While doing business in India may not be the easiest (this doesn’t in anyway mean that India cannot improve its business friendly policies and initiatives), but it definitely is a place to be in for the future. And as business is a game of return on investment, India over the long term offers unique advantages, which cannot be overlooked for a long period of time. Despite its share of woes, those businesses that walk in and stay enjoy healthy returns over a period of time.

What India has to offer?

The Economy of India is currently ninth largest in the world by nominal GDP and the third largest by purchasing power parity (PPP). According to some reports, the most significant increases in share of world GDP at MERs (Market Exchange rates) are projected to be achieved by India. In 2009, India’s share of world GDP at MERs was just 2%. By 2050, this share could grow to around 13% according to these analysis.

Even for 2011-12, when global recession is still playing havoc, Indian growth story continued (@7% GDP growth estimates) as the second best after China among the major economies. India’s growth trend is expected to overtake China’s trend growth at some point during the coming decade due to India’s significantly younger and faster growing working age population than China and it is also having more potential for growth as it is starting from a lower level of economic development than China. The working age population in India will grow through 2030 to have the highest % of working age population (of total population) amongst major economies, giving it a significant productivity advantage.

According to some estimates, particular priorities for India will be maintaining a prudent fiscal policy stance by further extending its openness to foreign trade and investment, significantly increasing the investment in transport and energy infrastructure and improving educational standards particularly for women and those living in rural areas. In the course of this process, the drivers of growth are likely to change. India is likely to become less dependent on outsourcing and more on manufacturing exports by building on its strong engineering skills and rising levels of education in the general population over the next decade.

Consumer markets in major Indian cities will also become increasingly attractive to international companies as the size of the Indian middle class is growing rapidly over the last few years.

According to another report, India’s investment in infrastructure during 2007-12 is expected to be around $500 billion as the expected level of infrastructure investment predicted in the 11^th five year plan is 2.36 times that of the 10th plan. Furthermore, this is expected to almost double for the 12th five year plan (2012-17).

• The report, also pointed out that about 97 million jobs are likely to be created over the next 10 years across different sectors in the country.
• Due to this huge increase in jobs, India may need to potentially build an average of 8.7 billion sq ft of real estate space every year, adding up to a whopping 95 billion sq ft between 2010 and 2020, RICS said.
• In 2020, the workforce participation rate will increase to 42% with 585 million working population, implying net increase of 97 million people.
• The study, however, said there is a huge shortfall of skilled manpower (Training & Development Opportunities) in the infrastructure sector that needs to be addressed with urgency.
• As per estimates, only 27,000 civil engineers are added every year against an annual demand of 4.27 million for the next decade. India’s current total strength of civil engineers is about 5,33,000. A sustained period of shortfall in annual supply coupled with an increasing year-on-year demand could result in a cumulative demand of nearly 40.2 million civil engineers over 2010-20, with a shortfall of 39.4 million civil engineers over the same period, the report highlighted.
• Similarly, the country is likely to witness a total shortfall of 3.64 million architects and 1.1 million planners during 2010-20 period.

Infrastructure is just one of the aspects of the Indian growth story but there are many opportunities to mention such as education, infrastructure (Airports, Seaports, Railways, Power), healthcare, tourism & travel and oil & gas. So, not many economies can foresee such opportunities going forward.

Are foreign companies investing in India?

An annual FDI inflow indicates that FDI went up from around negligible amounts in 1991-92 to around US$9 billion in 2006-07. It then hiked to around US$22 billion in 2007-08, rising to around US$37 billion by 2009-10. In other words, the stock of FDI has jumped by almost US$100 billion since 2006-07.

For 2011 calendar year, the FDI is expected to be more than 30 billion US Dollars (a continuous rise) confirming the interest and promise India holds and delivers. While these numbers may be small in absolute sense compared to some other economies, the trends indicate a strong positive bias.

According to the World Investment Report 2009, issued by the UNCTAD (United Nations Conference on Trade and Development), there is a total of 3,057 multinational companies (MNCs) in India. From 2004 to 2009, the number of Indian-based MNCs decreased nearly 50%, while the number of foreign affiliates increased 90%.

