STPI maintains internal engineering resources to provide consulting, training and implementation services. Services cover network design, system integration, installation, operations and maintenance of application networks and facilities in varied areas. It is an export oriented scheme for the development and export of computer software, including export of professional services. The process development of STPI is in accordance to the Quality Management System, and adheres to ISO 9001 certification. The STP Scheme provides various benefits to the registered units, including 100% foreign equity, tax incentives, duty-free import, duty-free indigenous procurement, GST reimbursement, DTA entitlement, and deemed exporting.
What are the types of Company Formation in India?
Registration Process
Steps Involved in Incorporating a Company and Setting up of a 100% Export Oriented Unit under Software Technology Parks of India (STPI) .
Stage 1: Incorporation of Company
Registration with Registrar of Companies, Karnataka
Stage 2
Application to income tax department to obtain Permanent Account Number (PAN) or Corporate TAX ID & Tax deduction Account Number (TAN) to withhold & remit the withholding taxes
Stage 3
Application to Joint Director General - Foreign Trade for Importer Exporter Code (IEC)
Stage 4
Application to Software Technology Parks of India (STPI) to set up a 100% Export Oriented Unit (EOU) Documents to include:
1. Application Form in the prescribed form
2. Memorandum and Article of Association
3. Board Resolutions for setting up STP Unit and persons authorized to sign.
4. Resume of Person Heading the operation / CEO
5. Detailed project report / Business plan consist of
- Company profile
- Promoters background
- Units Area of Expertise / Services offered
- Marketing Strategy / Marketing Arrangements
- Manpower plan
- Future plans
6. Financials statement like :
- Cost of project & Means of finance
- Projected P&L A/c.
- Projected Balance Sheet
- Projected Cash flow / fund flow statement
- Export workings - (As per Transfer pricing guidelines where ever applicable)
7. Other documents like
- Copy of FIRC's and letter filed with RBI for receipt of Foreign equity
- Copy of service agreement signed with parent company / clients/ PO with clients / Master service agreement
8. Initial application processing fee of INR 2,500 and Advance service charges of INR 22,500 at the time of executing the legal agreement. Service charges to be paid annually as per the slabs given in the application.
Stage 5
On receipt of Letter of Permission (LoP) from STPI, enter into legal undertaking with STPI within 45 days from the date of LoP.
Stage 6
Approach Customs authorities to avail duty concessions by setting up a Private bonded warehouse.
The Software Technology Park (STP) scheme is for providing facilities to IT industry for undertaking software development and IT enabled services for 100% exports using data communication links in the form of physical exports including export of professional services. Individual units can also be allowed to do business in the domestic (Indian) market up to 50% of the exports. STP units can also undertake commercial training. STP units also regulate the IT business through licensing, acting as a link between the customer and Government authorities and agencies. Under the scheme, IT industries are provided certain concession in duties, levies and taxes.
The major attraction of STP scheme is a single point contact service to the STP unit:
- Approval as a STP unit
- Approval for enhancement of capital goods
- Issuance of green card
- Guidance for custom bonding
- Certification of imports
- Certification of exports
- Permission for excise exemption
- Permission for DTA sales
- Permission for re-export
- No objection certificate for change of name
- No objection certificate for change of location
- CST reimbursement
Application processing fees and three years advance annual service charges considering your projected export turnover.
Application processing fees : Rs. 2500.00
Service charges on the basis of projected exports :
| Below Rs. 25 lakhs per annum | Rs. 8,000.00 per annum |
| Rs. 25 to 50 lakhs per annum | Rs. 16,000.00 per annum |
| Rs. 50 lakhs to Rs. 3 crores per annum | Rs. 55,000.00 per annum |
| Rs. 3 to 10 crores per annum | Rs. 1,10,000.00 per annum |
| Rs. 10 to 25 crores per annum | Rs. 2,25,000.00 per annum |
| Rs. 25 to 50 crores per annum | Rs. 2,50,000.00 per annum |
| Rs. 50 to 100 crores per annum | Rs. 3,50,000.00 per annum |
| Rs. 100 to 500 crores per annum | Rs. 5,75,000.00 per annum |
| Rs. 500 to 1000 crores per annum | Rs. 6,00,000.00 per annum |
| Above Rs. 1000 crores per annum | Rs. 6,50,000.00 per annum |
Only projects having a minimum investment of Rs. 1 crore in plant and machinery shall be considered for establishment as EOUs under the scheme.
