IT Park and SEZ Setup in Noida: Guide for Foreign IT Companies

Noida is not a newcomer to the IT sector. STPI Noida was the first STPI centre in the entire NCR region, established in 1992, and the STPI-registered units under its jurisdiction generated Rs. 51,005.81 crore in IT and ITeS exports in FY 2023-24 alone. TCS, Wipro, and HCL have had significant Noida presences for years. What has changed is the policy layer surrounding those fundamentals.

The UP IT and ITeS Policy 2022, the UP GCC Policy 2024, and the UP Data Centre Policy 2021 together form a substantially more structured incentive architecture than what existed three years ago. For a foreign IT company evaluating IT park setup in Noida today, the decision involves understanding three overlapping frameworks: the central government’s STPI and SEZ schemes, the state-level UP incentive policies, and the standard Companies Act and FEMA framework through which the legal entity is created. This guide covers all three.

Why Is Noida a Preferred Location for IT Park Setup Among Foreign Companies?

Noida offers foreign IT companies proximity to Delhi and IGI Airport, a deep talent base built across three decades of software export activity, three active STPI-registered zones, and a growing SEZ ecosystem, all now supported by the UP IT and ITeS Policy 2022 and the UP GCC Policy 2024 which together provide capital subsidy, operational expense support, and stamp duty benefits.

Noida’s position as a technology hub is backed by more than just reputation. Located in Gautam Buddh Nagar, a district recognised by STPI as a major IT cluster in North India, it is home to a dense concentration of IT and ITeS companies spread across Noida, Greater Noida, and the Noida Expressway corridor. Over the years, this has created one of India’s most established technology and commercial real estate markets outside Bengaluru and Hyderabad. For foreign companies considering IT park setup in Noida, the advantage extends beyond access to talent. The supporting ecosystem, including IT service providers, managed service partners, consultants, and commercial developers, is already mature and operating at scale.

What Is the STPI Scheme and How Does It Apply to IT Park Setup in Noida?

The STPI scheme is a 100% export-oriented scheme for software development and export under the Ministry of Electronics and Information Technology. STPI-registered units in Noida receive duty-free import of capital goods, single-window clearance, infrastructure support, and SOFTEX form facilitation for foreign exchange compliance. The income tax exemption under Section 10A that older units enjoyed was discontinued after 2011 and does not apply to new units.

STPI-Noida was established in 1992 as the first centre to come up in NCR as an IT hub, and it now controls sub-centres in Dehradun, Kanpur, Lucknow, Meerut, and Prayagraj. For a foreign IT company, registration under the STPI scheme provides:

• Duty-free import of capital goods, hardware, and consumables needed for software export
• Single-window clearance for documentation, licensing, and statutory filings
• SOFTEX form facilitation for reporting software exports to STPI and RBI
• High-speed data communication links and plug-and-play infrastructure at subsidised rates
• 100% FDI permitted under the Automatic Route for STPI-registered units

One important clarification: STPI and SEZ benefits are mutually exclusive. A company must choose one. A company operating under the STPI scheme cannot simultaneously claim SEZ benefits. This is a decision that must be made before registration, since switching between the two schemes later involves deregistration and re-registration, which disrupts operations.

STPI-registered units must primarily export 100% of their services or products. Domestic sales from the unit are permitted up to 50% of the software export value in a given year, but the primary obligation is export performance. Units must submit SOFTEX forms quarterly or annually depending on export volume, maintain positive Net Foreign Exchange (NFE), and file quarterly and annual reports with STPI.

What Are the SEZ Options for IT Park Setup in Noida?

Noida and Greater Noida have established IT and ITeS Special Economic Zones offering units zero customs duty on imports, GST exemptions on procurement, and income tax exemptions on export profits under Section 10AA of the Income Tax Act. STPI Jurisdictional Directors serve as Development Commissioners for IT and ITeS SEZs in the region, providing an integrated regulatory interface.

For foreign IT companies looking at SEZ registration in Noida for IT companies, the SEZ option differs from STPI in one critical way: the income tax benefit. One of the main reasons companies choose the SEZ route is the long-term tax benefit under Section 10AA. The structure provides a 100% deduction on export profits for five years, followed by reduced deductions over the next ten years, subject to certain conditions. Unlike the earlier Section 10A framework, this incentive remains available to qualifying new SEZ businesses.

Key SEZ benefits for IT park setup in Noida:

The tradeoff against STPI is administrative complexity. SEZ units operate under the Special Economic Zones Act 2005 and the SEZ Rules 2006, with a separate regulatory interface through the Development Commissioner. STPI registration is administratively lighter, which is why smaller IT companies and startups tend to prefer it over SEZ registration.

