How to Start an Industry in Puducherry A) General B) For FDI companies C) Foreign Technology Agreements D) Specific Approvals A) General Obtaining

provisional SSI registration/filing of IEM/ LOI/LOP Approval Provisional SSI registration Industrial Entrepreneur Memorandum(IEM) Applicability In the case of SSI units Authority Directorate of Industries and Commerce, Puducherry

In the case of medium and large Secretariat for Industrial delicensed industries Assistance Dept. of Industrial Policy & Promotion, Ministry of Comm. & Ind., New Delhi

Letter of Indent(LOI) In the case of licensed industries Secretariat for Industrial & Carry on Business Assistance Dept. of Industrial (COB) Policy & Promotion, Ministry of Comm. & Ind., New Delhi Letter of Permission (LOP) In the case of 100% EOUs a) Items for automatic approval b) Items other than automatic approval Development Commissioner of the EPZ,Chennai. Secretariat for Industrial Assistance Dept. of Industrial Policy & Promotion, Ministry of Comm. & Ind., New Delhi

Constitution of business organization Proprietorship/Partnership/Pvt Ltd/Public Ltd companies Form of business organization Proprietorship Partnership Pvt Ltd Co. Type of ownership Authority No registration required from Registrar of Firms, Pondicherry Registrar of Firms, Pondicherry

Individual ownership

Public Ltd Co.

Minimum 2 owners upto a maximum of 20 owners Minimum 2 and maximum 50 Registrar of Firms, Pondicherry shareholders with limited liability Minimum 7 and maximum Registrar of Firms, Pondicherry unlimited numbers with limited liability

Acquisition of land from PIPDIC / Govt authorities/private sources Purpose Land acquired in PIPDIC estate Authority Pondicherry industrial Promotion, Development and Investment Corporation(PIPDIC) PIPDIC. District Collector, Pondicherry. No Restriction (subject to the Approval of Agriculture Dept., Pondicherry.)

Government land Private land

Registration for incentives available, if any Purpose SSI, MSI, LSI units Authority Directorate of Industries and Commerce, Pondicherry.

Financial tie-up Medium or long term loan/short term loan for working capital Purpose Authority Term loan for acquisition of fixed assets Pondicherry industrial Promotion, Development and Investment Corporation(PIPDIC) PIPDIC.or Any commercial bank Working capital Pondicherry industrial Promotion, Development and Investment Corporation(PIPDIC) PIPDIC. or Any commercial bank

Fund to be raised through public issue Purpose Offer of shares to the public Authority As per the guidelines issued by RBI/SEBI

INDUSTRIAL GUIDANCE BUREAU Procedure for Starting an Industry Industrial Guidance Bureau
Flow Chart of IGB

Time Table of IGB Contact Address of IGB

Procedure IGB Flowchart Time Table Address

B) For FDI companies

Approval Applicability Authority Automatic Route All items/activities produced/carried Reserve Bank of India after out by new ventures, barring a few ensuring compliance of sectoral falling under automatic route for policy and equity caps stipulated FDI/NRI/OCB investment upto 100% if any. Automatic Route Existing companies proposing to raise Reserve Bank of India after foreign equity with an expansion ensuring compliance of sectoral programme, should fulfill (i) the policy and equity caps stipulated increase in equity level to result from if any. the expansion of the equity base of the company without acquisition of existing shares by NRI/OCB/foreign investors, (ii) money to be remitted in foreign currency and (iii) proposed expansion programme to be in the sectors under Automatic Route. Automatic Route Existing companies without an Reserve Bank of India after expansion program for eligibility ensuring compliance of sectoral under Automatic Route should fulfill policy and equity caps stipulated (i) they are engaged in the industries if any. under Automatic Route (ii) the increase in equity level will result in expansion of the equity base and (iii) the foreign equity in foreign currency. For Foreign Direct Investment under the Automatic Route, RBI has given permission to Indian companies to accept investment under this Route without obtaining prior approval from RBI. Investors are required to notify the concerned regional office of RBI of receipt of inward remittance within 30 days of such receipts and file required documentation within 30 days of issue of shares to foreign investors. Government Approval All proposals requiring IL under ID&R Foreign Investment Promotion Act, 1951 Board, Ministry of Industry, GOI, New Delhi Government Foreign investment exceeding 24% in Foreign Investment Promotion Approval the equity capital of units Board, Ministry of Industry, manufacturing items reserved for GOI, New Delhi small scale industries. Government All items requiring IL in terms of the Foreign Investment Promotion Approval locational policy notified by Board, Ministry of Industry, Government under NIP, 1991. GOI, New Delhi Government All proposals in which the foreign Foreign Investment Promotion Approval collaborator has a previous Board, Ministry of Industry, venture/tie up in India GOI, New Delhi Government All proposals relating to acquisition of Foreign Investment Promotion Approval shares in an existing Indian Company Board, Ministry of Industry, in favour of foreign/NRI/OCB investor GOI, New Delhi Government All proposals falling outside notified Foreign Investment Promotion Approval sectoral policy/caps or under sectors Board, Ministry of Industry, in which FDI is not permitted GOI, New Delhi RBI has granted general permission under FEMA for proposals approved by the

