- My company is negotiating with an outsourcing provider based in India. What are some key considerations?
- I am considering an investment in an Indian company. What are some key considerations for me?
- My company is seeking to expand into India. What are some key considerations?
The ideal structure of outsourcing relationships depends on the goals of the outsourcing relationship and the services being outsourced. In general, some of the key considerations include:
- The internal processes of the outsourcing provider as they relate to information security, quality control, and quality assurance;
- The level of capitalization of the outsourcing provider;
- Reasonable service level obligations;
- Managing customer perceptions;
- Obtaining organizational buy-in;
- Dispute resolution procedures in light of disparate legal processes in India versus the US;
- Employee attrition rate; and
- Establishing clear training guidelines and procedures.
I am considering an investment in an Indian company. What are some key considerations for me?
The Indian economy is experiencing high levels of growth, fueled in part by foreign investment into India's primary growth sectors. Investing in an Indian entity, however, is not usually as direct as investing in a US business. The transaction becomes even more complex in situations where an investment is a part of a larger business partnership between a US company and an Indian company. Some key considerations are:
- The company structure of the Indian entity;
- Cross-border tax issues, including the possibility of establishing holding companies in other countries with favorable tax treaties with the US and India;
- The nature of affiliated services in investment transactions associated with a larger business partnership, including compliance with transfer pricing regulations;
- Management and corporate governance issues related to the Indian entity; and
- The projected jurisdictions from where revenue is expected to originate.
My company is seeking to expand into India. What are some key considerations?
India's economy is more open now than it has been, but expanding business operations into India still involves a number of key hurdles. But access to the consumer base of India's large and growing middle class can be important to a number of US businesses. Some of the key considerations include:
- An acceptable structure for a joint-venture entity, along with due diligence on local Indian partners;
- Management and licensing of intellectual property with Indian JV or subsidiary;
- Cross-border tax issues, including the possibility of establishing holding companies in other countries with favorable tax treaties with the US and India;
- Repatriation of investment dollars;
- Regulatory compliance in India; and
- Risk associated with possible protectionist legislation for certain industries.