The expansion plans of some of the global companies indicate their confidence in future based on their past success in India. It also indicates that they have adjusted to the business environment and operations in India very fairly & easily and are gaming to play this at a larger scale. They have progressed on the learning curve quite rapidly and feel well entrenched to capitalize on the strong base they have built up. Almost all the major companies like Coca-Cola, Pepsico, Nestle, Siemens, ABB, GM, Honda, Toyota, Samsung, Vodafone, Intel, AMD and many more have recently expanded or are planning to expand their operations in India.

These MNCs are helping diffuse technology and innovation in key sectors such as Pharma, solar energy, agriculture, biotech, nuclear and defense. The MNCs and the Indian industry are gaining a lot from each other. The MNCs are bringing in and adapting global best practices to help solve local problems and help India get linked in a better way with the global economy.

It’s a win-win; these MNCs have become growth partners and have a major role to play in India’s development. MNCs are investing with long term horizon to help India realize its potential in new areas and in the process to scale up their operations and business results as well.

While there is scope for improvement in policy and environment around business setups and operations, the situation on the ground does offer lot of hope.

How do existing foreign firms performing in India?

Most of the global companies in India have a market leadership position based on their product/ service portfolio strengths. Whether it chemicals, power, infrastructure, industrial, consumers, health, entertainment or telecom, these companies have a strong brand acceptance and market share. They give a run for the money to the local counterparts and have a history of strong growth in the country. This clearly signifies: India is a market for equal opportunities and doesn’t differentiate by where are you from. In fact, in certain areas, it is a big advantage to be non – Indian.

Conclusion

World is becoming a challenging place for business with the uncertain times ahead. For global firms, the familiar markets may be getting mature and the challenge would be for growth in these markets. The emerging markets may be lucrative but unknown and possibly accompanied with an uncertain climate, the challenge could be around entry barriers or business policies.

So, to a business, both markets offer challenges of a different kind. Some companies may want to wait for the business environment to improve significantly before moving in while others will move in and learn as they grow (contribute in the improvement process in their own ways) and leap ahead.

As far as India is concerned, second course of action might be more desirable and the experience of so many existing global companies doing so well in India underlines this fact. So, hop in and enjoy the ride into the exciting future with all its twists and turns and look forward to reaching to the next level.

[This post have been written Rohit Chaturvedi, Founder & Managing Director at Expand in India, having close to 20 years experience in business consultancy, industrial management, strategic planning, marketing, operations, team building, leadership and six sigma process orientation. You can join his LinkedIn Group or follow his blog. ]

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Market research is one of the activities that most brands indulge in regularly. But more often than not it has been proven that is a waste of time.

Now most of you reading this would be finding it difficult to believe above statement, after all brands spend Crores of rupees in this activity. All business schools teach us that this is the most important activity that precedes any market launch. But just hear me out before you dismiss this statement out right.

Market research was firmly established in the early part of the 20^th century as an important activity. This was further fuelled by the belief that most brands can capture the felt and latent needs and wants of its consumers. This activity is again divided into qualitative events like focus groups or interviews and quantitative techniques like questionnaires.

The net result was a result based on which the brand managers would develop the 4Ps – product, price, place and promotion for the service or product before positioning it to the consumers. But most of this activity is a sheer exercise in justifying a promotion that the brand has about the market segment and does not have enough evidence to guarantee the success of a launch.

A good case in point was the launch of new Coke. Post World War II Coke had almost 65% share of the aerated beverages market in North America. But by 1980’s it had fallen to 24%. This was mostly due to the launch of the Cola wars by then Pepsi president John Scully, who introduced a series of blind taste tests that proved that most consumers preferred Pepsi for taste if the brand name was not disclosed. The tests were even televised and by 1980 the results were causing considerable alarm in the Coco-Cola headquarters in Atlanta.

So the CEO Robert Goizueta launched the vision of new Coke, a new formula which was field -tested and backed by market research. It had an acceptance rate of almost 70% and only 10 % of respondents felt disappointed with the new taste. But when launched on April 23, 1983 it was a disaster. Most loyal Coke drinkers formed associations to ban the new drink and Coke market share fell further.

Finally Coco-cola relented and brought the old Coke back. It cost them Billions of dollars and some very angry consumers.

The market research did them in and Coke took some time to come back to level terms.

