What business to open in India. Legal and legal aspects. Disadvantages of Indian Economy

21.09.2019

Opening your own business in India is difficult due to... great competition. But if you have a goal, a smart business idea and persistence, anything is possible. BusinessTimes publishes the main background information for those who are just thinking about such a difficult step.

Owning your own business in India is a very bold decision. There is no doubt that those who dare to at least try, in each specific case have their own, deeply personal reasons for emigrating to India. There is also no doubt that in a country of 1.2 billion people - India is the second largest country in the world - starting your own business is very difficult. You need experience, knowledge, patience and a little luck - and, of course, a good business plan.

Any physical or entity, including non-residents of India, can establish their own company there. The organizational and legal form of company registration can be open or closed, and the most popular types of registered companies among foreigners are the following:

— Limited company — a limited liability company, can be open or closed ; the minimum authorized capital for a closed limited liability company is 2 thousand US dollars;

— Representative Office - a representative office of a foreign company that can only provide information services for the parent company

— Project Office — an enterprise for a specific project in India;

— Branch is a branch of a foreign company that can provide representation services for the parent company, sell goods and services in India, and engage in export-import operations. A branch of a foreign company cannot engage in trade or production in India on its own behalf, and to register this type of enterprise it is necessary to obtain registration from the Reserve Bank of India.

Practice shows that a limited liability company is the most popular form of enterprise organization in India among foreigners. In this case, you are the full owner of the company. If we are talking about joint stock company— small business in India begins its work with seven or more shareholders, maximum amount shareholders are not limited.

The already mentioned Reserve Bank of India, together with local Company Registration Bureaus, carry out direct registration after submitting the relevant documents. In order to register a company, prerequisite is the presence of an office located in India, in the state of registration. The registration procedure is determined by the Indian company law - The Companies Act. According to it, your first step in starting your own business in India is to obtain an Identification Number (IDN) and a Digital Signature Certificate for Proposed Directors (DSC).

After you are issued an IND, you will need to contact the Registration Office of Companies (ROC), where you will need to confirm your identity, present documents for opening a company (Charter of the company, Memorandum of the company) and a business plan. The registration office must issue you a final certificate of assignment and registration of the company name.

Once you receive the company registration certificate, you will need to inform the Reserve Bank of India and open a foreign exchange account with an Indian bank. If your company is registered in the form limited liability, the tax will be 36.59%, but if you opened a branch of a foreign company - 41.82% of all profits. Registration of annual income statement of a company is mandatory in India. The company can be managed either by the director himself or by the board of directors, depending on the form of ownership.

Despite some of the peculiarities of India, our compatriots have long chosen it, in particular the state of Goa, as their residence during the holiday season. Many went further and even opened their own businesses. Anton Tarasov talks about his restaurant.

Disadvantages of Indian Economy

There are also tangible disadvantages in India that hinder the development of the state. Firstly, the country is very dependent on imported raw materials, and there is a shortage of electricity. Secondly, road transport is insufficiently developed; it is impossible to get to some areas of India, for example, during the rainy season, but in some places it can last up to four months in a row. Due to the fact that most of the population is below the poverty line, the state has to help people with various subsidies and benefits, which also negatively affects economic situation. In India, numerous bureaucratic barriers prevent businesses from fully developing. Despite the fact that a large percentage of the population is unemployed, people from Nepal, Pakistan, and Bangladesh still come to India, ready to work for less money, but at the same time more and of better quality than the local population. Of course, businessmen meet them, which also does not contribute to the enrichment of the country’s indigenous population.

Today, India ranks 12th in terms of economic development in the world. The government is making every effort to make the country rise higher.

Today, India ranks 12th in terms of economic development in the world. The government is making every effort to make the country rise higher. Free is introduced here school education, children from low-income families are provided with books, uniforms, and food at school. Grants are allocated for studying at universities, which are increasing every year. Experts from other countries are actively attracted to India - here is collected great amount talented programmers and developers, new companies are opening, the government is ready to pay them and create the most Better conditions for work. The country's population is growing every year, and today, according to rough estimates, it is one billion three hundred million people. However, in India there are no policies that would affect childbearing, as, for example, in China, where the problem of a growing population was solved radically. The Indian government believes that becoming like the Chinese will not benefit the country, and young workers will always be at a premium when more factories begin to open. Here they are trying with all their might to unite the population and prevent strife, which is why Hindus, Muslims and representatives of other religions coexist quite peacefully in India, although 50 years ago conflicts broke out on this basis from time to time. The Government of India and the people of the country are confident that the path to a bright future is a friendly, united and large nation.

