreign investments are repatriable (net of applicable taxes) except in cases where the investment is made or held on non-repatriation basis.

Investment in sector like defence wherein the foreign investment may be subject to a lock-in period. Dividends (net of applicable taxes) declared on foreign investments can be remitted freely through an authorized dealer bank.

Optionality clauses are allowed in equity shares, fully, compulsorily and mandatorily convertible debentures and fully, compulsorily and mandatorily convertible preference shares under FDI scheme, subject to the following conditions:

There is a minimum lock-in period of one year which shall be effective from the date of allotment of such capital instruments.

After the lock-in period and subject to FDI Policy provisions, if any, the non-resident investor exercising option/right shall be eligible to exit without any assured return, as per pricing/valuation guidelines issued by RBI from time to time.

Remittance is allowed on sales proceeds and transfer of shares/capital instruments is also possible as means of terminating the investment.

For more details visit : link 1 and link 2

The Finance Bill 2020 has proposed to abolish Dividend Distribution Tax. Click Here

Land Availability & Costs

Where can an industry be set-up in Tamil Nadu?

GIS Map showcasing land banks availabilities Click Here

Land bank details Click Here

Criteria for land allotment Click Here

What is the cost of industrial land in Tamil Nadu and its connectivity? Availability of incentives?

SIPCOT industrial estates have a well-established ecosystem and industrial infrastructure.

SIPCOT land bank details are available here: Click Here

All SIPCOT industrial parks, provide investors with following incentives - 50% exemption of stamp duty. Additional 50% capital subsidy ranging from $22-160k.

For more details visit : Click Here

Land acquisition process and requirement.

State Industries Promotion Corporation of Tamil Nadu: Identifies, develops and maintains industrial areas

For detailed information check:

Criteria for land allocation: Click Here

Small Industries Development Corporation: Develops industrial estates with infrastructure facilities, provision of work sheds developed plots

For detailed information check: Click Here

Can Private limited company acquire land, real estate (not right of use)? Any limitation?

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 and The Tamil Nadu Acquisition of Land for Industrial Purpose Act, 1997 guide and governs land acquisition.

In the case of land acquisition for private companies, the prior consent of at least eighty percent, of the affected families must be obtained.

The provisions relating to rehabilitation and resettlement under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 shall apply in cases (a) a private company purchases land, equal to or prescribed by the appropriate Government, through private negotiations with the owner of the land; (b) a private company requests the appropriate Government for acquisition of a part of an area so prescribed for a public purpose: Provided that a private company requests the appropriate Government for partial acquisition of land for public purpose, then, the rehabilitation and resettlement entitlements under the Second Schedule shall be applicable for the entire area which includes the land purchased by the private company and acquired by the Government for the project as a whole.

Can land be purchased from SIPCOT on free-hold basis?

No, land cannot be acquired on free-hold basis from SIPCOT.

What is the minimum lease period? Can the land be leased for a shorter period?

The current minimum lease period is 99 years.

Is transfer of lease hold rights an option? When does the need to transfer arises?

Yes, lease hold rights can be transferred if there is a change in the share holding pattern where more than 50% of the share holding is transferred to new persons resulting in total/ substantial change in ownership in the existing allottee unit or transfer to a unit where original promoters of the existing allottee hold less than 50% shares in the new transferee unit.

For more details visit : Click Here

Is plug and play facility available in SIPCOT/ elsewhere in the state?

Land has been allotted for creating plug play facility with regard to manufacturing activities including support infrastructure.

For more details visit :Click Here

TIDEL Park offers a plug and play environment. Click Here

For more details visit : Click Here

Mahindra World City also provides plug play facility Click Here

Will Soil Testing report and contour map be provided for the land parcel?

Soil testing report is provided on request and contour map is available for the entire estate, not plot wise.

Will TWAD/SIPCOT/CMWSSB provide water for both industrial as well as domestic use?

Yes, TWAD/SIPCOT/CMWSSB provides both industrial and domestic water supply.

Is it possible to re-route the water channel/water body in the industrial land? If yes, what is the procedure?

Yes, water channel/ body can be re-routed within the SIPCOT estate. The investor must represent its case to SIPCOT or PWD post which inspection will take place and cost implications will be borne by the investors.

Labour Regulations

What is the pre-tax salary of employees?

Since labouris a concurrent subject in the Indian Constitution, minimum wage rates are determined both by the Central and State Government. Minimum wage rates in India depends on national, state, sectoral and skill/occupational levels. Also, minimum wage is established for trainees, youth and piece-rate workers. Minimum wage is determined by considering the cost of living.