There are countless examples like this when Market research has actually harmed the company more than it benefitted them.

On the other end of the spectrum there are companies like Apple which do not rely on market research at all. Steve Jobs in fact abhorred market research and relied on his personal knowledge and intuition. What he famously said was – The consumers do not understand what they want or what is a “great product”, they come to know it when you give it to them!

Similarly no sane market research specialist would have advised Larry Page or Sergei Brin to launch yet another search engine when Yahoo was the going great gins. Also, Mark Zuckerberg may have never launched Facebook if he relied on market research.

So how does one go about launching new products or services if one has to completely do away with market research? Well the answer is not so simple but a good place to start is the sales data.

Sales data both from competing and substitute, products and services are a great place to start to get inputs into your own product development. Many great marketers have stressed on the need to be in the field and observe the consumer buying behavior at the point of sale. The issues and concerns of the consumer form a good insight into a product development, like for example storage of songs was an important input into the iPod.

Secondly product packaging and design would form the second key component. This again cannot be ascertained from field tests of focus groups but one has to just look at the packaging of Tobacco products to understand how something so deadly can be beautifully packaged to look attractive. A good example in India is the ITC soap brand Fiama Di Wills.

Thirdly sales training to ensure that they communicate the right message which was the input from the design. This could be from the sales data, point of sales experience or the design of the product.

All these three require considerable effort and are not for every firm, but only those with the right investment in sales, marketing and design. For the rest there is always the luxury of stale market research.

Would love to hear your views on this!

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The article primarily provides an overview about the regulatory aspects for setting up/ incorporating business in India by Foreign nationals / NRIs in light of the changed regulatory environment in the past few years. It aims to cover areas related to Foreign Direct Investment (FDI) policy and RBI Circulars, Companies Act, 1956 for Indian as well as Foreign Companies.

At the outset please note that the term ‘Indian’ or ‘Foreign’ companies do not necessarily denote ownership. It merely denotes the place of registration. Thus when a foreign national incorporates a company in India, it is indeed an Indian Company. But when a foreign company decided to set up only a branch office in India, it is termed as a Foreign Company. We shall see more of that later on.

What is Foreign Direct Investment (FDI)

It is to be noted that the capital to be invested by the Foreign National / NRI shall be classified as ‘Foreign Direct Investment’ (FDI) in India. Before the economic liberalisation in India in the 1990s, there were a high number of restrictions for FDI in India. Gradually, the restrictions have been watered down to a great extent and currently the restrictions are in place for only those business activities that are strategic to the interests of the country or are politically sensitive issues such as Retails trade, Defense, Telecom, Real Estate etc.

Thus today, FDI is classified into:

1. Business sectors where FDI is not allowed at all
2. Business where prior permission is required from the Foreign Investment Promotion Board (FIPB)
3. Business where no prior permission is required.

Please note that in all case, once the FDI is received and accepted by the Recipient Company, an intimation is to be sent to the Reserve Bank of India(RBI) in Form FC-GPRS within a month of allotting the shares to the foreign shareholder.

Thus the first place for any foreign national or any Non-Resident to look out for is the FDI policy. He has to first understand if there are any restrictions, prohibitions in the proposed business activity and then move forward to the company formation process.

Note on Foreign Investment Promotion Board (FIPB)

Now let us talk in detail about the FIPB process. The FIPB is the high level body which approves investments which require prior approval through a single window clearance system. The FIPB has some of the topmost officers and secretaries as its members.

An online application is to be made and when the case is put up for discussion, the investor or his appointed professional can make a presentation. Please note that the FIPB is a highly transparent mechanism and it is indeed very fair to the investors.

Once a person is clear with the FDI rules applicable to the proposed transaction, then he can decide on the nature of business entity that he wants to set up.

Types of Entities

The next question that is to be asked is the type of entity to be formed in India. It can be noted that FDI is not allowed in India in the form of sole proprietorship or partnership businesses except that NRIs are allowed to do so on non-repatriable basis.

