Lectures Delivered by Dr. Tabrez Ahmad

1. Law of Export Processing Zones
Dr. Tabrez Ahmad
Professor of Law
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
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2. Agenda
 Introduction
 Special Support
 Objective
 Indicative List of Industries
 Setting up firms in EPZ
 Facilities
 Imports to EPZ
 Incentives offered in EPZ
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
2

3. Introduction
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EPZ stands for Export Processing Zone.
Export Processing zones proliferated in the late 20th
century.
Most EPZs located in developing countries.
EPZs employing increased from 22.5 to 43 million people
in 2003.
The basic objectives of EPZs to enhance foreign exchange
earnings and to generate employment opportunities.
EPZs also known as Special Economic Zones in some
countries.
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
3

4. Intro…
Some countries have created special authority for EPZ
called as Export Processing Zone Authority.
Just like the official body to promote, attract and
facilitate foreign investment in EPZs.
Few governments have adopted an 'Open Door Policy'
to attract foreign investment.
An EPZ is defined as a territorial or economic enclave in
which goods may be imported and manufactured.
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
4

5. EPZ Special Support:
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Plots/factory BLDG in custom bonded area
Infrastructural facilities
Administrative facilities
Fiscal & non-fiscal incentives
EPZ attracts : foreign & local investment
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
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6. Objective:
 Provide special areas where potential investors would
find a congenial
investment climate & free from
cumbersome procedures.
 Promotion of foreign (FDI) & local investment
 Diversifiaction of export
 Dev. OF backward & forward linkages
 Generation of employment
 Transfer of technology
 Upgradation of skill
 Development of management
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
6

7. Indicative List of Industries:
Backward and forward linkage Industries
Garments and Garments Accessories
Agro-based Industries
Woven and Knitted Fabrics
Leather Products and Foot-Wear
Medical and Biological Instruments
Engineering Products
Pharmaceutical Products
Products
Industries based on new uses of Jute
Cutting/Polishing of Precious and Semi
Household Fittings and Equipment
Horological Instruments
Scientific Measuring Instruments
Do-it-yourself Tools and Equipment
Printing and Copying Equipment & Accessories
Textile
Chemicals
Software
Optical Goods
Electronic Products
Toys
Head-Wear
Plastic Moulded
Precious stones
Jewellery
Laboratory Ware
Aircraft Instruments
Musical instruments
Printing and Publishing
NB: This list is not exhaustive, only indicative.
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
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8. Setting up firms in EPZ
 India allows foreign investment in EPZs in convertible
foreign currencies with the option of establishing public or
private limited companies, or sole proprietorship or
partnership undertakings. Industries allowed to be
established in EPZs are classified as follows:
(a) Type A: 100 per cent foreign-owned firms, including
investment by Indian nationals ordinarily resident abroad.
Such as NIKE, REEBOK, ADIDAS.
(b) Type B: Joint venture projects between foreign and Indian
entrepreneurs resident in India. Such as , Falcon.
(c) Type C: 100 per cent Indian entrepreneurs resident in
India.
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
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9. Incentives offered in EPZ
 Fiscal incentives
 Tax holiday for 10 years;
 Exemption of income tax on interest on borrowed capital;
 Relief from double taxation subject to bilateral agreements;
 Complete exemption from dividend tax
 Exemption of income tax on salaries
 Duty-free import of machinery;
 Non-fiscal incentives
 Project expansion and product diversification without permission;
 Off-shore, local and international banking facilities;
 Freedom from national import policy restrictions;
 Expeditious import of raw materials on a documentary acceptance
basis;
 Back-to-back letter of credit for the import of raw materials
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
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10. Facilities
 Secured and protected industrial area;
 Land and factory buildings for rent;
 Electricity, telecommunication, gas and water facilities;
 Export and import permits issued in one day;
 Work permits for foreign nationals;
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
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11. Exports from EPZ
 Sales of Bangladesh goods against payment in foreign currency are treated as
exports.
 Concerning the repatriation of export procedures.
 exports made from EPZs must be declared to Customs using export forms .
 as per conditions of export letter of credit/ export agreement will be treated as
valid documents
 air waybill and other title documents of export consignments
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
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12. Imports to EPZ
 EPZ enterprises must submit six copies of an import declaration.
 The import declaration will be registered in the customs station.
 Then, five copies of the declaration will be handed over to the importer
or authorized agent.
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The import declaration will be endorsed as "Passed out of Customs
Control" by an authorized officer.
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The goods will be escorted from the port to the EPZ enterprises
without examination.
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
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13. Labour Issues in EPZ
 EPZ Authority is vested with the responsibility to
administer labour matters for all enterprises
located in EPZs
 Minimum Wages may be fixed for
 Skilled
 Unskilled
 Trainee etc.
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
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14. Why Invest in EPZ
• LAW & ORDER SITUATION
 INFRASTRUCTURE FACILITIES
 REDUCTION OF LEAD TIME
 COST OF DOING BUSINESS
• FRIENDLY POLICY OF GOVT
 INCENTIVES
 WIN – WIN VENTURES
Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
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15. Dr. Tabrez Ahmad,
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16. Dr. Tabrez Ahmad,
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17. Dr. Tabrez Ahmad,
http://corpolexindia.blogspot.in
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