The minimum wage is mandated as per the Minimum Wages Act, 1948 Click Here

What is the pre-tax wage of unskilled workers?

This is left to the discretion of the employer. The minimum wage is mandated as per the Minimum Wages Act, 1948 and the Tamil Nadu Shops and Establishments Act, 1947. Click Here

For more details visit : Click Here

For rates of daily wage payable within the Chennai district please check: Click Here

How long are the working hours? Are there any restrictions on overtime?

As per The Factories Act, no adult worker shall be required or allowed to work in a factory for more than forty-eight hours in any week. With reference to overtime work, the worker is entitled to wages at the rate of twice his/her ordinary rate of wages. Click Here

For more details visit : Click Here

The Tamil Nadu Chapter III of the Shops and Establishment Act defines the daily and weekly working hours. Details in Click Here

Are there any social insurances that we need to pay for our employees, if yes, what are the specific categories? What is the payment ratio?

The employer shall contribute towards the Employees State Insurance Corporation for all employees earning Rs. 21,000 or less per month as wages. The rates are revised from time to time. Currently, the employee's contribution rate (w.e.f. 01.07.2019) is 0.75% of the wages and that of employer's is 3.25% of the wages paid/payable in respect of the employees in every wage period. Employees in receipt of a daily average wage upto Rs.137/- (~US$ 2.0) are exempted from payment of contribution. Employers will however contribute their own share in respect of these employees.Click Here

The employer shall contribute towards the employee provident fund (EPF), employees deposit linked insurance scheme (EDLI) and employee pension scheme (EPS). Details for this are available on the following link. Click Here

What are the other welfare provisions for employees?

Companies may choose to offer benefits and perks as they deem fit. This is not mandatory. Many companies in India structure their employee pay packages with medical insurance, leave travel allowance etc., as it is exempted up to a limit under income tax for salaried individuals. As per the Tamil Nadu Industrial Policy 2014, flexibility in employment conditions including flexible working hours for women and shorter and longer duration of working hours, 24x7 operations (3 shifts), employment of women in the night shifts and flexibility in hiring contract labour will be permitted. Some other Acts that guide and safeguards the interest of employees are: The Equal Remuneration Act, 1976, The Maternity Benefit Act, 1961, The Payment of Gratuity Act, 1972, The Industrial Employment (Standing Orders) Act, 1946, The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, The Contract Labour (Regulation and Abolition) Act, 1970, The Payment of Bonus Act, 1965, The Tamil Nadu Payment of Subsistence Allowance Act, 1981, The Minimum Wages Act, 1948 Click Here

TN Labour Welfare Board details out certain benefits for industrial workers. Click Here

How do Indian factories generally arrange accommodation for employees? Are there any special rules in Tamil Nadu?

Companies may choose to offer accommodation facilities however, it is not mandatory. Many companies in India structure their employee pay packages with a house rent allowance as it is exempted up to a limit under income tax for salaried individuals.

What is the minimum wage and personnel expense?

The minimum wage is mandated as per the Minimum Wages Act, 1948 (Both for salaried employees and daily wage labourers) Click Here

Consumer price index captures the cost of living. Click Here

What is the salary and overtime hourly rate?

As per The Factories Act, no adult worker shall work in a factory for more than forty-eight hours in a week. Where a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, the worker is entitled to wages at the rate of twice his/her ordinary rate of wages.Click Here

The Tamil Nadu Chapter III of the Shops and Establishment Act defines the daily and weekly working hours.Click Here

What is the policy for annual paid leave?

Section 79 of The Factories Act, 1948 states that every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed leave with wages during the subsequent calendar year. Click Here

What is the policy for pension and its related regulation?

Government of India has introduced a pension scheme for unorganised workers calledPradhan Mantri Shram Yogi Maan-dhan (PM-SYM)to ensure old age protection. Each subscriber shall receive minimum assured pension of Rs 3000/- per month after attaining the age of 60 years. During the receipt of pension, if the subscriber dies, the spouse of the beneficiary shall be entitled to receive 50% of the pension received by the beneficiary as family pension which is applicable only to spouse. For more details Click Here

Laws and Rules Governing Employee Benefits and Labour Welfare Measures and Social Securities Benefits Click Here

Can labor union be established in SEZ, or is it forbidden? Procedure and mechanism for resolving disputes..

Labour laws are applicable in SEZs, therefore trade unions can be formed within SEZs as well. Click Here

For more details visit : link 1 and link 2

Alternate Dispute Resolution in India consist of the following types - arbitration, conciliation, negotiation and mediation.