Restaurant in Goa

“I fell in love with Goa at first sight,” says Anton Tarasov- when I got here six years ago. I came on a regular vacation, and on a voucher, to some expensive hotel. Six months later, my wife and I returned here as savages, and when the vacation came to an end, we realized that we did not want to fly to Moscow at all. I know that many compatriots live here, renting apartments in Russia, this money is enough for them, and occasionally they do some kind of work. But I am an active person, and this option is not for me. A small advertising business remained in Moscow, and I began to think about what I could do in Goa on a permanent basis. The idea of a restaurant came to my wife, but at the time it seemed absurd to me - I’m only familiar with catering establishments as a client, how can I open something worthy, I thought. However, on our next visit, we seriously discussed this idea with the Indians and Russians living here. Compatriots frightened me, but the indigenous people, on the contrary, inspired me. A year and a half later, we lived in Goa, and we already had our own restaurant near the coast.

You won’t earn much with our business, but it’s enough to live in India and make modest trips with backpacks on your back!

To be honest, this took quite a lot of effort: India is a bureaucratic country, and this especially applies to the resort area. There are always enough hunters to profit from newly minted businessmen. For example, all licenses are issued, everything is done according to the law, but the police continue to come to you every day, hoping to get a bribe. No way, just like that. The locals advised me to be tougher with him and, no matter how mentally difficult it was for me, it helped.

We rented a ready-made restaurant; building it ourselves is very expensive. A foreigner must rent land, since he has no right to buy it. A small piece of land for a catering business, located near the ocean, costs up to 10 thousand dollars for the season, which lasts from October to June.

We live here on tourist visas, which we extend, but I’m trying to open a working one. After all, we could work on it ourselves. And now there should be local residents behind the bar, in the hall and in the kitchen, and we only control the process. The same goes for accounting - I do it inside and out, and the papers are signed by an Indian who is officially listed as our accountant. We have to pay him a salary, but he appears once a month and signs.

Here, under no circumstances should you enter into conflicts, since the police will never be on the side of a foreigner, even if he is the victim. You shouldn’t go against the rules - if music is prohibited after 11 pm, then you need to come to terms with it, and not try to turn it on in spite of everything, as some do. However, you can always come to an agreement with the local police - sometimes drinks and dinner are enough, and sometimes we offer something more substantial.

For three summer months it rains heavily here, exotic representatives of the local fauna crawl ashore, and therefore there is no way to stay, even the locals leave. Usually we put our things in a specially rented room and leave the restaurant. Sometimes we go to Moscow, other times we travel around Asia. You won’t earn much from our business, but it’s enough to live in India and make modest trips with backpacks on your back! I have plans to open a small motel in the Himalayas, but that’s in the future.”

India is a country with 1.32 billion people in 2017. It is an agrarian-industrial state with developed industry. It ranks third in the world in terms of GDP and has a fairly developed infrastructure. Despite the above facts, there is a high level of unemployment here, which determines the availability of cheap labor. This is attractive to foreign businessmen. But organizing your own business in this country is not so easy. We will analyze all the necessary data in detail.

Features of running your own business in India

Before investing in local companies, you should consider some features of doing business in India:

Great competition is associated with a considerable number of foreign businessmen in the country and the willingness of people to work for a minimum wage.
The high level of lack of education makes it difficult to find specialists. This also led to the creation of an education tax.
The unemployment rate for 2017 is 6%, which leads to the emergence of cheap labor.
The principle of division of labor applies here.
The unspoken division of the population into castes remained, although it was officially abolished in 1950.
Distributed a large number of active languages: more than 14 official and 300 minor.
There are more than 7 types of religions in the country.
Corruption is highly developed in all government structures.