However it may not be advisable to opt for that route. Also, FDI is not allowed in trusts and non-governmental organizations except that of Venture Capital trusts. The options that remain are individually discussed below:

1. Liaison office:

This is most suitable for companies who neither have nor see much of a presence in India. Liaison offices are extremely restricted in what they can do and are mainly set up as a communication medium between the Foreign company and its existing customers in India. A Liaison office can’t solicit customers nor indulge in any form of promotion. They can’t carry out business operations in India. At the cost of repetition, their role is merely to act as a communication medium between the Foreign Company and the existing Indian customers.

Because of its limited role, the compliance to be completed by a Liaison Office are the least. The biggest advantage is in income taxes where the provisions of Permanent Establishment and Transfer Pricing may not be much of a concern since the Liaison office does not earn any income as such.

2. Branch Office:

This is the next step towards a full fledged branch business presence in India. A branch office in India can execute most of the tasks that a Limited Company can execute except manufacturing. A Branch Office acts as a branch of the foreign company, be its permanent establishment under the tax laws and can earn income from business operations. Recently the RBI has tightened the norms regarding who can open a branch office in India. One of the criteria is that the Foreign Company intending to open a branch office in India should have a track record of at least 5 years of profit making.

3. Project Office:

A Project office is like a temporary branch office set up for a particular project.

4. Limited Companies:

A Limited company can have a full fledged presence in India. Unlike the previous three entities which are technically called as Foreign Companies, a subsidiary company is called an Indian company. The compliances are also greater than a foreign company.

5. Limited Liability Partnership (LLP):

Recently the Government has allowed Foreign Direct Investment through Limited Liability Partnerships (LLPs). However the policy change seems to have been made for name’s sake and the conditions that accompany the investment in LLP have been made very stringent. For all practical purposes, one needs to wait for further clarity. Till then FDI in LLP shall be advisable only for a very limited set of investment proposals.

• First thing to note is that FDI will be allowed only in those companies where 100% FDI is allowed through the automatic route and there are no FDI-linked performance related conditions.
• Automatic approval route means no prior permission from the Government/ FIPB is required. FDI-linked performance related conditions meant that in sectors, where conditions like minimum capitalization, compulsory disinvestment after a few years etc are prescribed; even though 100% FDI is allowed under automatic route, LLP’s will not be allowed to bring FDI with the approval of Government of India.
• No FDI shall be allowed in agricultural/plantation activity, print media or real estate business.

Procedures to setup a Branch, Liaison or Project Office in India

Now let us talk in detail about the procedure to set up a branch, liaison or project office in India.

1). The first step is to approach the Reserve Bank (RBI) of India for permission to do so. The documents that are generally required are Parent Company’s Annual Report for last three years, Certificate of registration, License, Power of Attorney attested by the Indian embassy in the home country, Board Resolution, reason for setting up an office in India etc.

2). If the RBI is satisfied with the above documents, then it gives a letter of approval .Kindly note that the approval letter from RBI may contain some conditions and which are to be observed in the strictest sense. The permission may be for a particular time period , generally three years.

3). Once the permission from the RBI is obtained, then the permission is required from the Registrar of Companies in a single form along with payment of the requisite fees.

4). The entity is known with the extension of the particular office. For example, the branch office in India of ‘ XYZ Inc.’ would be known as XYZ Inc. India Branch Office.

5). One important thing to be noted is the appointment of an Authorized Signatory in India. He shall be responsible for all the compliances of the Foreign Company in India

Business Setup by Foreign Nationals / NRI Flow Chart

Hope this articles gives you a brief overview of how Foreign Nationals & Non-Resident Indians can setup a Business in India. If you have any questions, please let us know in comments and we will be glad to answer your questions.

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We really don’t believe in people and blog posts that dole out fixed rules on naming a company. It’s not the name the makes the business famous, it’s the quality of services or products they provide.

Apple doesn’t have the ‘cool quotient’ today because it is merely named Apple. It’s the series of successful products they have given to the world. But there are some things you must keep in mind before naming your business only for the sake of convenience.

Here are a few overarching tips and guidelines.

1) Check availability of Domain Name First

This is very important in today’s online world – You can have the best name for your business in the world but it won’t be of any use until you have an available domain name for it.

Make sure you don’t have to compromise with a .net or a .biz domain name when you actually wanted .com, just because the domain name of your choice has already been taken. The time in spending the right domain name may have far – reaching positive effects to your Business .