Mediation is a voluntary process where the disputing people decide to mutually find a solution to their legal problem by entering into a written contract and appointing a mediator. The decision-making powers remain with the disputing parties with the mediator acting as a buffer to bring them to an understanding.

To adopt arbitration as a dispute resolution mechanism an agreement to that effect is signed between the disputing parties. The parties can either opt for a separate arbitration agreement to be signed between them or include an arbitration clause in the main contract between the parties.

The Arbitration and Conciliation (Amendment) Act, 2015 governs and regulates dispute resolution in the country.Click Here

Legal age of workforce?

The Child Labour (Prohibition and Regulation) Act, 1986 defines the permittable work-age as 14/ 15 years depending on the nature of commercial undertakings Click Here

Chapter IV of the TN Shops and Establishments Act Click Here

TN Catering Establishments Act prohibits employment of children below the age of 14-16 Click Here

Chapter 25 of the Tamil Nadu Handloom Workers (Conditions of Employment and Miscellaneous Provisions) Act, 1981Click Here

Chapter 18 of the Tamil Nadu Manual Workers ActClick Here

Procedure to terminate an employee in India.

This is based on labor contract signed between the employee and the employer. However, labor laws supersede the provisions of labor contracts. In absence of a contract, State law has to be followed.

Tamil Nadu Shops and Establishments Act, 1947, an employer cannot terminate an employee that has been with the enterprise for more than six months, except for a 'reasonable cause'. In addition, an employer must provide 1 month notice. If misconduct is the cause for termination, no notice or associated payoff is required.

Procedure for employing women between 7pm to 6am.

Employment of women at night invites certain regulations, few are listed below:

Duty of the occupier of t factory to ensure safety for the women workers
Maintaining of a complaint mechanism
There should be proper lighting in and around the factory
Not less than ten and not less than two third of the total strength of workers should be women at night shift
Safe transport should be provided

For detailed guidelines for employment of women in night shifts check: Click Here

Employment of specially-abled individual.

Persons with Disability Act 1995 Chapter VI Employment defines the Government initiative on employing differently abled individuals.Click Here

The appropriate Governments and the local authorities shall, within the limits of their economic capacity and development, provide incentives to employers both in public and private sectors to ensure that at least five per cent. of their work force is composed of persons with disabilities.Click Here

What are the daily working hours of factory workers?

Section 54 in Chapter VI of the Factories Act, 1948 states that no adult worker shall be required or allowed to work in a factory for more than nine hours in any day Click Here

What is the spread over for factory workers? Is there any exception?

Section 56 of the Act stipulates that the period of work of an adult worker in a factory shall be so arranged that, inclusive of his intervals for rest under Section 55, it shall not spread over more than ten and half hours on any day. The Chief Inspector, may, however, increase the spread over upto twelve hours on specific grounds. Click Here

What is the contribution percentage towards Employees State Insurance?

The rate of contribution under the ESI Act is 4% (employers contribution is 3.25% and employees contribution is 0.75%)Click Here

What is the employer, employee contribution under the Employees Provident Fund & Miscellaneous Provisions Act, 1952?

The contribution to be paid by the employer to the Fund shall be [ten per cent] of the basic wages, [dearness allowance and retaining allowance (if any)] for the time being payable to each of the employees [(whether employed by him directly or by or through a contractor)], and the employees contribution shall be equal to the contribution payable by the employer in respect of him and may, [if any employee so desires, be an amount exceeding [ten per cent] of his basic wages, dearness allowance and retaining allowance (if any), subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable. Click Here

What is the rate of minimum and maximum bonus?

A minimum bonus which shall be 8.33% of the salary/ wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether the employer has any allocable surplus in the accounting year or not.

Maximum bonus shall be an amount in proportion to the salary /wage earned by an employee during the accounting year subject to a maximum of twenty percent, of such salary or wage. Click Here

When is gratuity payable?

Section 4 of the Payment of Gratuity Act, 1972 states that Gratuity shall be payable to an employee on the termination of his/ her employment after he/ she has rendered continuous service for not less than five years, - (a) on his superannuation, or (b) on his retirement or resignation, or (c) on his death or disablement due to accident or disease.Click Here

For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned. In the case of a monthly rated employee, the fifteen days wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty-six and multiplying the quotient by fifteen. (3) The amount of gratuity payable to an employee shall not exceed three lakhs and fifty thousand] rupees.

Who is eligible for maternity benefits?

As per the Maternity Benefit Act, 1961 every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day.