All of the above features must be taken into account when setting up your business in India. They present some difficulties for foreigners. But one cannot help but notice that the government, for its part, promotes the development of entrepreneurship. There has been a reduction in taxes, easing of trade restrictions and simplification official registration companies. But before thinking about organizing a business in a given country, a foreigner must obtain documents that allow him to be here and conduct activities in the country.

Business Immigration Plan to India

To work in a local organization, it is enough to obtain a work visa. But when opening your own business here, you should think about obtaining a residence permit. Immigration can occur through obtaining a permanent or temporary residence permit.

Temporaryvalid for 12 months, after which it requires renewal. This is the first stage of immigration and obtaining permanent resident status. It can be given in connection with working in the country, marriage, intention to study, or starting your own business. When you first apply for a residence permit, a temporary permit is granted.
Constanttheoretically has no validity period, but in practice also requires renewal after 5–10 years. After living in the state for a year, you can expect to receive permanent type for residence. It does not equate a foreigner with the status of a citizen, but gives more opportunities. You can extend your residence permit an unlimited number of times.

Obtaining Indian citizenship is almost impossible. This is due to the overpopulation of the country. But such cases still occur. To do this, you must go through the previous 2 stages and live in the country for at least 10 years.

We are considering immigration to India as part of opening our own business. To arrive in the country for this purpose and obtain a residence permit, you must contact the Department of Migration Affairs and submit a number of documents:

a valid passport with a visa;
photographs 3x4, 4 pieces;
a certificate of a bank account containing at least 2.5 thousand US dollars;
certificate of no criminal record;
documentary evidence of housing availability;
a written statement of further intentions regarding residence (permanent residence or citizenship).

All documents must be translated or written in English or Hindi. Consideration of the issue of issuing a residence permit occurs within 1 month after submission of documents. The cost of the procedure will be 200–480 dollars.

If you indicate starting your own business as the reason for obtaining a residence permit, you will need to provide a viable business plan. When obtaining permanent residence, you must meet several more conditions:

live in the country for 5 years on the basis of a residence permit;
not have any offenses or conflicts with legal structures during this time;
confirm the usefulness of the activity;
have good results in testing, which includes an exam on knowledge of English, Hindi, history, laws and traditions of the country.

When applying for permanent resident status, the application is processed within 2-3 months.

Business culture of India

When running your own business here, you will have to cooperate with residents of the country from different classes. To do this, you need to know the business culture of India.

Hindus are extremely respectful of the traditions of their people. Here in practice it is still preserved caste system. Therefore, it is useful to know what class of people you will have to deal with to avoid awkwardness. Also be mindful of the holidays. It is advisable to study them so that the scheduled meetings do not coincide with days of complete inactivity in the country due to holiday events.

About the negotiations. Indians are polite and patient people. Accordingly, they expect the same from foreign partners. They don't like hasty decisions. Therefore, you need to make an appointment a month before the expected event, and check a few days in advance whether it will take place. They cannot be called punctual and they take it easy when they are late, but on your part it is better to arrive at meetings on time.

When meeting people, it is also customary to shake hands and exchange business cards. It is better that it is written in English on one side and duplicated in Hindi on the other. By doing this you will show respect for their culture.

Cloth. India is a hot country. In the summer, the temperature here rises to 50 degrees Celsius, and lasts quite a long time. Due to high humidity, this temperature is even more difficult for foreigners to tolerate. Despite this, it is necessary to adhere to the dress code: business suits for men, saris or business suits with a skirt or trousers for women. Choose lightweight natural fabrics to feel freer.

Hindus do not like fuss and hasty decisions. Therefore, the first meeting can take place without discussing business issues. It is important for them to get to know the person, and first of all to establish social contact, and then start business.

Be open, friendly and patient. These are the main qualities of Indians that will help you win their trust.

