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Setting up shop in India / China
How much?
Buddha




msg:797138
 9:05 pm on May 12, 2004 (gmt 0)

Does anyone have an idea how much it would cost to start a company with 10 people in India/China?

Let's say 1000 square feet office and 10 English speaking employees for basic SEO stuff. (no programming or skilled labor)

From what I've heard, mkt labor rates are about $250/month in China. I don't know about India.

 

Woz




msg:797139
 11:43 pm on May 12, 2004 (gmt 0)

Welcome to WebmasterWorld Buddha,

I know nothing of India, but I have a few sketchy ideas about China.

As I say this is sketchy and would need verification from Chinese Business People or Officials, but as I understand from when I was last there a few years ago:-

The first obstacle is Capital. To register a business or foreign office in China you need to show evidence of some serious capital (6 figures US) sitting in a Chinese Bank. This needs to be verified and a certificate granted before you can proceed. Times were that said certificate could be obtained over a few expensive dinners but I believe times have changed.

Once that hurdle is overcome then you can proceed with the usual bureaucracy you would find in any country.

As to wages, they are usually very low in China as compared to the west (2 figures US per month for a rural factory worker) but it is not uncommon for accommodation and meals to be included in the package. This ranges from Factory Workers to Executives. I would image that Internet people would be more entrepreneurial so you might be looking at higher wages without extra benefits.

Onya
Woz

anallawalla




msg:797140
 3:53 am on May 13, 2004 (gmt 0)

I can speak for India as I have done some research into this. The most expensive city is Mumbai but you're also going to get a good level of education and Net-awareness there. I am biased, since I was educated there :)

A low-mid-range rent for a 4-person office is about US$125/month and salary is about $175/month. Rents in the CBD are a lot higher and not necessary for an SEO operation. If you plan to visit often, then you should choose suburbs that are easy to reach by train.

In the rest of India, rents and salaries will be lower. Remember, the best people are taken up by the major multinationals and the applicants will also size you up to gauge long-term prospects.

I would expect to pay much more than that to get English-language skills that would be acceptable in the West. While millions of Indians speak perfectly acceptable English, when they write it, the quality varies greatly, even if you ignore typos. Hence allow for a higher salary to find the better applicants.

Buddha




msg:797141
 4:03 am on May 13, 2004 (gmt 0)

So for China, I should partner w/ a local Chinese citizen. Setting up a business might require upfront cash.

For India, the labor rates are comparable w/ China, much more people speak English, and it doesn't cost much to set up a new business.

If I had to choose 1 based on the very limited info that I have right now, I would choose India.

vaniaul




msg:797142
 4:32 am on May 13, 2004 (gmt 0)

I'm sure you can get good techy guys here in India with good skill sets. Moreover, based in India I'm also involved in SEO since past 1 year.

Hope you have a good experience. By the way, Where are you based Buddha?

Buddha




msg:797143
 8:55 pm on May 13, 2004 (gmt 0)

I'm in California. Nice weather here now, but expensive labor costs here.

I've never been to India before, but I recently visited China and I have to say that Shanghai is impressive as a city.

As far as setting up a new business entity in India, is it easy and inexpensive?

anallawalla




msg:797144
 10:09 am on May 14, 2004 (gmt 0)

I suggest that you start with a joint venture or subcontract with one of the fine SEOs you will find on WW. There are several who don't seem to post in this forum so you may have to go to the Commercial Forum or approach some whose posts you like. I use such a firm in Mumbai for my US and Aussie clients. I have met them in person, which is worth the trouble if you are thinking of a serious business relationship.

After you understand the dynamics (or lack thereof), you can decide whether you need to open your own entity in India.

gopi




msg:797145
 4:09 pm on May 14, 2004 (gmt 0)

Buddha , I dont think a foreigner (unless if you are of indian orgin!) can go and start a company in india just like that ...You have to clear many deparments including the reserve bank which may mean bribing some :).That too with the new left leaning government it will become tough in future also .

I beleive there is a single window foreign investment clearance office in delhi but unless if you are investing in high seven or eight digits i dont think its worth it . The best way as Ash suggested is partnering or subcontracting to a local indian firm! .