What Does the UP IT and ITeS Policy 2022 Offer for IT Park Setup in Noida?

The UP IT and ITeS Policy 2022 offers eligible IT and ITeS units capital subsidy on fixed capital investment, operational expense subsidy, stamp duty exemption, interest subsidy, EPF reimbursement for employment generation, and recruitment assistance, all available to both new and expansion units including foreign-owned subsidiaries registered in Uttar Pradesh.

The UP government has been systematically building state-level incentives on top of the central STPI and SEZ framework. For IT park setup in Noida specifically, the UP IT and ITeS Policy 2022 is the primary state incentive layer and covers:

• Capital subsidy on eligible fixed capital investment for new units
• Operational expense subsidy for units crossing minimum investment thresholds
• Rebate on land cost for units setting up in STPI parks and designated IT parks within UP
• Stamp duty exemption for registered IT and ITeS units
• Interest subsidy on term loans
• EPF employer contribution reimbursement as an employment generation incentive
• Recruitment assistance for companies hiring locally
• Incentives for quality certifications and patent filings

The policy explicitly covers co-working spaces and IT parks as eligible units, which is relevant for foreign companies wanting flexible entry before committing to dedicated office infrastructure.

What Is the UP GCC Policy 2024 and Does It Apply to Foreign Software Companies in Noida?

The UP GCC Policy 2024 is aimed at attracting Global Capability Centres to Uttar Pradesh by offering incentives tailored to the GCC business model. Companies setting up captive technology, engineering, analytics, or shared service operations in Noida can access a range of benefits, provided they meet the policy’s eligibility requirements.

The Uttar Pradesh GCC Policy 2024 marks a transformative initiative aiming to position Uttar Pradesh as a major hub for GCCs in India. For foreign IT companies evaluating IT park setup in Noida as a GCC rather than a standalone commercial product company, this policy provides a distinct and more targeted incentive structure than the broader IT and ITeS Policy. The two policies can be assessed in parallel, but a company typically applies under the one that better matches its operational model.

What Is the Standard Legal and FEMA Framework for IT Park Setup in Noida?

IT park setup in Noida begins with incorporating a Private Limited Company under the Companies Act 2013 through the MCA’s SPICe+ process. After incorporation, FEMA compliance requires filing Form FC-GPR with RBI within 30 days of share allotment, followed by STPI or SEZ registration, GST registration, and LUT filing before the first export invoice.

The Companies Act incorporation process for IT park setup in Noida is identical to any Private Limited Company incorporation in India. Two shareholders, two directors with at least one Indian resident, no minimum capital, 100% FDI under the Automatic Route for software and IT services, and SPICe+ filing on the MCA portal covering incorporation, DIN, PAN, TAN, and EPFO and ESIC registration in a single integrated form.

Post-incorporation sequence specific to IT companies:

• FC-GPR with RBI within 30 days of share allotment to the foreign investor
• STPI registration or SEZ Letter of Approval from the Development Commissioner (choose one, not both)
• GST registration before the first invoice
• Letter of Undertaking on the GST portal before the first export invoice to access zero-rated export treatment
• SOFTEX form registration with STPI for reporting software exports (STPI route only)
• INC-20A within 180 days of incorporation confirming commencement of business

For companies operating under the STPI scheme and exporting software services, the RBI purpose code for foreign remittances must be correctly specified at the bank. Purpose code P0802 covers software consultancy and implementation, and P0803 covers other software services and BPO. Using the wrong purpose code creates GST refund complications and FEMA documentation gaps.

Conclusion

IT park setup in Noida involves navigating two parallel tracks simultaneously. The central government track covers STPI scheme registration or SEZ Letter of Approval, SOFTEX reporting, and FEMA compliance under RBI guidelines. The state government track covers UP IT and ITeS Policy 2022 incentive applications, and for GCC-model companies, the UP GCC Policy 2024. Neither replaces the other and the two tracks must be managed independently.

The mistake foreign IT companies most commonly make when evaluating IT park setup in Noida is treating STPI registration as the end of the compliance exercise rather than the beginning of it. The STPI letter of approval opens the benefits window. Keeping that window open requires quarterly SOFTEX filings, positive NFE maintenance, annual reports, and continuous UP state incentive claim management throughout the policy period.

CorporateLegit advises foreign IT companies on IT park setup in Noida, covering MCA incorporation, FEMA compliance, STPI registration, SEZ registration in Noida for IT companies, UP IT Policy incentive applications, GST and LUT filing, and ongoing secretarial and tax compliance. Reach out to CorporateLegit before selecting between the STPI and SEZ routes.