Forms of business in India

This state is the 5th largest market retail in the world. Therefore, it attracts businessmen with different countries open companies related to trade or tourism activities. In the field of these and other services, there are 4 forms of business in India:

LLC or Limited company. It means limited liability of company members for its debts. It may be limited by the number of shares or invested capital. This is the most common type of organization. The founders can be several people or one. For authorized capital 2 thousand dollars is enough. Income tax for Limited company is 36.59%.
Joint-Stock Company can be organized only if there are at least seven founders. Public company may issue shares only if the paid-up capital is more than $400,000.
Branch of a foreign company or Branch . The second most common form of business. This is a representative office of a foreign company, which has the right to engage only in export-import matters. In order to independently produce and sell products, you need to go through the registration procedure with the Reserve Bank of India. The tax is 41.82% of profits.
Simple representation or Representative office . Another form aimed at a foreign company. This is an office that can only do information Services in favor of the main company.
Project Office . A corporation organized for joint activities foreign company and the Indian government. Typically, a project is proposed by the government and implemented jointly.

Conducting and organizing a small business in India is regulated by a legal act – The Companies Act.

Small Business Taxes in India

In addition to the above-mentioned income taxes related to a certain form of organization, companies are required to pay some other fees:

Mandatory contributions to the treasury for small businesses are regulated by local authorities, representatives of state and central governments.

The tax year begins on April 1 and runs through March 31. Reporting documentation must be submitted by September 30. Taxes are paid on the 15th of each quarter in June, September, December, March.

When filing an annual return, a fee is required to be collected, which is Rs.500.

How to open a business in India

To open your own business here, you first need to get approval from the government. To achieve this, a viable and profitable business plan is provided. The activities of an entrepreneur must necessarily be useful for the state, and first of all, contribute to solving the problem of unemployment. After receiving a positive response from the authorities and registration work visa for a year, several more steps are required to register a company. Need to get:

company board identification number (DIN) (7 days);
digital signature certificate from the central licensing authority (7 days);
Confirmation from the ROC Registrar of Companies on the assignment of the name by submitting a business plan and application for registration of the name (5-10 days);
certificate of final registration of the company in the Register of Enterprises (7–14 days);
business license (30 days).

And:

register with the tax service;
create an account with the Reserve Bank of India.

In general, registering a business in India can take anywhere from a few months to 2 years. Therefore, those who want to speed up the process can use the services of local law firms. This will help reduce the time required to complete all registration procedures to 1–2 months. The task of these agencies is to correct design, submission of documents and quick registration of the enterprise.

To start working with such organizations, you need to translate all required documents into English language and assure them at the Indian Embassy in Russia. The cost of such services is quite high and amounts to 3–4 thousand dollars. But they greatly simplify the registration process. Do not forget that India has a very high level of corruption, as a result of which it will be easier for local residents to deal with government authorities in difficult situations.

Business in India for foreigners and Russians

In view of high level unemployment in the country, the attitude towards foreign investors is extremely positive both from the government and from the population. Business here is quite attractive for foreigners and has many positive aspects. But there are also some peculiarities.

The first thing to remember is that a foreigner cannot own more than 49% of a company established in India. For this reason, a foreign businessman needs to find a reliable local partner.

This rule does not apply to branches of companies whose head office is located in another country, simple representative offices and project offices.

A foreigner must first obtain a work visa, government permission to build a business, and then he can register a company according to the rules described above.

When working with Indians, it is necessary to take into account the cultural characteristics of the country. In this regard, many entrepreneurs face difficulties, since the difference in cultures is very large. For example, family is much more important to an Indian than any job, and he may neglect some responsibilities in the company to fulfill household obligations. In general, being information savvy, it will not be difficult for a foreigner to build a business in India.

How to invest in India

India is an excellent investment option. There is high economic growth, rapid development of the consumer market, reliable financial system. The government favors foreign direct investment and has made several changes at the legal level:

lowered the rate on capital gains to 20%;
canceled the ban on the use of a foreign trademark;
enacted a law allowing large foreign companies to open stores in the state's cities;
eliminated the tax on export income.

In theory, investing in India is simple. But in reality there are pitfalls. The main thing is deep corruption. This factor will add a considerable amount when making an investment. Then comes a lot of paperwork: the registration of branches will take quite a long time. And pay attention to the lack of qualified specialists in the labor market.

To date, several large investor companies, such as Ikea and Wal-Mart, have abandoned their intentions due to the difficulty of establishing contact with all government agencies in India.

However, investing in a given country through the organization of company branches remains popular and profitable.