100% foreign direct investment, NRI-repatriable, NRI-non repatriable, resident holding and combination thereof allowed.
Software industry being a non-polluting industry can be set up in any location. The STP unit can be an individual unit by itself or it can be one such unit located in an area designated as STP complex.
The obligations on units under the STP Scheme:
- Development of IT Software/ Electronic Hardware for Exports.
- Rendering IT enabled services for software exports.
- Execution of Onsite Consultancy projects at customer site abroad.
Yes, STP unit can do the domestic business subject to 50% of foreign exchange earned with prior permission of Director of STPI.
Yes, it is mandatory to get the company registered in India with the Registrar of Companies under the Companies Act 1956 and companies Act 2013.
The Software Technology Park (STP) scheme is a 100% export oriented scheme for the development and export of computer software using data communication links or in the form of physical media including the export of professional services.
- The major attraction of this scheme is single point contact service to the STP units.
- STP units are exempted from payment of corporate income tax upto 2010.
- All the imports of Hardware & Software in the STP units are completely duty free. Import of second hand capital goods is also permitted.
- An Indian company
- A Subsidiary of a Foreign Company
In order to become certified member unit under STP scheme, approval from the competent authority is required. The following steps are involved for obtaining approval:
- An application in the prescribed format for registering and establishing a STP unit is to be submitted to Software Technology Parks of India.
- The application should be along with the details of the Software Project in terms of strengths, area of expertise, marketing arrangement, business plans, means of finance.
Yes, along with the STP application a detailed project proposal/report covering the details on area of expertise, core competency, marketing arrangement, business plans and means of finance needs to be submitted.
100% Foreign Direct Investment, NRI-Repatriable, NRI-Non Repatriable, Resident Holding and combination thereof is allowed
Private Bonded Warehouse is a warehouse declared by Customs Authorities to carry out Export Processing under STP Scheme.
Yes operations under the STP Scheme can be carried out from any location in the country.
Yes, subject to meeting the Minimum Export Performance norms, STP unit can do business in the DTA.
Capital Goods is the Hardware and infrastructure the unit is envisaging to procure for a value by the way of import, to set up the STP.
Subsequent to the approval granted by STPI, the approved unit will be signing a legal agreement, with a list of capital goods and Indigenous purchases for attestation to obtain Private Bonded Warehouse License from Customs Department.
A unit operating under STP scheme can always expand its operations or move to a new location
Importer Exporter code is a unique code number issued/required to every Importer-Exporter. An IE code be obtained by the companies operating under STPI by filling necessary application.
The units operating under STP Scheme can access Domestic Tariff Area (DTA) up to the level of 50% of the worth of software exported in value terms.
A unit operating under STP Scheme can import capital goods (i.e., Computer Hardware & Software and basic infrastructure support) without paying any Customs Duty, as may be levied to the importer in normal cases.
Any new Indian company, who is into innovative Technology/ Service and whose date of incorporation is within a year from the date of application for the Incubation facility at STPI, is eligible for availing the Incubation facility. The contact details and the Company profile have to be sent across. If the Company profile complies with the above criteria, then the company would be intimated accordingly.
Any Company fulfilling the above criteria can request for the Application form from the group mentioned below and submit it to STPI for further approval from the competent authority:
The company needs to submit the hardcopies of the MoA and AoA of the Company to STPI, before executing the License agreement.
The license term is initially for a period of 11 months which is extendable by 6 months twice.
Rs.5,000/- per work station per month, which includes electrical power, work place, air-condition and internet connectivity (32Kbps per Workstation).
No, PC / Desktop/ Laptop has not been provided at the Incubation facility, as most of the companies prefer to work using their own Laptops.
A notification has to be sent to STPI at least one month in prior, requesting for the termination of the license term. All dues would have to be cleared before the termination of license. Any damages caused to the infrastructure, during the operation of the company at specific Incubation unit, would be charged accordingly.