I know this sounds absurd to a western mind but its the way things work in bureaucratic socialist countries :)

vaniaul




msg:797146
 8:48 am on May 18, 2004 (gmt 0)

Buddha What you want exactly from these SEO firms. If u want I'll send you a list of some companies in INDIA. Wish you luck!

Buddha




msg:797147
 4:07 pm on May 21, 2004 (gmt 0)

Vaniaul,

I'm looking to outsource linking. If you know any companies that offer this service, SM me.

Thanks.

After thinking about it some more, I don't think it is worth it to set up shop overseas unless you have a really big operation. It's a lot easier to outsource for now.

I've worked with 2 people in India. One was a waste and another I still do business with.

asinah




msg:797148
 11:46 am on May 29, 2004 (gmt 0)

Hi,
Interesting subject.

I think to outsource to India would be my first option. We have outsourced so much already to India but I am using for the past one year Viet Nam and it works great. We outsource all our Chinese, Japanese, French, Spanish, German and Italian content to Viet Nam and we pay around 125 USD per person and it is a six days week for all of our staffs.

Most PHP, I still outsource to India. For anyone that is interested on outsourcing to China, you should do it via Hong Kong. Setup a HK company and it is simpler to enter the PRC market.

Buddha




msg:797149
 7:25 pm on Jun 2, 2004 (gmt 0)

Asinah,

Are there that many people in Vietnam that can write good content in so many different languages?

How did you find these people/or company?

asinah




msg:797150
 12:15 pm on Jun 4, 2004 (gmt 0)

I have part-time lectured in both Hanoi and HCM City. The National University of Viet Nam has around 100,000 students per year and they operate campuses all around Viet Nam. They graduate around 3500 students per year and a large number of Indian expats are based in Vietnam for traning the Vietnamese IT graduates.

I am also an adviser to a Technology Park outside HCM City so I have easy access to good staffs.

All our staff hold a Ba in Communications. In addition Japanese companies are entering Viet Nam in a fast pace compared to Western countries and a lot of graduates in Japanese are joining the market.

3 out of 7 staffs speak fluent Mandarin and their hometown are a few km away from the Chinese border. As Vietnam is a past French colony we have staffs that speak fluent French with 30 years experience).

German, Russian and Spanish is also well spoken as a large number of Southern Vietnamese returned to Vietnam from Europe.

I was very sceptical in the beginning about Viet Nam but I have found out that the highest loyality among Asian workers can be found in Vietnam.

A lot of red tape is around in Viet Nam but if you take things at a time without any pressure the results are very positive and our business is profitable and the Vietnamese are just great.

If their is a problem we contact directly the Ministry of Planing and Investment in HCM City and if things don't work we call MPI in Ha Noi.

iThink




msg:797151
 5:46 pm on Jun 9, 2004 (gmt 0)

Buddha , I dont think a foreigner (unless if you are of indian orgin!) can go and start a company in india just like that ...You have to clear many deparments including the reserve bank which may mean bribing some :).That too with the new left leaning government it will become tough in future also .

That was true till early to mid 1990s but is no longer true, particularly for any business related to IT that is not planning to sell any product or service in India. 100% export oriented business are in fact 100% tax free and I believe original poster was planning to start an entity only for serving clients in USA or clients outside India. There are a few law firms and chartered accountants in both Bombay and Bangalore that will incorporate your business and get all approvals for a one time charge of under $1000 and in less than 3 weeks.

There are several hundred small IT compnaies, targeting overseas business only, that are located in suburbs of Delhi, Bombay and Bangalore. They have 4-25 employees and many earn under a million dollars every year in net profits. Many of these companies are owned by Indians living in USA or Europe or by non-Indian individuals. Some are subsidiaries of small USA based companies. I am not telling this because I heard this from someone but because I have worked in such small companies in the past and now own one of such business of my own.

