SEZ Unit Registration: Set Up a Unit in a Special Economic Zone
SEZ unit registration means getting a Letter of Approval from the Development Commissioner so your company can operate inside a notified Special Economic Zone. You apply on the SEZ Online portal in Form F. The approval committee decides within 15 days of receiving the proposal, but your papers must be complete first.
What it is
SEZ unit registration is the approval process for a company that wants to manufacture goods or provide services from inside a Special Economic Zone. Once approved, the unit works under a Letter of Approval (LOA) issued by the Development Commissioner of that zone.
The rules come from the Special Economic Zones Act, 2005 and the SEZ Rules, 2006. The application is made in Form F through the SEZ Online portal, and the proposal goes before the Approval Committee under Rules 17 and 18. Here is the catch: the zone approval does not replace your other registrations. If you already export from outside a zone, start with your import-export registration; you will need an IEC in any case.
Who it applies to
Manufacturers planning exports
Picture a Faridabad auto-component maker whose orders are mostly from overseas buyers. It can set up inside a zone. Your plan must show positive net foreign exchange, so the export plan matters.
Service exporters
IT, ITES and other service companies take space in a zone as units. Their approval and reporting run through SEZ Online.
Existing companies expanding
A company based in Faridabad or Gurugram can open a new unit in a zone while its main business continues outside. The unit still gets its own approval and its own bond.
Why it matters
Separate approval, clear rules
The LOA sets out what you may produce or provide, so you know what the unit may do before you spend on a lease or machinery.
Export-led structure
The framework is built around exports and net foreign exchange earnings. If your orders are overseas, the structure fits your business.
Tax and duty treatment
Units work under the duty and tax treatment set out in the SEZ Act and Rules. Whether a benefit applies depends on your activity and start date, so check it with your tax adviser before you commit.
Documents required
About the company
- Certificate of incorporation, MOA and AOA
- PAN and IEC copies
- Board resolution authorising the application
- Director identity and address proofs
About the project
- Project report with feasibility and financial projections
- List of capital goods and raw materials with cost
- Provisional space offer from the developer
- Pollution control undertaking where it applies
About finances
- Last three years of income tax returns
- Audited financial statements
- Source-of-finance details
- Affidavit on stamp paper, notarised
How it works
Register on SEZ Online
We register the company on the portal and fill the tabs of the new unit application. The project report and financial details are prepared with your inputs.
Submit Form F with the fee
We file Form F online, print it for signature and send the physical set with the application fee, which the Development Commissioner’s procedure lists as ₹5,000 by demand draft.
Defend the proposal before the committee
The committee may approve, approve with modifications or reject within 15 days of receiving the proposal. We reply to any queries it raises.
Finish the bond, IEC and lease
After the LOA comes the bond-cum-legal undertaking in Form H on ₹100 stamp paper (notarised), the IEC if you lack one, and the registered lease deed within six months of the LOA, as the published procedure states.
Timelines
Approval committee decision
Rule 18 gives the committee 15 days from receipt of the proposal. That is quick. We check the file before filing so queries do not eat into that time.
LOA validity
The LOA is valid for one year to start operations. The Development Commissioner may extend it by one more year if two-thirds of the set-up work, including construction, is complete.
After you start production
The approval then runs for five years, and further extension is possible on request. Net foreign exchange earnings are measured over five years from commencement under Rule 53.
What happens if you miss it
LOA lapses
Operations must begin within the LOA validity period. If they do not, you may need to seek an extension.
Lease deed delay
The published procedure expects a registered lease deed within six months of the LOA. Plan the lease early.
Net foreign exchange shortfall
A unit that does not achieve positive net foreign exchange over the five-year period can face action under the SEZ Act and Rules. Set realistic export volumes at the start.
Frequently asked questions
How long does SEZ unit registration take?
The Approval Committee decides within 15 days of receiving the proposal under Rule 18 of the SEZ Rules, 2006. The project report and papers take time to prepare. Once you give us the documents, we file Form F on SEZ Online and track the application. A clean, complete file is the quickest route to your Letter of Approval.
Which form is used to apply for an SEZ unit?
Form F of the SEZ Rules, 2006 is the application form. You fill it on the SEZ Online portal, print it, sign it and submit it to the Development Commissioner with the supporting documents. The bond that follows approval is in Form H. We prepare both and keep a checklist so nothing is missed.
What is the application fee?
The procedure published by the Development Commissioner’s office lists a demand draft of ₹5,000 with the application. Fee details can change by zone and notification, so we confirm the current amount with your zone before filing. The fee is separate from our professional fee, which we quote upfront.
Do I need an IEC for an SEZ unit?
Yes. The published set-up procedure lists the Importer-Exporter Code among the steps after the LOA, and the Form F documents ask for an IEC copy. If you do not have one yet, we can apply for it alongside the unit application.
How long is the Letter of Approval valid?
The LOA is valid for one year from issue to start operations. The Development Commissioner can extend it by another year if two-thirds of the set-up work is complete. After production begins, approval runs for five years with possible extension on request.
What is the bond-cum-legal undertaking?
It is the unit’s promise, in Form H on ₹100 notarised stamp paper, to use and account for goods properly and to achieve positive net foreign exchange. The bond amount is linked to the duty that would otherwise be payable. We draft it and arrange stamping and notarisation.
Can a service company set up an SEZ unit?
Yes. Service companies can take approval as units and report their exports through SEZ Online. The Form F process is the same, but the project report and approvals focus on the services and the premises you take in the zone.
What is net foreign exchange earnings?
It is the foreign exchange a unit earns minus what it spends abroad, and it must be positive over five years from the start of production under Rule 53. The project report must show how your plan meets it. We help build realistic projections.
Is SEZ registration the same as STPI or EOU registration?
No. An SEZ unit is approved by the Development Commissioner under the SEZ Act, 2005. STPI and EOU schemes work under different frameworks. We compare the options with you before filing so you pick the right one.
What it costs
Our fee plus the government fee that applies to your case, quoted before you commit. Tell us the situation and we will price it exactly.
Government cost: the application fee published in the Development Commissioner’s procedure is ₹5,000 by demand draft. Stamp paper for the affidavit and the Form H bond (₹100 each as published), the registered lease deed and notarisation are extra. Where a CA certificate is needed, a practising CA signs it.
Ready to begin?
Share your product or service plan and the zone you have in mind, and we will tell you what the Form F file needs before the first filing.