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Archive for October, 2012

Electronics & Information Technology (IT) in India | IT Software, Services and BPO | Laws, Regulations, Policies and Patents

Posted by Rahul Dev on October 29, 2012

Article Source: http://techcorplegal.com/Blog_Technology_Law_Business_Research/2012/10/29/electronics-information-technology-software-patents/

In recent times, Information Technology (IT) has made possible information access at astronomical speeds. India is now connected to the major global economies in many different ways. Through economic liberalization of India in the 1990s, India opened itself to foreign trade and connected its nascent software industry to its clients in America and Western Europe. Over the past few years, the Indian Information Technology- Information Technology-Enabled Services (IT-ITES) industry has grown at a remarkable pace.

After the economic reforms of 1991-92, liberalization of external trade, elimination of duties on imports of information technology products, relaxation of controls on both inward and outward investments and foreign exchange and the fiscal measures taken by the Government of India and the individual State Governments specifically for IT and ITES have been major contributory factors for the sector to flourish in India and for the country to be able to acquire a dominant position in offshore services in the world. The major fiscal incentives provided by the Government of India have been for the Export Oriented Units (EOU),Software Technology Parks (STP), andSpecial Economic Zones (SEZ).

Software Technology Parks (STPs): For the promotion of Software exports from the country, the Software Technology Parks of India was set up 1991 as an Autonomous Society under the Department of Electronics and Information Technology. The services rendered by STPI for the Software exporting community have been statutory services, data communications servers, incubation facilities, training and value added services. Various benefits under STP Scheme include: Income Tax benefits under Section 10 A & 10 B of the IT Act upto 31st March 2011, Customs Duty Exemption in full on imports, Central Excise Duty Exemption in full on indigenous procurement, Central Sales Tax Reimbursement on indigenous purchase against from C, All relevant equipment / goods including second hand equipment can be imported (except prohibited items), Equipment can also be imported on loan basis/lease, 100% FDI is permitted through automatic route, Sales in the DTA up to 50% of the FOB value of exports permissible, Use of computer imported for training permissible subject to certain conditions, Depreciation on computers at accelerated rates up to 100% over 5 years is permissible, Computers can be donated after two years of use to recognized non-commercial Educational Institutions/Hospitals without payment of duty, Export proceeds will be realized within 12 months, Units will be allowed to retain 100% of its export earnings in the EEFC account. Click here to visit STPI website –http://www.stpi.in/

Special Economic Zones (SEZ) Scheme: In 2005, the Ministry of Commerce, Government of India has enacted theSpecial Economic Zone (SEZ) Act, with an objective of providing an internationally competitive and hassle free environment for exports. A SEZ is defined as a “specifically demarked duty-free enclave and shall deemed to be foreign territory (out of Customs jurisdiction) for the purpose of trade operations and duties and tariffs”.The SEZ Act, 2005, supported bySEZ Rules, came into effect on 10th February, 2006. It provides drastic simplification of procedures and a single window clearance policy on matters relating to central and state governments. The scheme is ideal for bigger Industries and has a significant impact on future Exports and employment. The SEZ Scheme offers similar benefits to SEZ units as compared to those under STPI in respect of indirect taxes, with some minor differences in operational details. There is a however a significant difference, in respect of income tax holiday. In SEZ Scheme the exemption from income tax is tapered down over 15 years from the date of commencement of manufacture. There is 100% exemption of export profits from income tax for the first five years, 50% for the next five years and 50% for the five years subject to transfer of profits to special reserves.

The SEZ policy aims at creating competitive, convenient and integrated Zones offering World class infrastructure, utilities and services for globally oriented businesses. The SEZ Act 2005 envisages key role for the State Governments in Export Promotion and creation of related infrastructure. A few salient features of SEZ scheme are as under: Special Economic Zones (SEZs) are being set up to enable hassle free manufacturing and trading for export purposes. Sales from Domestic Tariff Area (DTA) to SEZs are being treated as physical export. This entitles domestic suppliers to Drawback/ DEPB benefits, CST exemption and Service Tax exemption. 100% Income Tax exemption on export profits available to SEZ units for 5 years, 50% for next 5 years and 50% of ploughed back profits for 5 years thereafter. This scheme, which is ideal for bigger Industries, has a significant impact on future Exports & employment. STPI Directors are acting as Development Commissioners for IT/ITeS SEZs. Click here to visit the website –http://www.sezindia.nic.in/.

Business Methods & Software Patents in India: In accordance with the provisions of Section 3(k) of the Indian Patents Act 1970, mathematical and business methods, computer programs per se and algorithms are not patentable. As per general practice, the Indian Patent Office may categorize a particular method as a business method if it relates to a monetary transaction or simple marketing or sale purchase method. As per present status of Indian Patents Act with regards to software, the interpretation of “computer programme per se” is a debatable issue and therefore, can been viewed in multiple ways. The main purpose of such provision is that the Indian Patent Office will not consider mere computer programs as patentable, but that does not, in any manner, means that software related inventions, i.e. inventions embodying software or computer programs cannot be patented.