In fact, this is one thing you should be doing when you have just begun to conceptualize your business. And as most of you might already now, many business people bulk buy domain names to cover for their future businesses.

2) Steer clear of common names

This really depends on what you business is all about. If you have B2B products and services where you’re never really going to advertise on billboard or commercials, or if you have a business where you are not going to use make heavy use of the internet, you may choose to name the company with your family’s initials or some such.

But if your branding heavily depends on being web and customer friendly, an extremely common name may not carry much value. And it might already be overused on the Internet.

3) Let the name of your Business be Meaningful

Whether your name is common and dull or highly abstract and hi-flung, it should convey a story behind it. Having said this, we don’t mean that your company’s name should be self explanatory so that the customer understands it at the first go.

Here is an example – On your website, you might want to have a small section on why your business is named the way it is. This might create a nice emotional hook in the longer run. Apple and Yahoo! are prime examples of names not directly connected with the products and services they offer, but they have a story of why they were named so.

4) See how your name will fit graphically and visually

You might want to work with a graphic expert before zeroing in on the name of your company. When you make logos, letterheads and other visual representations of your company, you may find out that reducing just one or two characters from the existing name would have made things easier for your graphic artist.

Instead of regretting this flaw later on, consult your graphic artist about the name or acronym of you business much before you freeze it on a domain or on legal grounds.

5) Don’t Deliberately Misspell your Company’s Name

You may decide to add a ‘c’ instead of a ‘k’ to add a cool or inspirational quotient to your company’s name, depending on the products or services you offer or just for the heck of getting a domain name.

But going the other spectrum in misspelling your company’s name without any reason will harm your brand. The marketing fad of misspelling names has now been so overused that it’s almost passé.

Inverted names can work in some scenarios brilliantly, but names like KwalityPhilters (for Quality Filters) is just trying too hard.

Naming a business or a company, at the end, is a very personal choice. While some believe that names should inherently reflect the nature of the business, some believe the complete opposite. In fact, some of the most famous companies in the world have flouted most naming rules. So, as they say, the ball is in your court!

Let us know if you have any tips that will help readers when it comes to naming their business!

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India and Singapore are on a path of increasing economic integration. The ties that bind these countries have a long history – they are rooted in a common culture and a shared legacy of being former British colonies.

Since 1991 (as a result of India’s Look East trade policy), cultural exchange, immigration and military links between both countries have increased dramatically. By 2001, Singapore-India bilateral trade had increased to S$2.65 billion. In 2005, both countries signed the India-Singapore Comprehensive Economic Cooperation Agreement (CECA). By the next year, total trade grew four-fold to approximately S$11 billion.

Existing India Singapore Business Relationship

According to International Enterprise Singapore (the national agency responsible for spurring Singapore’s external economy) India became Singapore’s 10^th largest trading partner in 2010, registering S$30.7 billion in total trade, up from S$21.6 billion in 2009. Data from the Singapore Indian Chamber of Commerce and Industry (SICCI) shows that as of June 2011, Singapore’s Indian business community has become the single largest country-based business community in Singapore, having grown by 25% within less than a year.

The reasons for this deepening trade relationship are multi-fold. Singapore has long been an attractive business destination as companies and investors recognize the value of its unique geographical and political environment. Firms can access most of the major Asian markets from Singapore.

Singapore’s responsive government and efficient legal system results in a pro-business environment which offers low tax rates, sophisticated infrastructure, strong IP protection, progressive immigration policies and an abundance of skilled labour force. Together, these factors have continued to entice entrepreneurs and multinationals to set up business ventures in Singapore.

Many Indian firms and entrepreneurs have done so in recent years. In 2009, Bangalore-based infrastructure giant, GMR Group; and K S Oils, India’s leading integrated edible oil FMCG company set up their regional and international offices respectively in Singapore.

In the same year, August Media was founded in Singapore and within a year, had scored a $60 million deal with US animation giant Classic Media. In September 2010, rope wire manufacturer Usha Martin announced its plans to make Singapore its corporate engineering knowledge center as well as international headquarters. In May 2011, Tata Communications named Singapore as its official international headquarters.

