The Hindu Business Line : Foreign cos can set up shop in special economic zones

A FOREIGN company can now set up a branch in any of the special economic zones (SEZ) of the country to undertake manufacturing or trading activities. Branches of foreign companies were hitherto permitted to only undertake liaison activities in the country (including the SEZs).

The Finance Ministry has taken this decision close on the heels of the announcement of an "exporter-friendly" Exim Policy on Monday, which contained a package of measures for promotion of SEZs in the country.

"We have now got formal communiqué from the Finance Ministry on Monday to the effect that a foreign company can set up a branch office in a SEZ and undertake trading or manufacturing activities. This decision is an important one as there is no compulsion for a foreign company to incorporate a subsidiary in the SEZ for taking up manufacturing activities. We expect more investments to come into the SEZs through this route," a senior Commerce Ministry official told Business Line here.

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