The Indian Patent Office released aDraft Manual of Patent Practice and Procedure in 2011providing guidelines on the types of claim allowed in respect of software-related inventions. As per the guidelines, if a claim in a patent application is not directed at a computer program per se it could be patentable, if all other patentability conditions are met.

Visit our Business Blog homepage: http://research.techcorplegal.com/

International Technology Business & Patent Law Firm in India: Patent Drafting, Patent Searching, Patent Filing in India, PCT National Phase Filings in India: http://www.techcorplegal.com/

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Contributors: Prity Khastgir andRahul Dev

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Starting a New Business in Singapore|Singapore Business Guide

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Our Business Law Services: Company & Individual Representation, Business Litigation & Corporate Law, Business formation & Review of Business Formation Documents, Cyberlaw, New Media, & Internet/Technology, Entertainment, Sports, & Media, Contract Negotiation, Review, & Drafting, Intellectual Property ("IP"), Real Estate Transactions and Landlord/Tenant Disputes, Employment Law, Securities, Mortgage, Banking & Finance, Mergers & Acquisitions, Legal Malpractice / Ethics Violations / Company Policies / Website Terms & Conditions, Brand Identity & Positioning, Brand and Intellectual Property Licensing and Development, Compliance, Preparation of Business Plans, Business Process, Efficiency Consulting, & Outsourcing, Investment & Strategic Ventures, Project Finance & Management, Competitive Landscape Analysis, Right Time to Incorporate a Legal Entity, Finance, Funding & Venture Capital, Type of Entity: Company vs. Partnership vs. Sole Proprietorship, Right Location (Jurisdiction) to Incorporate a Company, Company Incorporation in India, Partnership, Sole Proprietorship & LLP in India, Setting up Liaison / Representative / Branch/ Project Office in India, Franchising in India, Licensing in India, Retail in India, Things to do Before Quitting a Job and Starting a Business, Selecting a Business Name, Branding & Trademarks, Shareholders & Stock Options, Tax Planning & Management, Employees, Interns, Human Resource (HR) Management & Labor Laws, Joint Ventures, Corporate Restructuring, Mergers & Acquisitions, Commercial Disputes, Litigation & Arbitration, Foreign Direct Investment & Foreign Exchange Regulations in India

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LAW FIRM IN INDIA: GUIDE TO OFFSHORE OUTSOURCING TO INDIA, POSSIBLE LEGAL ISSUES

Posted by Rahul Dev on October 1, 2012

Article Source: http://techcorplegal.com/Blog_Technology_Law_Business_Research/2012/09/30/guide-to-offshore-outsourcing-to-india-possible-legal-issues-and-law-firm-in-india/

OFFSHORE OUTSOURCING

The practice of engaging an external organization for performing in a country where the products or services are not developed or manufactured is termed as “Offshore Outsourcing”. The business is performed by a foreign country in a foreign country. Sending work overseas with higher wages reduces the country’s own domestic employment and domestic investment. In countries like United States and United Kingdom the customer service jobs and jobs in IT sector have been or are potentially affected.

COST – not the only reason for offshore outsourcing

It is definitely one of the main reasons for offshore outsourcing but there are other reasons as well. When it is decided to outsource the work initial investment is needed in terms of infrastructure, recruitment, training, etc, while the cost advantage is seen much later. There are savings in offshore outsourcing, but the quality and value addition is realized only after the outsourcing begins. NASSCOM reported that India’s great attraction as the outsourcing destination is its unbeatable value proposition and the PQR (Productivity, Quality and Rate) factor. India is at an advantageous position due to its active government support and stable political climate. According to a cyber lawyer, India is at the 12thposition that has cyber legislation apart from countries like the US, Singapore, France, Malaysia and Japan.

OFFSHORE OUTSOURCING to INDIA

India is the most highly sought country as it has become a crucial necessity for the business organizations that are trying to reduce their overhead expenses. India is looked upon by many countries as a base in foreign land where their operations and business can be expanded and the outsourcing arrangements can be made for testing the grounds. Technically skilled manpower is highly available in India. After US India is the second largest exporter of software and has many software companies with ISO 2000 certification than any other country in the world. India is rated as number one choice for offshore outsourcing by a World Bank funded study.