Eligible for maternity benefit: A woman should have worked in an establishment of the employer from whom she claims maternity benefit for a period of not less than one hundred and sixty days in the twelve months immediately preceding the date of her expected delivery. Click Here

As per the Maternity Benefit (Amendment) Act, 1961 the maximum period of leave of absence for a woman having two or more than two surviving children shall be twelve weeks of which not more than six weeks shall precede the date of her expected delivery.

For more details visit :Click Here

Under the Employees State Insurance Scheme, who are eligible for medical benefits?

The Employees’ State Insurance Schemeis an integrated measure of Social Insurance embodied in the Employees’ State Insurance Act and it is designed to accomplish the task of protecting ‘employees’ as defined in the Employees’ State Insurance Act, 1948against the impact of incidences of sickness, maternity, disablement and death due to employment injury and to provide medical care to insured persons and their families. The ESI Scheme applies to factories and other establishment’s viz. Road Transport, Hotels, Restaurants, Cinemas, Newspaper, Shops, and Educational/Medical Institutions wherein 10 or more persons are employed.Click Here

Utility Connection & Costs

What is the Cost of utilities (Water, Electricity) in proposed site?

HT supply to industries, registered factories, Textiles, Tea estates, IT services, start up power provided to generators etc., starts from Rs. 356.35 per kVA per month and HT Temporary Supply for construction and other temporary purposes is Rs. 366 per kVA per month.

Electricity Tariff rates: Click Here

Water Tariff for the period from 01.04.2021 to 31.03.2022:

For Rural Local Bodies-Rs. 8.51/1000 Litres

For Urban Local Bodies- Rs. 10.94 /1000 Litres

Water Tariff:Click Here

For more details visit : Click Here

Is electricity/ water supply ensured in uninterrupted manner throughout the year 24 x 7? What are the sources of supply that ensure this?

Tamil Nadu is a power surplus state with 32.3GW of installed capacity. Tamil Nadu has a dedicated Policy for 24x7 power to Industrial Consumers.

For more details visit : Click Here

Water supply sources Construction of 45mld capacity tertiary treatment and reverse osmosis plant at koyambedu.For more information visit: Click Here

Procedure for sewage disposal/ waste treatment

Click Here

Underground sewerage scheme:Click Here

Chennai city underground sewerage scheme:Click Here

Regulation for purchasing/ importing telecom equipment into India.

The Indian Telegraph (Amendment) Rules, 2017, provides that every telecom equipment must undergo mandatory testing and certification prior to sale, import of use in India. Click Here

Tax Regime

Trade/ Tax agreements of India.

India has trade agreements with most countries. India also has Double Taxation Avoidance Agreements with many countries.

DTAA between India and Singapore:Click Here

DTAA between India and Korea:Click Here

DTAA between India and China:Click Here

DTAA between India and Japan:Click Here

DTAA between India and Canada:Click Here

Bilateral Investment Treaties Agreements with 10 different nations Click Here

If the firm in India requires specific capital or machinery, can it be directly purchased from a foreign country, and invested as capital? (Furthermore, will it be the same for raw materials?)

Machinery imported is considered as part of capital investment for calculating ‘eligible investment’ size. Approval may be sought for second-hand machinery to be considered as eligible investment on a case to case basis. Machinery will be considered based on the certification by charted engineer and duties paid. Imported raw materials are not considered to be eligible investment.

Regulations on import of machinery is simple for most sectors, however, sectors like defence are tightly regulated.

Click Here(Annexure B)

For more information on foreign trade policy visit:Click Here

Information on valuation of second hand machinery visit:Click Here

India Trade portal provides detailed information on trade agreements, procedure for export & import, Import Export schemes, identifying of HS Code etc.,Click Here

Tax regime

Goods & Services Tax: Rate schedule for goodsClick Here

Basic Customs Duty: Customs tariff-Click Here

For more details visit : Click Here

Export Duty calculatorClick Here

Export Tariff Click Here

Anti-Dumping Duty: Click Here

For more details visit : Click Here

Internal transfer price compliance rule.

Transfer pricing under Sections 92 to 92F of the Indian Income Tax Act, 1961 (the Act) covers intra-group cross-border transactions. For details on transactions check:Click Here

Rate of VAT

For details on VAT applicability and rate check:Click Here

For more details visit : Click Here

Details on GST:Click Here

Is Tax applicable for foreign individuals?

Foreign nationals residing in India with income more than Rs.2.5 lakhs p.a. file income tax return as per the Income Tax Act, 1961.

Liable to pay tax when resides in India:

for a period of 182 days or more
for minimum of 60 days, not more than 182 days, & residing over the previous 4 years prior to the taxation year for a total of 365 days or more Click Here

What is the insurance requirement for foreign employees in India?