How to buy a business in India

No less common is the question of buying a ready-made business here. Not all entrepreneurs want to start over and set up their company from scratch. They go the other way, acquiring an existing business.

For this, a foreigner will also need a work visa and government approval to conduct business. The sale transaction is completed in the presence of lawyers, re-registration of documents is carried out with the participation of the ROC, the tax department and the Reserve Bank of India.

Hindus are honest and open people. Therefore, buying ready business from a native, don't expect any trouble. However, they are reluctant to part with money (and, accordingly, profitable enterprises). Consequently, they love to haggle and are good at increasing the price during the negotiation process.

And also keep in mind that Indians are a people who do not like hasty decisions, which means the deal may drag on for a considerable amount of time. It is better to hire a local specialist for your part to resolve all issues regarding the purchase of a ready-made business.

Where to look for a seller

In addition to direct contact - an advertisement on the street or through third parties - a ready-made business can be found on online platforms, contact the seller and purchase a profitable business.

Well-known sites in Russia are:

jjc.ru;
napartner.ru;
businessesforsale.ru.

But please note that buying a business through online sites is a dubious act. It is better to find a person who is ready to sell his business on the recommendation of a third party.

How to sell a business in India

If you have already tried your hand at the Indian market and are thinking about how to sell a business here, do not panic - it is not difficult. If the business is profitable, then there will be demand for it mainly among foreign investors. You can also post your offer on the platforms described above.

The selling procedure is the same as purchasing. It is necessary to draw up and sign a purchase and sale agreement in the presence of lawyers. Further re-registration of documents lies on the shoulders of the buyer.

Summarize

Organizing your own business in India for a foreigner is profitable and simple. The only difficulty that arises is understanding the mentality and attitude local residents to work.

In comparison with the Russian business model, there are many differences both in the paperwork and rules of operation of the enterprise, and in the attitude of employees to work and negotiations.

In general, it will be easier to open and run your own business in India than in Russia. But it also has its own characteristics and pitfalls.

Goa is the smallest and most popular state in India. More and more of our compatriots want to not only spend an unforgettable vacation on the shores of the Arabian Sea, enjoying unforgettable sunsets and all the accessible joys of the legendary state, but want to spend the whole winter here.

Those who are especially brave and determined completely erase the noise and artificial life of megacities from their lives forever and call their newfound paradise on earth with a short word - GOA. But, as one of the heroes said about Goa fashion film"Boomer 2", money is needed even in paradise.

How to make money in paradise?
Observing the so-called “Russian Goa,” one gets the impression that our enterprising fellow citizens, who have experienced various economic crises, find it even easier to do business in the fertile land of India than in their homeland. Economic indicators of business profitability turn out to be more effective, including due to the fact that the general costs of doing business, as well as expenses for food, rental housing, and medical care in India are several times, and sometimes even tens of times, cheaper than in Russia.

So, what do enterprising fellow citizens do in Goa? Owners of substantial capital have nothing to worry about, since the not very developed tourism infrastructure in Goa opens up great opportunities for opening new hotels, restaurants and entertainment complexes. But even with a small investment, it is quite possible to open a profitable business in Goa. For example, a private kindergarten.

In Goa, many tourists vacation with families, including those with small children. The services of nannies are in great demand, and many Indian women are happy to work as nannies in Russian families. However, many mothers and fathers would like their children, in addition to care, to have the opportunity to participate in educational games, learn languages, communicate with peers, and receive familiar European children's food. An important factor is also the opportunity to leave the child overnight and be sure of his safety, because in Goa there are so many temptations for mothers and fathers different ages. And this is where private kindergartens with qualified personnel come to the rescue, the supply of which in Goa clearly does not keep up with demand.

What expenses does opening entail? kindergarten and what is the profitability of this business? Let's look at the example of a small kindergarten that can serve about 10 small clients. A traditional villa in Goa consists of two spacious bedrooms, which, with the right selection of furniture, can accommodate up to 10 children overnight, a kitchen, a spacious living room-dining room and an adjacent area, which is used for educational games and activities. fresh air. The cost of renting such a villa (subject to long-term rental) will be 400 - 500 US dollars per month of rent, that is, about 3,000 US dollars for six months of the high season from October to March.

