Setting up an Indian subsidiary for US companies and startups

At Agentdesks, we decided it’s in our best financial interest to have our engineering team in Bangalore, India.  As soon as we closed our seed round at Agentdesks, I traveled to Bangalore to recruit and set up our engineering team.  I truly believe it’s a good option for most startups in the Seed / Series A stage to think about setting up an engineering team in India (assuming you already have a good network in India).  I decided to write this blog to make it easier for other startups to do the same

Administrative

  1.  As a first step, I registered a wholly owned subsidiary of Agentdesks in India.  This involved a bunch of paperwork, which our accountant took care of.  Keep in mind, you should have at least 2 directors to start a subsidiary in India.  So, the second director can own 0.00001% of the company or something that insignificant.  It doesn’t really matter
  2.  We found a co-working space, that’s plug n play in Electronic city, Bangalore.  It just takes a day to shift.  I would advice not to waste time in finding a dedicated office space and furnishing it, etc.
  3. Starting a bank account – Pick a Citibank or any other bank that has Global presence.  We picked up HDFC Bank and struggled for a couple of weeks to get it going.

Recruiting and team management

Now, about setting up a team – Recruiting engineers is the most difficult job anywhere in the world.  It’s as difficult in India as it is anywhere else.  Engineers who join a startup are already taking a big step in their career to stay away from normal.  This means that they need additional assurance before joining your company.

  1. You definitely need a Head of engg, who can code, understand architectures very well and is a proven winner.  Recruit him/her first.  This person should be an experienced engineer who has led teams before, at companies that have scaled up fast.  He/she is your go-to person and an integral part of your co-founding team.
  2. Spend enough time in India explaining the vision of your company and why you are doing what you do.  Everything you believe in is easy for you to understand but it might take a while for everyone else to catch up on.
  3. In India, getting engineers who are really good at their job and want to work for a startup are really rare and expensive. So, interview them really well.  Most of them say they know everything but they really don’t.  As a startup, speed is the most important thing for you. So, take your time in getting the right engineers.  It’s alright to spend a couple of months to get the right engineer.  Don’t be in a hurry and settle for anyone.
  4. For us, I am not sure if this is a rule of thumb, websites like LinkedIn, naukri and a multiple other websites didn’t really work out.  Neither did HR consultancy firms.  All our hires have been through references.  So, as a first task, we really think you should spread the word out through your networks and your team’s networks.  When it comes to joining a team, most engineers make that call based on who the team already has.  If they are comfortable working with someone, the decision becomes easier.
  5. Once you have a good team, it’s very important for both teams (Indian team and your US team) to be on the same page almost every day.  There is definitely a layer of complexity added to the team structure because of the distance between the engineering team and the sales team.  But as a CEO, it’s my responsibility to bridge the gap.  I have a call every day with engineers in India and I keep everyone in San Francisco posted on what’s happening.  Once a week, both teams have a call too.

This is an ongoing process of learning for me and I will keep posting blogs about it.  If you are planning to set up a subsidiary in India and have any questions, feel free to shoot me an email at biju@agentdesks.com.  I will try my best to help you out  🙂

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