GOLDEN RULES FOR INDIAN COMPANIES PLANNING TO ENTER THE USA

A Hot Tip about Business Management, Management Consultancy in the United States

Posted on: 8 Apr 2010

WHAT DO INDIAN COMPANIES LOOK FOR, WHEN DECIDING TO ENTER THE US MARKET.

Accelerating Success WHAT DO INDIAN COMPANIES LOOK FOR, WHEN DECIDING TO ENTER THE US MARKET? Having spent a good amount of time ? Business friendly government, interacting with many Indian business competitive taxes, dynamic leaders, we've realized that there are entrepreneurial community common top items on any Indian company's ? Excellent transport connectivity : wish-list when considering investing in the Air, Rail, Road, Sea US. ? Easy access to commercial real estate The Wish List ? Quality of Life: Healthcare, Education, Leisure, others ? Access to US markets ? Local community of Indians (Federal/State/Commercial) ? Business environment and Quick The underlying motivations behind the time-to-market above wish-list are: ? Access to qualified Partners (Technology, Systems Integrators, ? Access to high-growth markets Defence Contractors, Life Sciences, ? Technology & knowledge etc) ? Economies of size & scale of ? Highly skilled workforce operations ? Business and Professional services ? Tap global natural resources ? Leverage International brand names COPYRIGHT © INNOVERSANT SOLUTIONS PVT LTD [1] Accelerating Success GOLDEN RULES FOR INDIAN ? What resources do you need to COMPAN ensure success in the competitive IES PLANNING TO US market? ENTER THE USA ? How much can you realistically outlay to set up a US branch bearing in mind your expected ROI? Is there There are several essential considerations a partner organisation that can any Indian high-tech companies (large or assist you in market entry? small) need to make before taking that all important step of setting up shop in the US. Part II - Choosing your preferred US location Part I - Prepare for your move to the USA To find the best place for your particular For most high-tech compan company consider the following items: ies the decision whether to expand to the US will be one of ? Availability of high-speed Internet the toughest they will have to make. access as well as the degree of fibre- Th optical networking within the is step is crucial if a company ? Biotech, Aerospace region and its buildings; , IT, Telecommunications or the ? Availability of well-educated Internet industry ? has plans to conquer the North employees with expertise and skills - American (and other global) markets in IT, telecommunications and . Internet-related fields; But ? The presence of top companies in it will involve considerable effort and money your industry (e.g. for partnership to establish a US branch ? and if this and alliances); fails it can be ruinous for a company. ? Availability of high-class office So the f space; irst recommendation is: Take your ? The general importance of the time. Collect all necessary information and region for venture capital (if look to establish as many contacts on the ground at an needed); early stage. High-tech compan ? Flight distance and time difference ies that have successfully es to India; tablished branches in the US report that it ? Look at the wider location. The took them a few months of careful preparation. perfect office can mean very little if the overall quality of life in the Here are four cr district is poor. Climate, education, itical questions to be addressed at the recreation, safety and healthcare are outset: just some of the considerations that should be taken into account; ? What is the market for your products ? Availability of a highly qualified, and services in the US? Who are your competitors professional economic development and what advantage does group that can assist with market your product/solut entry and negotiate financial ion have over theirs? ? Is there a real, not merely perceived, incentives. need for your products and serv ices? COPYRIGHT © INNOVERSANT SOLUTIONS PVT LTD [2] Accelerating Success Part III - Decide your Business and even before you make the move across the Private Banking needs early globe. Some US law firms have branches in India where you can make personal contact; Few Indian business people might be aware some have helpful websites where you can that it can be extremely difficult to find a US get e-mail addresses to get in contact. Still bank willing to provide a business and/or others can be reached through your local private account (not to mention a credit Chamber of Commerce. card). Since stringent US laws concerning money laundering were introduced some Once again, it is strongly recommended that years ago, US banks only accept clients from you pay a visit to the lawyer of your choice foreign countries if they are convinced they in the preliminary stages of your plans to are absolutely ?clean?. Following are three discuss important matters such as: strong recommendations to follow when establishing links with a bank in the US: ? Visas for all employees of your company that will be going to the US ? Open an account at a branch of a US (consider carefully how long they bank in India very early in your will be staying there) planning stages (at least two years ? Renting or leasing contracts; before your planned move if ? Hiring contracts; possible). ? Service contracts; ? Again if possible, duplicate your ? Patents; efforts with more than a single US ? Warranty and related legal aspects. bank. ? Whichever bank you finally decide to use, ask the Indian manager to The same principle applies to pertinent write a letter of recommendation to issues surrounding your accounting his counterpart at the branch in the requirements. location you plan to move to. It cannot be overstressed how You need to identify a suitable accounting important this step is ? it can greatly company in advance; if you do not there is speed up the process. Indeed, this every chance you might encounter serious applies also to opening a private tax hurdles that could seriously hinder your account and to making move. A good accounting company is arrangements for credit cards. important for all payroll-related issues. Part IV - Arrange Legal and Accounting Part V - Identify Suitable Office Space requirements in advance Office rental varies considerably depending If you are expanding into the US, it would be on location. Prices can differ by a factor of wise not to rely entirely on your Indian up to three. experience as the US situation is not the same. It is also worth bearing in mind that the amount of available office space can be In the United States contracts are extensive; limited depending on location, and this can far more detailed than you might be involve huge security payments to accustomed to in your home base. And the landlords, even as much as a one or two laws are very different as well. years rent. This is why you need to consult a US lawyer The owners of office buildings tend to look COPYRIGHT © INNOVERSANT SOLUTIONS PVT LTD [3] Accelerating Success favourably on companies wanting to lease large space rather than simply one or two smaller offices. So finding office space for a start-up team of five to 10 employees can be time consuming and anything but simple. Therefore, the following recommendations should be noted carefully: ? If you need a rather small area of office space, rather than beginning with your very own individual but tiny office accommodation, consider sub-letting from a bigger tenant; ? If your company is a high-tech start- up, give serious thought to the advantages of establishing your first offices within an incubator (which would bring additional benefits such as comprehensive office services or centre management, access to venture capital, legal and accountancy advice, contact with potential customers and partners); ? Try to avoid long-term leasing (sometime contracts offered cover five or even 10 years); ? Consider serviced office accommodation. Although expensive, it can be cheaper and quicker to obtain when compared with the cost and effort required in doing it all yourself; ? Consult reputable real estate agents/brokers in your region of choice and compare services and offerings very carefully. The author, Siddharth Sarawgi, is the founder Director and CEO of Innoversant Solutions Pvt Ltd (www.innoversant.com) ? a management consulting firm head-quartered in Bangalore. He can be reached at Sid@Innoversant.com COPYRIGHT © INNOVERSANT SOLUTIONS PVT LTD [4] Accelerating Success Innoversant Solutions Pvt. Ltd. #62, 1st Cross, 2nd Main, Dollars Layout, Fixed Line: +91 80 64516669 J.P. Nagar 4th Phase, Tele-Fax: +91 80 2649 1996 Bangalore 560078 Email: info@innoversant.com INDIA Web: www.innoversant.com COPYRIGHT © INNOVERSANT SOLUTIONS PVT LTD [5]
Posted: 08 April 2010

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