Foreign Exchange Management (Insurance) Regulations, 2015 governs General/Health Insurance and Life Insurance in India.Click Here

Incentives

What incentives does the Government offer to foreign investors?

Both the central and state governments offer various schemes and subsidies to firms in certain sectors.

Central Government incentives:

Modified Special Incentive Package Scheme(M-SIPS)- capital subsidy of 20% in SEZ (25% in non-SEZ) for units engaged in electronics manufacturing.Click Here

Corporate Income Tax of 15 % for new manufacturing companies. Any new domestic company incorporated on or after 1st October 2019 making fresh investment in manufacturing shall have an option to pay income-tax at the rate of 15% (effective tax rate of 17.01% inclusive of surcharge & cess) and are not required to pay Minimum Alternate Tax. This makes India more competitive on tax rates as compared to Southeast Asian countries.

State Government incentives:

For the list of all available incentives as per the present GST regime- Click Here

Industrial Policy 2014:

Incentives relating to Power supply: All units with demand of more than 10 MVA will be provided with reliable supply at 110 KV or 230 KV level depending on the eligibility.

Captive power plants will be treated as eligible fixed assets for the purpose of the structured package of assistance..

Refund of 50% of the VAT paid on purchase of capital goods exclusively for captive power generation within the construction period, provided they are manufactured in Tamil Nadu.

Water: Incentives to set up desalination plants/ waste-water treatment and recycling plants

For MSME: Floor Space Index (FSI) incentive of 50% will be given for non-Multi Storyed Building.

Industrial units in existence in the state for over 10 years will be given suitable extra benefits for expansion projects Click Here

Incentives to Micro Small & Medium Enterprises

Subsidy schemes for micro manufacturing enterprises

MSME incentive portal-Click Here

Click Here

For MSME manufacturing units, online application available here: Click Here

Are benefits such as employee training fee compensation, stamp reduction, lower interest rate, etc., available for foreign investor?

The Government will offer training subsidy as an incentive on a case to case basis taking into account the capacity of employment generation and the potential for significant improvement of skills. Click Here

Stamp duty and registration fee: Click Here

Stamp duty exemption on lease or purchase of land meant for industrial use to the extent of 50% would be available for all manufacturing industries setting up new or expansion units with an investment in eligible fixed assets of more than Rs 5 crores in private industrial parks. Click Here

Stamp Duty concession: 50% Exemption from Stamp duty on lease or sale of land meant for industrial use shall be offered for projects located in Industrial parks promoted by SIPCOT in A and B category districts. In the case of Ultra Mega projects, it will be 100%, irrespective of location. Click Here

Skill Availability

Human resources in the State.

Number 1 State in India in case of technical universities, pioneer in promoting technical education
Number 2 State in India in terms of most employable talent, over a million graduates are added to the state’s talent pool every year
1900+ colleges and is home to institutions such as IIT, IIM, Anna University, TNAU, NIT, NIFT and other leading universitiesClick Here

How are the skill set of Tamil Nadu’s workforce? What is the workforce participation rate in the State? Percentage of working population in the State?

Tamil Nadu Skill Development Corporation has been formed to transform the state into a skill hub and thereby enhance their employability and match the expectations of the industry. It provides multitude of schemes for unskilled, semi-skilled workers and upskilling requirements.Click Here

Number 1 State in India in case of technical universities, pioneer in promoting technical education
Number 2 State in India in terms of most employable talent, over a million graduates are added to the state’s talent pool every year
1900+ colleges and is home to institutions such as IIT, IIM, Anna University, TNAU, NIT, NIFT and other leading universities Click Here

In Tamil Nadu a ‘demographic dividend’ is at its peak i.e., higher proportion of 15 to 60 age groups in total population. Click Here

Click Here

Estimation of working age population for Tamil Nadu by 2022 is 5,77,13,558. More details

How are the computer skills in the State?

Availability of high-quality human resource for all focus sectors - mechanical, electrical & electronics, computers and communication, civil, chemical, biotechnology domains.

Tamil Nadu is home to some of the best educational institutes in India viz. I. Indian Institute of Technology II. Chennai, National Institute of Technology III. Trichy, Anna University, IV. VIT University, V. PSG College of Technology etc.

About 553 engineering and technology educational Institutions and 479 Polytechnic Colleges in the State.

Construction Permits

Regulations regarding architecture and fire code.