Government. Indian companies getting foreign investment approval through FIPB route do not require any further clearance from RBI for the purpose of receiving inward remittance and issue of shares to foreign investors. Such companies would notify the concerned regional office of the RBI about the receipt of inward remittance within 30 days and file the required documentation within 30 days after issue of shares to the foreign investors.

C) Foreign Technology Agreements Approval Automatic Approval for foreign technology collaboration agreements Applicability All industries for foreign technology collaboration agreement subject to (i) lumpsum payments not exceeding US$ 2 million (ii) royalty payable limited to 5% for domestic sales and 8% for exports subject to a total payment of 8% on sales over a period of 10 years and (iii) period of payment of royalty not exceeding 7 years from commencement of commercial production or 10 years from the date of agreement whichever is earlier. The limits of royalty are net of taxes. Automatic Payment of royalty upto 2% for Approval for use export and 1% for domestic sales is of foreign trade allowed on trade marks and brand marks and name of the foreign collaborator brand names without technology transfer. This royalty shall be paid as a percentage of net of sales . Automatic Payment of royalty upto 8% on Approval by exports and 5% for domestic sales by wholly owned wholly owned subsidiaries to offshore subsidiaries parent companies permitted without any restriction on the duration of royalty payments. Government For following categories, Govt approval is necessary: approval (i) Proposals attracting compulsory licensing (ii) Items of manufacture reserved for SSI sector (iii) Proposals involving any previous JV or technology transfer or trade mark agreement in the same or allied Authority Reserve Bank of India

Reserve Bank of India

Reserve Bank of India

Secretariat for Industrial Assistance Dept. of Industrial Policy & Promotion, Ministry of Comm. & Ind., New Delhi

field in India (iv) Extension of agreements (v) Proposals not meeting any or all the parameters for Automatic Approval

D) Specific Approvals Purpose Food & drug clearance Environmental clearance Applicability
Food & Drugs, Cosmetics manufacturing units For all manufacturing units except software units.

Authority Asst. Commissioner of Food & Drug Administration Pondicherry.

Dept of Science, Technology and Enveironment, Pondicherry. (DSTE), Pondicherry Units installed boilers except Boiler Licence Chief Inspector of Factories and baby boiler Boiler, Government of Pondicherry Mining of minerals Units require minerals Dept. of Industries and except minor minerals. Commerce Government of Pondicherry Storage of Units stores explosive Additional District Magistrate, explosives materials more than 20K Government of Pondicherry. clearance Lts Imported Units required to import Joint Directorate General of machinery/raw machineries/raw Foreign Trade, materials materials Ministry of Commerce, GOI, Pondicherry. Factory licence Units covered under Chief Inspector of Factories, Factories Act Government of Pondicherry. Site clearance For the Medium and Dept. of Industries and certificate for LOI Large Scale Industries Commerce holders for Government of Pondicherry. converting into IL Powerloom Powerloom units DIC/Textile Commissioner registration Quality Those require BIS Bureau of Indian Standards, Certification Chennai.