Software Technology Parks of India Scheme

The Software Technology Parks of India (STPI) is an autonomous society under the Ministry of Electronics and Information Technology (MeitY), Government of India, designed to promote and nurture India’s IT and software industry. For MSMEs in the IT sector, the STPI scheme offers access to world-class infrastructure, including state-of-the-art facilities and technology parks. Additionally, it provides crucial policy support, helping you navigate regulations and ensuring smooth business operations.

The scheme also offers financial incentives, such as tax exemptions and subsidies, making it easier and more affordable for MSMEs to grow. If you aim to expand globally and increase your software exports, the STPI scheme can help position your business as a competitive player in the international market. By participating, you can tap into valuable resources and expertise that will support your growth and success on the global stage.

What is the STPI Scheme?

Launched in 1991, the STPI scheme is a 100% export-oriented initiative by the Government of India. Its main goal is to encourage the development and export of computer software and professional IT services. The scheme allows you to set up your unit anywhere in India and enjoy several fiscal and infrastructural benefits to make your business globally competitive.

Objectives of the STPI Scheme

• Promote and accelerate IT and software exports from India.
• Foster a supportive ecosystem for tech startups and entrepreneurs.
• Provide state-of-the-art infrastructure, including high-speed internet and incubation facilities.
• Support research and development in emerging technologies (AI, IoT, blockchain, etc.).
• Encourage innovation and entrepreneurship in the IT sector.

Key Features of the STPI Scheme

• You get approvals through a single window clearance system, making the process quick and hassle-free.
• You can set up your STP unit anywhere in India, giving you complete flexibility in choosing your business location.
• If your project’s Indian investment is less than ₹100 million, the jurisdictional STPI authority can approve it directly, speeding up your setup.
• You are allowed 100% foreign equity, so international investors can fully own your business.
• All your hardware and software imports for the STP unit are completely duty-free, helping you save significantly on initial costs.
• You can import second-hand capital goods without any restrictions, reducing your capital expenditure.
• Re-export of capital goods is permitted, giving you flexibility if you want to upgrade or change equipment.
• You only need to meet simplified export performance norms that are ‘Positive Net Foreign Exchange Earnings’.
• You can use your computer systems for commercial training within the STP premises, as long as you don’t install terminals outside the unit.
• Sales in the Domestic Tariff Area (DTA) are allowed, so you can tap into the Indian market along with exports.
• If you purchase capital goods from the DTA, you are entitled to a refund of GST, improving your cash flow.
• Capital invested by foreign entrepreneurs, know-how fees, royalties, and dividends can be freely repatriated after paying applicable income taxes.
• After two years of import, you can donate items like computers and peripherals to recognized educational institutions, charitable hospitals, public libraries, and government organizations without paying any duties.
• You can claim 100% depreciation on computers and peripherals over a period of five years, which helps in tax planning and asset management.

Financial Assistance Offered Under the STPI Scheme

• Incubation Support
  Access to state-of-the-art labs, mentoring, and market connections.
• Refunds
  GST refunds on capital goods purchased domestically.
• Duty Exemptions
  Complete exemption from customs duty on imports for business use.

Eligibility Criteria for the STPI Scheme

Eligibility

You are eligible if:

• Your company is registered in India under the Companies Act.
• You are engaged in software development or IT-enabled services.
• Your business is 100% export-oriented (for STP unit status).
• You have a detailed business plan for export.

Non-eligibility

You are not eligible if:

• Your business does not focus on exports.
• You have a registered office or premises (owned or leased) for your unit.

Documents Required for STPI Scheme

• Certificate of Incorporation
• Board Resolution for STPI unit setup
• Project Report (company profile, business model, export projections)
• Lease Agreement or ownership proof of premises
• Address Proof for the location of Unit
• List of Board of Directors
• Director KYC documents (ID, address proof, PAN)
• Audited financial statements (for existing businesses)
• IEC (Import Export Code) Certificate
• Master agreement for software export
• Five years Projected Financial statement
• Board Resolution for registration of STP Unit
• Copy of MOA/AOA in case of the company
• Payment of Charges based on turnover
• Any other document required as per the guidelines.

How to Apply for the STPI Scheme?

Step 1: Visit the official STPI registration portal.

Step 2: Click on ‘I want to register as New Unit’.

Step 3: Fill out the user application form and click ‘Register’.

Step 4: After successful registration, you’ll receive your Login ID and Password on your registered email ID.

Step 5: Go back to the portal and log in using your new Login ID and Password.

Step 6: Enter the Captcha and click ‘Login’.

Step 7: You’ll be prompted to set a new password. Enter and confirm your new password, then click ‘Save’.

Step 8: Select the appropriate unit type (STP, EHTP, Non-STP, Incubation, or Startups) under the Unit Management System.

Step 9: Based on your selection, fill in all the required details and upload the necessary documents.

Step 10: Submit your application form online.

For Non-STPI registration:

• You must submit quarterly and annual returns in the prescribed formats.
• Pay the application fee of INR 1,000 + GST.
• The registration certificate you receive will be valid for three years.

Benefits of the STPI Scheme

• Export Promotion
  You get a platform to export your software services globally with ease.
• Financial Incentives
  Enjoy duty-free imports, GST refunds, and access to seed funding for startups.
• Single-Window Clearance
  All statutory approvals and compliances are streamlined through a single window, saving you time and effort.
• Infrastructure Support
  Access to world-class incubation centers, high-speed internet, and advanced labs.
• Tax Benefits
  You now get major indirect tax benefits like duty-free imports of hardware and software, GST refunds on capital goods from the domestic market, and free repatriation of profits after taxes.

Real-World Examples of STPI Scheme

• HealthTech startups receiving seed funding under NGIS.
• FinTech companies scaling up with CoEs support.
• IT enterprises export software services globally from STPI units.

Related Government Support Plans with STPI

Final Words

If you are an MSME owner in the IT or software sector, the STPI scheme is your gateway to global markets. With its robust support system, financial incentives, and world-class infrastructure, you can scale your business and compete internationally. Take advantage of the STPI scheme to unlock new growth opportunities for your enterprise.