Does anyone have an idea how much it would cost to start a company with 10 people in India/China?
Let's say 1000 square feet office and 10 English speaking employees for basic SEO stuff. (no programming or skilled labor)

A 1000 square feet office costs around $40000 to $100000 in central Delhi depending on the location. Each web designer with 2 years of experience will cost $350 to $600, depending on skill-sets you want. I pay equivalent of $450 to one employee with solid knowledge of PHP/mySQL along with basic SEO skills and under $300 to link exchangers. Other major expense is on phone services (voice services) that are dirt cheap in India. DSL connections are still costly. I pay equivalent of $250 for a 512k/512k DSL connection but that cost is coming down quickly. Last year I was paying around $400 for the same DSL connection and last week I was approached by a new company offering 3mbps connection for around $140....and yes I am from New Delhi, India.

To those thinking about setting up their own unit in India to outsource SEO related work I also suggest that you start by outsourcing some work to any Indian SEO and then partner with them. It will save you time that you will have to spend for managing a business that is located in entirely different time zone.

Buddha




msg:797152
 1:28 am on Jun 11, 2004 (gmt 0)

iThink,

Thanks for the detailed info. It is really helpful to get feedback from someone with firsthand experience.

przero2




msg:797153
 4:54 am on Jun 12, 2004 (gmt 0)

A 1000 square feet office costs around $40000 to $100000 in central Delhi depending on the location

Are you sure it is that cheap .. Last time I was looking for space in a smaller city like Hyderabad (Jubilee Hills) and the cost was almost double what you quoted.

przero2




msg:797154
 4:56 am on Jun 12, 2004 (gmt 0)

I can speak for India as I have done some research into this. The most expensive city is Mumbai but you're also going to get a good level of education and Net-awareness there. I am biased, since I was educated there
A low-mid-range rent for a 4-person office is about US$125/month and salary is about $175/month. Rents in the CBD are a lot higher and not necessary for an SEO operation. If you plan to visit often, then you should choose suburbs that are easy to reach by train.

You can get an office space for $125/month in Mumbai .. was it a few decades ago!.

I was told Mumbai has the most expensive real estate in the World.

iThink




msg:797155
 3:27 pm on Jun 12, 2004 (gmt 0)

A 1000 square feet office costs around $40000 to $100000 in central Delhi depending on the location

Are you sure it is that cheap .. Last time I was looking for space in a smaller city like Hyderabad (Jubilee Hills) and the cost was almost double what you quoted.

We recently bought a 975 square feet office in a building located at a decent location in central Delhi for around $52000. Of course costs can be much higher depending on the location and the city but you don't have to buy/rent office in the costliest location. You just have to see that the place is easy to reach for employees, broadband connection should be available there at low cost etc.

gopi




msg:797156
 1:12 pm on Jun 15, 2004 (gmt 0)

Great Post Puneet , really useful!

aravindgp




msg:797157
 1:34 pm on Jun 15, 2004 (gmt 0)

Hyderabad,

Since I am based here ,I can speak for it.You can start a business operation in Hyderabad with about 2000$ for Infrastructure and office space.

Jublie Hills is little costly, however you can setup office and run the office With STPI (Software Technology Parks of India Govt of India setup) these offices are excellent, you can check the website here www.stph.net(official site), for 2000$, yes completely.

25% of IITians are Selected from Hyderabad , the techies from Hyderabad are very sought after, perhaps it's the only place you can hire a J2EE programmer for about 200$ a month.Almost all the Master of Computer Applications students are qualified to work in SEO operation and can do some kind of programming, they work for anywhere between 200$ to 350$ per month.

Lingo to negotiate:
1."Monthly Salary".( For recruiting employees)
2."Square yard" for Office Space.
3.Call forwarding and Phone Lines.May be directly dealing with BSNL or STPI itself for this would be better.

Hope this helps
Aravind

przero2




msg:797158
 12:08 am on Jun 17, 2004 (gmt 0)

Jublie Hills is little costly, however you can setup office and run the office With STPI (Software Technology Parks of India Govt of India setup) these offices are excellent, you can check the website here www.stph.net(official site), for 2000$, yes completely.

Is that per person per month charge not including salaries?. Can you sticky th exact URL where it states $2000 .. If it is a one time cost, I want to sure grab as much as I can:)

anallawalla




msg:797159
 12:44 am on Jun 17, 2004 (gmt 0)

You can get an office space for $125/month in Mumbai .. was it a few decades ago!.