Indian Laws

From the perspective of doing business in India and offshore outsourcing to India, the most important law which regulates all aspects relating to a company is the Companies Act. It contains provisions relating to formation of a company, powers and responsibilities of the directors and managers, raising of capital, holding company meetings, maintenance and audit of company accounts, powers of inspection and investigation of company affairs, reconstruction and amalgamation of a company and even winding up of a company. In addition, the Indian Contract Act is another legislation which regulates all the transactions of a company. It lays down the general principles relating to the formation and enforceability of contracts; rules governing the provisions of an agreement and offer; the various types of contracts including those of indemnity and guarantee, bailment and pledge and agency. It also contains provisions pertaining to breach of a contract. The other major legislations include: the Industries (Development and Regulation) Act 1951; Trade Unions Act; the Competition Act, 2002; the Arbitration and Conciliation Act, 1996; the Foreign Exchange Management Act (FEMA),1999; laws relating to intellectual property rights, etc.

Legal Issues in Offshore Outsourcing

There has been number of legal issues in offshore outsourcing to India as more and more global organizations are outsourcing their business processes and IT services here. If an organization is outsourcing to India, it should be made sure that the organization is aware of Intellectual Property protection and the data privacy and protection in India.

Taxation in India: Offshore outsourcing decision is greatly influenced by taxation policy of India. Before outsourcing, the tax associations should be understood. This is an important legal issue as different countries have different tax laws. The outsourcing provider can be consulted about which tax provision would be suitable in the legal contract.

Choice of Law & Contracts in India – While executing a legal contract, the laws of a single country are not sufficient. Accordingly, prior to signing a legal contract, it should be made sure that the law governing the contract is decided. Consequently, if the choice of law is expressed in the contract, it will definitely be supported in the Indian courts.

We are a full service law firm based in India, providing services to clients worldwide. As an international law firm, we offer specialized services to our clients for setting up business in India and assisting our clients with all regulatory compliance. We work closely with leading US and European law firms and attorneys in India.

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Visit our Business Blog homepage: http://research.techcorplegal.com/

International Technology Business & Patent Law Firm in India: Patent Drafting, Patent Searching, Patent Filing in India, PCT National Phase Filings in India: http://www.techcorplegal.com/

International Business & Management Company in Singapore: Starting a Business in Singapore: http://www.techcorpgroup.com/

Contributors: Prity Khastgir andRahul Dev

We regularly update ourFacebook pageand share similar stories onTwitter. You can also check out our premium service offerings for Mobile Applications, Social Media & Cyber LawsandPharmaceuticals, Biotechnology, Food & Healthcare
To know more about us, get connected with us on
LinkedInor mail us atinfo [at] techcorplegal [dot] com

Our Business Law Services: Company & Individual Representation, Business Litigation & Corporate Law, Business formation & Review of Business Formation Documents, Cyberlaw, New Media, & Internet/Technology, Entertainment, Sports, & Media, Contract Negotiation, Review, & Drafting, Intellectual Property ("IP"), Real Estate Transactions and Landlord/Tenant Disputes, Employment Law, Securities, Mortgage, Banking & Finance, Mergers & Acquisitions, Legal Malpractice / Ethics Violations / Company Policies / Website Terms & Conditions, Brand Identity & Positioning, Brand and Intellectual Property Licensing and Development, Compliance, Preparation of Business Plans, Business Process, Efficiency Consulting, & Outsourcing, Investment & Strategic Ventures, Project Finance & Management, Competitive Landscape Analysis, Right Time to Incorporate a Legal Entity, Finance, Funding & Venture Capital, Type of Entity: Company vs. Partnership vs. Sole Proprietorship, Right Location (Jurisdiction) to Incorporate a Company, Company Incorporation in India, Partnership, Sole Proprietorship & LLP in India, Setting up Liaison / Representative / Branch/ Project Office in India, Franchising in India, Licensing in India, Retail in India, Things to do Before Quitting a Job and Starting a Business, Selecting a Business Name, Branding & Trademarks, Shareholders & Stock Options, Tax Planning & Management, Employees, Interns, Human Resource (HR) Management & Labor Laws, Joint Ventures, Corporate Restructuring, Mergers & Acquisitions, Commercial Disputes, Litigation & Arbitration, Foreign Direct Investment & Foreign Exchange Regulations in India

Our Patent, Trademark & Legal Services: Patent Searching: Worldwide Patent Searching, Patentability Search, Invalidation Search, Freedom to Operate/ FTO Search, Infringement Search, State of the Art Search, Patent Process and Support Services Outsourcing: Patent Drafting, Patent Illustrations, Patent PCT Filing in India: Patent Filing, Market Research before International Filing, Patent Prosecution and Patent Grant Services in India: Patent Prosecution in India, Preparing Response to Office Action, Post Patent Grant Services for Licensing Inventions: Patent Licensing, Licensability Analysis, Patented Technology Commercialization Services for Individuals, SMEs, Companies: Patent / Technology Commercialization, Due Diligence & SWOT Analysis, Worldwide Trademark/ TM Searching and Filing Services: Trademark Searching, Trademark Filing, Trademark Prosecution & Licensing, Trademark Due Diligence, Legal Research, Process and Support services Outsourcing: Legal Research, Contract Management, Litigation Support, Patent Litigation Support, Medical Litigation Support

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