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My core aim is to hire people directly in India (Delhi) and spend a lot of time there myself (I am a British person with a British passport).

I am interested in knowing what are the best options for hiring Indians. Initially I will be looking to hire two people but also to expand the workforce in the future.

Currently I am exploring the options of registering a wholly owned company in India (It was also suggested that for harbouring tax a Mauritian holding company might also make sense). Additionally an alternative could be a long term contract where they would invoice me monthly for their work.

My concern is less about local employment laws and more about taxation laws - clearly an accountant in India would be able to advise here but any advice is appreciated.

Has anyone any experience in this area or could recommend any accountants in the UK and/or NCR / Delhi, India.

Thank you

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David before investing too much in India I would take a hard look at Belarus, Ukraine and other Eastern European countries. I went through this same strugge with our US company about 5 years ago. What I quickly learned about Indian Developers, (we went through 15-20) is that a world of promises were made, but at the end the quality of the work performed was low. I made two visits per year to our site in Bangalore, and often found that if the developers did not have direct supervision from us, that work was being performed on other contracts. These were direct hires, under our payroll in – Frank Dec 10 '10 at 21:22
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our office space we rented. The culture in India is not centered around quality. It is more a culture of grinding out work. There is very little in the way of innovation. We remedied the problem by having an independent USA PM live on site and manage the employees. Still quality was low, but at least it fixed the issue of our guys just not working sometimes. Right now I have about the same size team distributed between Belarus, The Ukraine and 2 in Sweden. Belarus and Ukraine are about the same cost as india, expect our employees there care about our company. Its far easier to recruit – Frank Dec 10 '10 at 21:24
talent of a higher calibur. Our most senior developers are in the Ukraine. They give a #$@@ about our company, they are involved in profit sharing and take pride. They make critical recommendations to our code, business model, and have a full understanding of business rather than just programming. The best is that they are honest. Its a culture that values honesty and doesnt tolerate polotics. There is a great firm in Belarus that I could turn you on to, they would probably fix your tax questions since they would be running their own company, and you could just expense it as a service – Frank Dec 10 '10 at 21:25
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you use. I also think if you are only going to have 2-5 developers it doesnt make sense to do them as direct hires. If you have a ton of work for them then it does make sense. For your case, a low cost, high quality tech firm makes the most sense because you can use different parts of their talent base as required, and dont have to worry too much about tax burdens and employee moral and job security. Last, having traveled to both Eastern Europe and India i think you will find working in Eastern Europe a lot more pleasant. Its still not the UK or USA but its closer culturally & physically – Frank Dec 10 '10 at 21:28
Thank you Franky for your comments and suggestions, I have looked at Estonia and certainly I will consider hiring outside of India but at the moment I have a strategic advantage of being in India which is why I am focussing here. – Dav-id Dec 12 '10 at 10:48
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Ask them to do something that is not possible and daft, if don’t tell you that you are being daft, or they use lots of works so as not to hart your feelings, then find someone else.

Explain something to them in a way you know they cannot understand, ask them if they understand the task, if the say “yes” find someone else.

The sad fact is a lot of India people are not willing to give bad news to anyone that they consider to be there “master”, you can’t work with such people in a useful way…..

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Thank you for your advice, I will for the most part be directly involved with them in person for at least the first 3 months of building a small team and to/from India frequently following this. Culturally I am expecting some friction like this and aim to nip this in the bud from the outset - I know this might not be possible but I am willing to work around some of these kind of differences. I like very much the idea of being deliberately throwing some spanners in the works to see the kind of response I get. – Dav-id Dec 10 '10 at 14:42
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@mfg, the problem is it is not just sale peole in India that are expected to always say yes, it can be considered very rude for an India to say anything negitaive to someone that is "above" them. – Ian Ringrose Dec 12 '10 at 19:53
Thanks for the context, that makes a bit more sense – mfg Dec 13 '10 at 4:35
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Find them on VWorker.com Give them a test project first, where you do not explain that it is a test project. This means that you can check out their work ethics etc.

Later you can hire them on a per hour basis via VWorker.com or hire them normally.

I do this all the time.

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Thank you for your suggestion, I will be hiring a specific role which unfortunately cant be found through this website. At the moment my knowledge is particularly weak when it comes to the best way to hire people in terms of locally registered company vs overseas company and the implications when it comes to contracts and tax laws. – Dav-id Dec 10 '10 at 14:53
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I have over 45 staff in 9 different countries. I have never had success in hiring staff in India. I think the main reason is that although there are some exceptionally talented people, it's really hard to get access to them and there are also a lot of extremely average people. Also I have found that a lot of Indian workers that I have dealt with have not given straight answers to my questions.

Also why do you want to set up a company in India? That will expose you to a lot of red tape and hassle. Much easier to just hire directly from an overseas company. This will mean you are not exposed to legal issues in India and are not exposed to the bureaucracy in India.

Instead of starting a company in India, consider hiring from any country in the world, and have everyone working from home. I have some software that can help manage this process and make sure the staff are really working the hours they say they are www.timedoctor.com. The hardest part is finding the right people. I suggest recruiting from as many places as possible, using multiple channels, for example: forums, facebook, linked in, free job boards (there are many just search for jobs India), maybe a recruitment company, outsource it to other companies that can search for you. The recruitment effort takes a lot of time to find the right person and you need to put significant attention on it.

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Thanks Rob. Can I ask how do you deal with local taxation laws? Are the people you work with invoicing you rather than being on a payroll? – Dav-id Dec 12 '10 at 10:44
Generally if you are hiring a contractor I wouldn't worry about any local taxation laws. If you have an Indian company and you hire in India you have to worry, but if you have a US company and hire in India, it's unlikely to ever be an issue – Rob Jan 6 '11 at 11:25
up vote 0 down vote

Depending on whether or not you plan to operate in another country, you may have to form a corporate entity in India to making hiring workers easier. Once you do that, you'll need to comply with local wage and employment laws, and pay local taxes. The only tricky thing is about how you enter the country, under an employment visa through the company or another route. Otherwise, if your business will not hire workers in any other countries, then you are looking at a fairly typical company setup in India.

Note: This is not legal advice nor does this give rise to any attorney-client relationship.

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Well I am from India (I belong to both Auditing fraternity, fellow member of one the premier auditing organisation in the world www.icai.org and a software developer) and personally feel that answers so far has not focused on the questions raised.

The question I understand relates to hiring in India. It is presumed that person raising the questions has considered all options and may be India is one of the country in his target.

Now coming back to possible answers, to form a company in India to hire a few person is definitely an overkill. You will have to follow all kind of regulations including labour law.

The best way to forward is higher few people directly without considering an Indian Company. Many Indian developer are available on Elance and other online outsourcing portal. In case the experience with initial hiring is good and one want to increase presence in India, a company may be formed in India.

Being both a legal professional and a software developer, I will be glad to answer any specific question on Indian Outfit.

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