The cost of serving one child per day in private kindergartens in Goa is 15-20 dollars per day with meals, that is, 29,000 US dollars, subject to full occupancy for five months of the high season (during the New Year and Christmas holidays, the cost of service is usually in twice as high).

The cost of feeding one child per day will be no more than $4 per day, that is, $5,800 for five months of the high season. As a rule, private kindergartens for a small number of children are family businesses, without hiring hired labor. If you have no desire to work at your own enterprise, then you need to take into account the costs of paying staff - from 300 US dollars per month for one employee.

As a rule, there are no expenses for advertising a private kindergarten in Goa. Advertising is passed on by word of mouth among residents of Goa, and such unsophisticated marketing techniques as advertising on various advertising spaces such as poles and notice boards in a minimarket or cafe are also used.

Obtaining permits is both a complex and simple issue. On the one hand, in India the bureaucratic machine works hard and slowly, on the other hand, the corruption of local officials and the low rates of “baksheesh” remove obstacles to the noble goal of legitimate business in India. However, according to the same scheme, obstacles are eliminated even if the necessary permits you still haven’t completed the registration and the time has come to explain this matter to local officials (which, however, may not happen).

Serious barriers to implementation commercial activities Migration services can repair this if newly minted businessmen stay in Goa on a tourist visa, which excludes any other purpose of stay in the country other than tourism. Therefore, it is necessary to make every effort and obtain a business visa, with which Indian lawyers or Russian agencies will be happy to help.

Business in Goa is seasonal; from May to October there are very few tourists in Goa, and even those who live here permanently tend to spend the rainy season in more favorable conditions. climatic conditions, for example, in neighboring Nepal. However, taking into account the above figures, the profitability of the business is quite high. The already low prices of living in Goa are reduced threefold during the rainy season, which allows us to say that Goa is a paradise on earth for businessmen.

Alexander Bachmann - about entering the Indian market.

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Alexander Bachmann

A company's entry into the international market is an excellent opportunity to send warm greetings to your competitors, showing how strong your company's position is.

Such an information feed is always beautiful and practically a win-win in terms of influence on reputation. But the volume of previous and then accompanying work is gigantic. Obviously, it is impossible to avoid everything by reading one or two materials from business representatives with experience in international development.

The task is completely different. Talk about what you should prepare for and how to avoid mistakes at the planning stage. I will tell you about my experience of doing business in India, where Admitad has had a local representative office for several years.

What business should you open in India?

It makes sense to start an IT related business in India. India is an ideal location for companies planning international expansion. If any IT company plans to expand abroad, then India is an ideal place to train and hone their skills.

In India there are many clones and analogues of Western online stores: huge supermarkets, online hypermarkets, there are local analogues of Amazon, Flipkart, Snapdeal, ShopClues, payment systems, ordering food, tickets. That is, almost everything that exists in India is not a local invention, but something that came from somewhere either with its own investments or with its own ideas, but it’s all about digital.

When starting a business in India, one must take into account that Indians do not have money. This is completely foreign capital. Another thing is that now, when a company has existed for a certain number of years (three to five) and shows stable growth, then some American or Asian company will definitely join this company and offer to invest even more money in them.

But initially it must be your own money. You have to be prepared for the fact that you will do everything with your own money. Moreover, you can find a partner who wants to help, but he will provide any support, just not financial.

Legal and Legal Aspects

The process of preparing documents for opening a company in India is quite labor-intensive, and cannot be done on your own. There are a lot of nuances in the local market that are incomprehensible to neither Europeans nor people from other countries.

When you choose a company that would start consulting on the legalization of documents, various taxation systems, and so on, two companies doing the same thing will offer a price tag that differs significantly. For one it could be, for example, a million rupees, and for another it could be five million.

But the most important thing is that it is impossible to understand all the tax complexities and legislation on your own. You need to hire lawyers and study everything closely with them. It took us about three months of daily communication before we finally started the paperwork process.

Then about another month of registration and that’s it - achievement unlocked - you have a company, you have an account, you can work, receive money and then do something with it. On paper, everything is smooth, because I deliberately omit many legal and financial aspects that a specialist should talk about. And this is definitely a separate topic. And very big.