The Architects Act, 1972 regulates education and practice of profession throughout India as well as maintains the register of architects. Click Here

Tamil Nadu Combined Development and Building Rules, 2019 regulates development and construction in the entire state. This also includes rules and regulations with regard to fire and safety.Click Here

Construction site survey.

Tamil Nadu Combined Development and Building Rules, 2019 states various inspections carried out during construction.Click Here

Dispute Resolution

Indian arbitration law? Are foreign law system’s verdict or foreign countries’ arbitration recognized in India?

Arbitration and Conciliation (Amendment) Act, 2015 provides strict timelines for completion of the arbitral proceedings along with the scope for resolving disputes by a fast track mechanism.Click Here

The 2015 Amendment Act provides for assistance from the Indian courts, even in foreign seated arbitrations, in the form of interim relief before the commencement of the arbitration.

Export/Import Regulations

Exports/ Imports regulations/ Customs duty.

The Indian Customs Electronic Gateway (ICEGATE) is the national portal of Indian Customs of Central Board of Indirect Taxes and Customs (CBIC) that provides e-filing services to the Trade, Cargo Carriers and other Trading Partners electronically Click Here

Customs duty, is governed under the Customs Act, 1962, are evaluated on specific or ad valorem basis and the value of the product is defined by Rule 3(i) of Customs valuation (Determination of value of goods imported by someone) Rules, 2007 Click Here

Provision of calculation of customs duty is available at the icegate portal of the central Government, Custom Duty calculator Click Here

Exemption for Customs duty.

Exemption to goods when imported against an Advance Licence. Click Here

For more details visit : Click Here

Miscellaneous

Data storage regulation in India.

RBI states that all payment systems data to be stored exclusively in India without creating mirror sites overseas. For further details:Click Here

Climatic conditions of Tamil Nadu.

Tamil Nadu is considered as a rain shadow region as it lies on the eastern (leaward) side of western ghats.

Click Here provides data on percentage of rainfall in the State.Click Here

Geological details of the state is available here:Click Here

Availability of minerals in the state: Click Here

How convenient is it for foreign workforce in terms of health care and educational facilities?

About 1800 Single specialty hospitals across various districts in the State and more than 1000 multi-specialty hospitals. The renowned Apollo Hospitals headquarters are based in Chennai.

And on educational front, there are about 80+ International Baccalaureate & Cambridge curriculum schools.

Procedure and requirements for issuance of employment visa.

To obtain an employment visa, the foreign individual should draw a gross salary in excess of Rs. 16.25 lakhs per annum. For details on duration of employment visa, registration requirements / extension of the visa checkClick Here

Tamil Nadu State Population

As per Census 2011 (census is conducted every 10 years), total population of Tamil Nadu is 7,21,38,958 with a decadal population growth of 15.60%.

More details available here:Click Here

State’s Infrastructure: Integrated infrastructure providing impetus to business activities.

4 international and 2 domestic airports in the state
2400 weekly flights to and from Tamil Nadu
540 international flights and 1850 domestic flights weekly
17,000 km of Highways (National and State Highways)
3 major ports in Tamil Nadu
240 MT per annum cargo is handled by Chennai, Kamarajar (Ennore), VOC (Thoothukudi), Kattupalli and Karaikal ports
4 Major Industrial Corridors CKIC, CBIC, KBIC & Defence
39 Industrial Clusters across the state spanning multiple sectors
Power surplus state with 32.3 GW installed power capacity
Highest bandwidth of 14.8 Tbps amongst Indian states

Information on trade fairs and exhibitions.

For more details visit : link 1 and link 2

Where can I get trade statistics?

Directorate General of Commercial Intelligence and Statistics provides all export/ import data.Click Here

Regulation for Environmental Impact Assessment.

The Ministry of Environment, Forest and Climate Change lays down regulations for Category A project (expansion and modernization of existing projects). For further details:

Click Here

Category B requires Clearance at State Environment Impact Assessment Authority Click Here

For more details visit : Click Here

Payment method for various industrial services.

Tamil Nadu Government has made online payment for various services provided through the Singe Window Portal.

General

Is there an entity that an investor can approach for handholding through the investment process?

Yes. In case of Large Enterprises, Guidance, under the Industries Department of the Government of Tamil Nadu is the Nodal Agency. In case of Micro, Small, and Medium Enterprises, the Office of the Regional Joint Director of Industries and Commerce in respect of Chennai district, and the District Industries Centre in respect of other districts is the Nodal Agency

Is Guidance a private entity or government entity?

Guidance is a Government agency under the Industries Department, Government of Tamil Nadu.

What kind of support is provided by Guidance to new investors?