For many Indian entrepreneurs and businesses, Singapore holds a cultural attraction as well. It represents harmonious balance between the East and West and offers a culture that is familiar and comfortable for many Indians. Singapore is a clean, well-functioning cosmopolitan city with low pollution levels, reliable public transportation, high quality educational institutions and increasingly colourful entertainment, dining and arts scene. The recent uptrend in the purchasing of property by Indian expats also demonstrates that many find Singapore an attractive place to live.

How to start a Business in Singapore

If you are considering Singapore as the location for your business, there are some important considerations that you should keep in mind. First of all, you must carefully consider the type of company you plan to setup. For individual foreign entrepreneurs, the clear choice is to incorporate a private limited Singapore company. Foreign companies on the other hand, have a choice of setting up a branch office, a subsidiary company or a representative office in Singapore.

Singapore law allows 100% foreign ownership of Singapore companies. A Singapore company can be registered with a minimum of one shareholder, one director, and a paid-up capital of $1 only. Each company must appoint a Singapore-based company secretary and registered address and file its annual return with company registrar and income tax authorities. Since most of the work in Singapore is computerized, it hardly takes 1 day to register a company in Singapore.

If you are a foreign entrepreneur, you must bear the following in mind as well. If you plan to relocate to Singapore to run your business, you must secure a relocation visa of type EntrePass (Entrepreneur Pass) or EmploymentPass. These two types of visas do not come under any quota system however they are subject to the applicant satisfying the necessary qualification criteria. Each application is reviewed and approved by authorities based on its own merits. Once your relocation visa is approved, your spouse and children can also relocate to Singapore on Dependant Passes and you are eligible to apply for permanent residence in due course.

Overall, setting up a business in Singapore is quite easy and simple. The country has consistently been ranked highly in international business surveys and reports. Just last year, Singapore was named the city with the highest ease of doing business ranking, highest quality of life ranking in Asia for expatriates, most competitive economy and most efficient bureaucracy by institutions such as the World Bank, ECA International, Gallup and World Economic Forum. To become a part of this growing and dynamic environment, consider setting up your business in Singapore.

[Ina Jasni works for Janus Corporate Solutions - a leading Singapore-based firm that offers full-range of cost-effective Singapore company registration, relocation visa, accounting and ongoing compliance services to businesses worldwide. For additional information on the topics discussed here, you can visit Janus’s website]

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Let us start on a good note, M&A landscape is set to change as SEBI comes with new takeover code today. The high profile open offer trigger is increased from 15% to 25% and the non-compete fees is scrapped.

In Mutual Fund segment, introduction of transaction fee (INR 100-150 for investment of INR 10k) will be revival of sorts for the distributors. Also the stringent KYC will be unified and simplified by linking it to the aadhar cards.

What are the implications?

• Easy availability of the growth capital as the increased open offer trigger will attract more investments from private equity placements, strategic investors
• The scrapping of non-compete fee will improve valuations and will treat all the shareholders fairly and hence price per share for the target firm is set to improve
• Simplification of the investment processes under SEBI’s jurisdiction by the revised KYC framework

There is another good policy in the making ‘The Companies Bill 2011’ which is under the review of the cabinet. The new bill proposes following things:

• Companies with net worth more than of INR 500Cr or turnover more than INR 1000Cr turnover will have to prepare CSR policy and spend 2% of avg. net profit into this. Although it is not mandatory but the company not following will have to publicly state reasons
• Investors to get rights to intervene in management’s decision by proposed class action. The bill might also provide for punishment for frivolous class action suits
• Provision for mandatory rotation of auditors and critical evaluation of independent directors to promote good corporate governance practices

Coming to Bad policies, which is actually ineffective one is the Lokpal Bill recently passed by the parliament. Contrary to recommendations by civil society representatives headed by activist Anna Hazare, the UPA has kept the Prime Minister, the judiciary and the conduct of lawmakers inside Parliament out of the purview of the Lokpal. The immunity for the Prime Minister only extends to the period during which he remains in office

As per the government’s draft, the majority is driven by government (5/9 members from govt.). This will give complete authority to government. The power to remove the Lokpal also vests with them and not a Supreme Court judge or a five-member committee as suggested by the civil society. Why do we actually need Lokpal if we are going to follow these rules! This is a mockery of the revolution which started few months back.