Office search

There is a place in India - the city of Gurgaon, also known as Gurugram. This is a city whose name changes every three years. It is located near Delhi. And historically, this city is the mecca of all Western companies.

If you are starting expansion into India, you should go to Gurugram because most of the people who work there are IT employees. You can also find staff there, usually local ones. There are also expats, but in most cases they stay in their companies and do not plan to leave anywhere. If you want, start from Gurugram - it is both cheap and effective, this is the right decision.

Gurgaon

It’s another matter if we are talking about such a component as sales. Mumbai (formerly Bombay) is suitable for these purposes. A lot of agencies with which advertisers have contracts are located in Mumbai. Therefore, if you need large, powerful advertisers, then you cannot do without constant business trips to Mumbai for a week or a month.

If a company wants to develop its business, then it would be a good idea to have a sales department in Mumbai. But it costs much more: there is luxury real estate and Bollywood stars. You can maintain an office of 30 people in Gurugram and with the same money you can maintain a team of five people in Mumbai.

But on the other hand, Mumbai is profitable if you have sales there. I can confirm with our example that a lot of money is spent on sending people on business trips. But due to the specifics and the fact that we are still an affiliate, it is a little easier for us to work with agencies, so there is no need to have sales in Mumbai.

We tried to develop a scheme in which we would have a remote sales department there, but after looking at a large number of people, we realized that people want so much money that it’s easier to fly there.

It is better to look for an office through the main players who are engaged in the construction and delivery of real estate for such purposes - for the needs of companies entering the local market.

These are one or two groups of developers. If you need an office, you turn to either one or the other. The difficulties begin when you come to look at the office, discuss it, explain what you want, how it should look, and they give you a deadline. You can immediately add six months to these deadlines, and after this time the office will be ready. But this is connected not only with the construction of the office, it is also connected with the Indians’ understanding of deadlines.

There is also a secondary one. You can move into the secondary building at any time. But most of what is on the secondary market is unacceptable. The conditions there are the wildest: anthills, where you can accommodate 30 people per 40 m². Therefore, if you want a person to come to the office and say “wow” because the tables are at least one and a half meters from each other, then you need to build a new office.

You can, of course, rent an office from where a company of 30 Indians will move out to 40 square meters, and seat five people on the same 40 square meters. But, as a rule, most people, when they come to a country, do something of their own. This is an indicator of business development; all companies are moving into newly built offices.

Hiring employees

Now the search for employees begins. Initially, our task was to find the head of the local office. We didn't know the people or the recruiters. We had one recommendation from another company with Russian employees who are already in India.

They recommended a recruiting agency and they later advised us of adequate lawyers. Through a recruiting agency, we began searching for a manager and at the same time we were looking for ourselves. It is impossible to do this on your own, because you need to process incoming resumes 24 hours a day.

Eight out of ten Indians have a couple of MBA degrees, but you start talking to them and realize that their English is at the same level primary school. And it has nothing to do with a degree or qualification. It's just some kind of certificate that every pizza delivery person can get from them.

Only recommendations work, because you will definitely mess things up if you search and check it yourself. We first turned to a recruiting agency, which we found in the search results. Both the conditions and quality were much worse compared to the agency that was recommended to us, and the price tag was much higher.

Perhaps if you come on a recommendation from someone, the conditions for you will be somewhat softer than if you come from the street. The specificity of this market is such that if there is no local person there, then despite the fact that you seem to be a sahib in status, everyone will try to promote you for money.

Having looked at the first ten candidates who asked, roughly speaking, 500 thousand rupees a month, you think: “Well, that means this is adequate money, it’s worth taking.” But then you start looking through recruiting agencies, they already filter through themselves, and you understand that average salary for this position - 200 thousand rupees. You can do everything on your own, but it will be much more expensive, and it’s not a fact that it will be great and you won’t have to redo it later.

When talking about the level of customer service, you need to understand that everyone has the same interest. You look for an agency on your own, you call, they are ready to help you, come out, arrange it, take a look. And those agents who are recommended to you are ready to do the same. The difference is money.

