Developers of special economic zones ( SEZs) can now sell equity to foreign investors, a move that will pave the way for inflow of foreign capital to large export-driven duty-free enclaves across the country.
The Board of Approval (BoA), the nodal authority for SEZs in India, has clarified that developers selling of equity to foreign investors does not result in sale or transfer of ownership of land.
“The department of legal affairs have clarified that identity of a company does not change with any change in management or pattern of shareholding. Change in equity structure through transfer, sale, amalgamation and consequent change in the management cannot be said transfer or sale of land. The land would continue to vest in the company. It has also been clarified that while it may be considered as sale or transfer of the business of the company but not a sale of land,” the minutes of the BoA meeting of September 19, reviewed by HT, said.