Industry Locational Support
Investment Facilitation
Facilitate in Single Window Clearances during pre-establishment, pre-operation, and post-operation stage of business lifecycle
Sector-Specific Desks such as Automobile, Electronics and Hardware, etc.
Country Desks such as USA, Korea, Japan, etc.
Facilitate in grievance redressal

Do I need to physically visit the respective government offices to follow-up on my application?

No.

Application submission related - Once an investor has logged in the Tamil Nadu Single Window Portal using their registered user ID and password, they can track the status of the application under the tab "Track application" in the Single Window Portal.

What are the various incentives provided by State Government to investors for setting up an enterprise in Tamil Nadu?

The Government of Tamil Nadu offers incentives and subsidies such as Fiscal incentives include Capital Subsidy, Training Subsidy, Electricity duty exemption, Stamp duty exemption, Reimbursement on SGST, Road tax exemptions, etc. The details of sector-wise incentives can be accessed from Click Here

Can Guidance help me in getting approvals from central government departments (DGFT, MSME, Customs and Banks)?

Yes, Guidance supports an investor in investment facilitation for setting up of a business in Tamil Nadu.

Overview of Single Window Portal

What is the objective of the Single Window Portal?

The key objective of the Single Window Portal is to provide Government to Business (G2B) services for new and existing enterprises in a digital manner without any physical touch point with government departments.

What are the main features of the New Single Window Portal?

Apart from New Enterprises, Existing Enterprises can apply for expansion related clearances or renewal of existing clearances.
Additional 150 new G2B services.
Interactive system to identify approvals required for establishing a new business
Easy access to information regarding the clearances i.e. procedure, checklist of documents, fee, and time limit for approval/rejection of application.
Real Time Monitoring of Application Status, and SMS based alerts to the applicant at each stage of application processing to ensure greater transparency

The following features are under development:

Artificial Intelligence based Voice and Chatbot Facility
Virtual meeting with Nodal Agency and Departments to clarify queries regarding application/procedure/ document checklist
Parallel processing of clearances
Deemed approval for select clearances as per Tamil Nadu Business Facilitation Act and Rules, 2017-18

Who can use the Single Window Portal?

Any new or existing investor who wishes to invest in Tamil Nadu can use the Single Window Portal.

How can I avail the services on Single Window Portal?

Follow the below steps to avail the services on Single Window Portal:

FOR NEW USER OF SINGLE WINDOW PORTAL

Investors need to register on the Single Window portal, by clicking on ‘Register Here’ on the right hand side top corner
Fill in the required details in the ‘Investor Registration form’ provided. An email address and a mobile number will be required for the same.
On registration, investor shall receive an E-Mail as well as SMS confirming the registration.
Once registered, investor needs to create a project in the form of a Combined Application Form (CAF). Thereafter, the investor can apply for services of various departments.

FOR EXISTING INVESTOR OF SINGLE WINDOW PORTAL

Investors need to Login on the Single Window portal, by clicking on ‘Login’ on the right hand side top corner
Once logged in, investor may apply for individual services of various departments relevant to the industry or apply for renewals. Thereafter, investors will be able to apply / renew for services of respective departments through the Single Window Portal.

How can I know the approvals required for my industry?

An online wizard has been created under the heading ‘Know your Clearances’ on the home page to help investors determine approvals required for their enterprise. You need to respond to the questions in the online wizard to know about the approvals required for your business.

Registration and Submission of Applications on the Single Window Portal

Am I required to upload any documents while registering on SINGLE WINDOW PORTAL?

No you need not upload any documents while registering on the Single Window Portal

Can I change the details I entered on Single Window Portal post successful registration?

Yes, you may change the details by clicking on the Initiate Support Request Initiate Support Request button on the Home page and by following the next steps, as directed in the page

I forgot my Single Window Portal Login Password. How can I recover it?

On the home page, click on the ‘forgot password’ tab. You will be prompted to answer the security question. On answering the question, kindly follow the next steps, as directed in the page.

Do I need to create Login credentials at Single window portal as well as at the respective department portal?

If you are applying for clearances through the Single Window Portal, you need to create the login credentials only one time on the Single Window Portal and are not required to create login credentials in respective department portal.

Can I use the login credentials created at the Single Window Portal to log on to the respective department portal?

No. You cannot use the login credentials created for the Single Window Portal on other department portals.

I have registered on both a particular department’s portal and the Single Window Portal as well. Will this create problems in obtaining clearances?

To avoid duplication of application, it is suggested to apply for the service/ clearance only on any one of the portals.

Can I apply for approvals, incentives etc. required in different / multiple units of through a single user ID?