When the stage of hiring a manager has been completed, the search for employees begins. Initially, we had the idea to hire employees from other partner networks, that is, with experience. It is not necessary to lure away.

Although in India everything is tied to castes, ties and friendships. If a person joins a company, then regardless of his level and rank, he can recruit at least five more people. That is, you hire a director, he already brings you the head of the department and various managers.

The idea of hiring employees with existing experience turned out to be unworkable. Because it is very difficult for Indians to retrain. If a person had previously worked for three years in another network and even if he held some kind of good position, but dealt only with the tools of a paid platform for servicing affiliates (if you want to create an affiliate, buy a module from us and work), then it is catastrophically difficult for him to relearn.

After we hired the first part of the employees, we tried to hire employees without experience, and they learned much faster. They are young, that’s another thing. Average age, if we are talking about Admitad in Europe, up to 30 years.

In India it's a little over 30 years. Subsequently, of course, we figured out how to retrain employees who had experience working in other networks, but from experience I can say that we saw the first results only a year later.

Features of mentality

A lot is tied to mentality, to the same castes. Some don’t want to work with someone, some don’t like something, some castes have holidays all the time, some don’t. There are a lot of difficulties, but the main thing that began to bother me from the very beginning was their lack of punctuality.

This is when you make an appointment at 13:00, come at 12:45 and wait until 13:30, call, and they say to you: “Why did you come so early?” And this is a universal story. The same goes for any reports, letters, deadlines. They tell you: “Yes, of course, today we will send you everything,” and you set aside another three or four days to receive an answer. This national custom whether.

Intimidation only works if you initially position yourself as a terrible, punishing leader. But there is still a small nuance. Let's say jobs (vacancies). In India, it is still very difficult to find work, and therefore there are positions such as a person who presses the floor button in an elevator in mall and receives two thousand rupees per month.

There is a man who guards the bus stop, sits on a chair next to him for a thousand rupees a month. As soon as you publish a vacancy, you will immediately receive a million responses. But filtering them is very difficult; it takes a lot of time and effort.

It is imperative to create super-detailed step-by-step manuals for employees on any action. If your system differs even 1% from what they had to work with, you must describe everything in detail: click on the “Login” button, enter such and such characters into the URL line, we get there. And such detailed manuals are needed for everyone - both for managers and ordinary employees.

An interesting Indian factor also comes into play here. Indians are very smart, but they have one important feature - they do not exclude the possibility that anything is possible. The difference, however, between stupidity and non-exception, that everything is possible, is huge, the main thing is not to confuse it.

For example, you come to the office in the morning, put a bucket of manure, and say: “Guys, if everyone now smears this manure on their hands, then when you click on the mouse and keyboard, your conversion across all channels will increase by 10%.” And they will do it. Not because they are stupid. But because they admit the possibility that this is really the case. And when communicating with Indians, you need to start from this.

Because you didn’t describe step by step what to do and how to do it, there will be inaccuracies. As soon as the opportunity arises to do something differently (since the correct algorithm is not described in the document), the employee will do so. 99% that it will be done incorrectly. Or it will be done incompletely, with some important points missing.

For example, for an Indian, launching a campaign means going to a meeting, reaching an agreement, and that’s it. He already launched it in his head at a meeting after he was told: “Yes, let’s do it.” Such things as concluding an agreement, setting up an account, integrating, then doing many more tests, some kind of newsletter - they do not understand this.

Often, when you ask: “Why did you do that?”, an Indian answers you: “I thought it was better this way” or “I thought it was possible.” An analogy can be drawn with the behavior of children. And it is not he who is to blame, but you. You didn’t clearly say that it should be done this way and not another, but this should not be done under any circumstances.

There is another nuance. As soon as the Indians get some new information and see that it is useful, they want to create something similar themselves. Therefore, some of them may fall off immediately. You need to be prepared for this.

You plan that you will work with these people, this will be yours CEO, and after six months they leave and start doing something of their own. Two of the five employees who were with us from the very beginning left after six months, and each of them opened their own affiliate network.

But these employees are not doing well. This leads to the next question - the specifics of the work of all Indian Internet projects without external investment. They are ready to earn little if it is a stable income. The most important thing for them is not the growth of indicators and volumes, but stable payments.