That is what a fellow WW member is paying right now. I didn't ask what size and what is/isn't included. But you're right. Looking at a real estate site, I see office space at:

Mumbai:
Santa Cruz East, 4000 sq ft = US$4420/mth
Nana Chowk, 715 sq ft = US$1750/mth
Andheri West, 325 sq ft = US$375
Girgaum, 550 sq ft = US$442/mth

New Delhi:
Vikas Marg, 1000 sq ft = US$600/mth
Munirka, 100 sq ft = US$14,470/mth

Hyderabad:
Abids, 2200 sq ft = US$730/mth

Frankly, a joint venture would be the safest first step.

przero2




msg:797160
 12:56 am on Jun 17, 2004 (gmt 0)

Those numbers from the real estate site seems to be realistic .. can you sticky the site .. Thanks.

Chira




msg:797161
 11:23 am on Jun 22, 2004 (gmt 0)

Setting up shop in India Is no longer as time consuming and complicated as it used to be. You could set up a company in India within 15-20 days. Other formalities could be completed within another 15-20 days.Skilled manpower and lower costs are definately an attraction -whatever the Industry.
However it must be remembered that comming to India is the easy part-It is going out that is complicated.It would take you more than a year to wind up your operations in India. Therefore the decision to set up shop in India should not be taken in haste but only after being sure of a long term presence.

guoqi




msg:797162
 7:46 am on Jun 27, 2004 (gmt 0)

Buddha

Outsourcing might be a good option, but if you really like to set up a company in China or India which might give you a opportunities to accept outsourcing orders from Europe and America, I don't know about India, but I know a little about China since I am a Chinese.

1. Estabilish a partnership with a Chinese company or Chinese citizen might be a good option.

You can not expect those government officials to speak English. There are a special group of Chinese people who can enjoy great support from Chinese government. In China, we call those people "hai gui", "hai gui" means those Chinese people who holds an European or American university degree.

If you find a good person, setting up a company in China is a very simple task. You don't even need to have initial capital.

2. The business rules in China have been changed a lot. Do business over a dinner might still a little right, but I do not think that will still be right in the near future. I have seen some big changes in business culture in the past a few years.

3. Chinese government really welcome western investment, in every city, there is a special department dealing with foreign companies. You can give them a try to see how their response is.

KevinRASP




msg:797163
 1:39 am on Jul 31, 2004 (gmt 0)

Does anyone have knowledge of labor rates for financial types? I'm looking to set up an anlytic service provider operation in India and will be looking for college grads with a degree in finance, economics, or something related with a couple of years work experience.

Thank you

dhaliwal




msg:797164
 6:27 am on Jul 31, 2004 (gmt 0)

Its quite easy to setup the office in india and i think the things are very costly if you go in Urban Circles in Major Cities, And even if you go in the Sub Urbs, the office costs are very much higher.

I know about the major places in Mumbai and Delhi which will cost you same for the office rent and space as it would be in USA or UK.

But in case you are outsourcing, you don't need to be in the major market place, you can even locate your office at 5 Miles out of city where you could have minimal office costs.

The Employee Wages is a Big Plus compared to programmers in UK and US.

And the Government Procedures are quite simple in case you partner with some local entity, and take the seat of the Investors, While it will be troublesome if you want to run your company under your own name as the new government won't allow you to outsource without getting proper permissions and license to employ people to work in your company.

I hope it helps, and in case you need to know more, SM me.

Dhaliwal

gopi




msg:797165
 6:58 am on Jul 31, 2004 (gmt 0)

>> Does anyone have knowledge of labor rates for financial types?

I beleive finance grads with a Bcom or BA (economics) with 2-3 years expirence may cost around $200-250/month .If you are looking for chartered accountant types they may cost around $300-400/month

I am out of india for some years so i am basically guestimating the above! ...

Also one thing is unlike engineering and medicine , business/finance education in India is of slightly lower quality (compared to US) , so you have to weed thro many many canditates!.

web_india




msg:797166
 9:33 am on Jul 31, 2004 (gmt 0)

>> I am out of india for some years so i am basically guestimating the above

gopi, you may be out of India but your guess is right ;-)

KevinRASP, it's generally in the range of $250 but yes, as gopi points out, if you need to go for slightly better ones with experience, then you should plan for above $400, I think

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