Yes, you can apply using the same registered investor user id and credentials.

My business details have changed. How can I modify the CAF previously submitted on Single Window Portal?

CAF details submitted on Single Window Portal cannot be changed. However, applicants may fill a new CAF.

Is there a checklist of documents available for every type of clearance / service?

Yes, the checklist of documents can be viewed for every type of clearance / service. On the Single Window Portal home page, click on the Clearance tab and choose List of clearances section. On accessing the List of Clearances section, click on the Procedure button to access the checklist of documents for the respective clearances.

In which file format can I submit the required documents and is there a file size limit?

You can submit the documents only in the following formats which include .JPG, .JPEG, .BMP, .GIF, .PNG, .TIF, .PPM, .DOC, .DOCX, .PDF, .RTF, .XLS, .XLSX, .PPT, .PPTX and .PPSX

Do I need to pay any fee for registering with Single Window Portal?

There is no fee for registration on the single window portal.

Do I need to pay any fee to the Nodal Agency for the services provided through Single Window Portal?

If your enterprise comes under the MSME category, there is no fee levied for the single window services. However, if your enterprise comes under Large Enterprise category, Guidance levies fee for the single window services.

How can I make payments on Single Window Portal? What are the available modes of payment?

Upon completion of the required details in the application form, the user will be redirected to the payment gateway where multiple online payment modes are available including Net Banking, Debit/Credit Card Payment.

I am a renewable energy company, wishing to set up a wind farm across scattered locations, spanning 2-3 districts. Do I need to pay multiple Single Window Portal fees?

Yes. The Single Window Portal fees is calculated based on Investment (including Eligible Fixed Assets) value of each project and location of the project. For further information, please contact the Guidance helpdesk.

On successful processing of my application, will I receive any notification/alert confirming the same?

Yes, on successful submission of the application for each clearance, the applicant will receive notifications via SMS and email on their registered mobile number and email address respectively.

Are there any timelines defined for obtaining clearances from respective departments?

Yes, the timelines have been defined for each clearance. On the Single Window Portal home page, click on the Clearance tab and choose List of clearances section. On accessing the List of Clearances section, the timelines are published under the tab Processing days

How can I track my application?

The applicant can track the status of each application by clicking on the available options in the ‘Track Applications’ tab on the Single Window Portal home page.

Do I need to submit the hard copies of supporting documentation to Guidance or respective departments?

No. The applicant is not required to submit hard copies of documents to Guidance or to the concerned authorities. However, the applicant shall be required to produce the original hard copies of the document for verification during inspection/ site visit (if required under respective department’s legislation).

What is a deemed approval? Is it applicable to all clearances?

As per the TN Business Facilitation Act 2018, ‘Deemed Approval’ means a clearance deemed to have been given by the Competent Authority on the expiry of time limit for providing such clearance in the absence of sufficient and reasonable cause for not clearing the application within the time limit. The deemed approval shall be issued by the Nodal Agency through the single window portal after obtaining concurrence of the Respective Committee under this Act.

There is provision for issue of Deemed Approval by the Nodal Agencyfor following 7 Pre-establishment clearances:

Planning Permission
Building Permit
Factory Plan Approval
Fire Safety NOC
Statutory Approval from Tamil Nadu Electrical Inspectorate
Registration of Establishments for employing Building and Other Construction Workers
Permission for development of land located in non-planned areas, and prior report from Agriculture Department in case of Dry Land, or Concurrence from District Collector in case of Wet Land.

Is there a provision to download the license / NoC / certificate copy on Single Window Portal?

Yes, on successful processing of the application/ clearance by the concerned authority, the applicant can download the license/ NOC/ certificate from the Single Window Portal. The applicant can view and download the document from the applicant dashboard section, by clicking on the approved options in the tab on the Single Window Portal home page.

Grievances and Query Management

I have a general query or a query regarding single window system. Where can I raise it?

Applicants can submit general queries and single window related technical queries/ issues, after registration on single window portal. Post registration, in the applicant dashboard, an Initiate support request button is available. On clicking the same, applicant can raise a query, describe the issue faced, attach relevant document and submit. The query shall be routed to concerned authority for clarifications.

How can I report a grievance?

Grievances related to clearances can be raised on the Biz buddy portal Click Here

How can I track the status of my reported grievance?

Grievances may be tracked on the Biz Buddy portal.

In case of no response from department or a delay in the application processing, whom should I contact?

In case of delay in the application processing or non-responsiveness of department, Large Enterprises can contact the Guidance Helpdesk, and MSMEs can contact the concerned District Industries Centre.