So it has been mixed feeling week. Steps are being taken to improve the capital market in India but if India has to grow completely, society cannot be neglected for too long. I remember JRD Tata’s words: I don’t want India to be just a superpower. It should be a happy country!

Your views?

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Doing Business 2011: Making a Difference for Entrepreneurs, the eighth in a series of annual reports published by IFC and the World Bank is a report to reckon with. The study conducted on the world’s economies gives ranking to countries after executing lot of calculations on various parameters on “ease of doing business”. The study is like report card for all the efforts put in by world’s economies covering the period June 2009 through May 2010.

The various parameters considered were ease of starting a business, Dealing with court permits, registering properties, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts & Closing a business.

Among the world economies Kazakhstan showed phenomenal change in rankings by improving conditions for starting a business, obtaining construction permits, protecting investors, and trading across borders. As a result, it moved up 15 places in the rankings on the ease of doing business—to 59 among 183 economies. Two other regional economies, Tajikistan and Hungary, were also among the 10 most-improved economies, climbing 10 places and six places respectively.

This year’s list of the 10 most-improved economies includes three in Sub-Saharan Africa—Rwanda (a consistent reformer of business regulation), Cape Verde, and Zambia—as well as Peru, Vietnam, Grenada, and Brunei Darussalam.

Globally, doing business remains easiest in the high-income economies of the Organization for Economic Co-Operation and Development and most difficult in Sub-Saharan Africa and South Asia. But developing economies are increasingly active. In the past year, 66 percent reformed business regulation, up from 34 percent six years earlier.

In the past five years, about 85 percent of the world’s economies have made it easier for local entrepreneurs to operate, through 1,511 improvements to business regulation. Doing Business 2011 pioneers a new measure showing how much business regulation has changed in 174 economies since 2005.

For the fifth year running, Singapore leads in the ease of doing business, followed by Hong Kong SAR China, New Zealand, the United Kingdom, and the United States. Among the top 25 economies, 18 made things even easier over the past year.

Worldwide, more than half the regulatory changes recorded in the past year eased business start-up, trade, and the payment of taxes. Many of the improvements involve new technologies. Technology is an enabler which makes compliance easier, less costly, and more transparent.

China and India are among the top 40 most-improved economies that made significant changes in business regulation at a steady pace in 2009 to make it easier for firms to operate, according to a new World Bank report.

Though India comes in at number 134 out of the 183 (one rung higher than last year’s 135) it has a long way to go, since its counterparts are way ahead china stands at 79, Russia& Brazil at decent 123 & 127 respectively.

Since 2005, India has implemented 18 business regulation reforms in seven areas, creating more opportunities for local firms, according to the report.

Many of the reforms focused on technology-implementing electronic business registration, electronic filing for taxes, and online submission of customs forms and payments, and the report notes.

Governments worldwide have been consistently taking steps to empower local entrepreneurs since entrepreneurs play quintessential role of a catalyst in today’s society in defining a promising future for society at large & nation on a whole. Private sector development and entrepreneurship development are crucial for social & economic development.

Nations need to nurture and develop entrepreneurs to be able to take advantage of opportunities created by globalization. This report is testimony to the fact that today entrepreneurship is touted as the powerful growth engine of economic growth, job opportunities, wealth creation and improvising quality of standards for the society.

Doing Business 2011 – Full pdf report

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You have to give it to Google. It never ceases to surprise the world with its seemingly unorthodox style of operations. Be it their oh-so-cool work atmosphere, strategic marketing tactics generating tons of hype even before the product launch, the fascination with Beta launches, and last but not the least their acquisitions and business deals.

Google manages to pull out rabbits out its hat with such uncanny frequency that most of the times, the rest of the marketplace cannot predict what is going to come next. However, what is more interesting is that even after so many products and acquisitions, Advertising revenue continues to remain the Bread and Butter for Google.

However, with the dynamics of the marketplace changing, Google off late has gotten into a little diversification. The diversification though till now has been more from a “Seeing Beyond Internet Search” per say than monetization models. Android (OS) and now its own phone Google Nexus bear testimony to the fact that Google is indeed diversifying itself in tune with the market.

But, then a OS and a phone still may not be termed as unthinkable products from someone who has ruled the Internet like very few have. But, how about a Technology company getting a license to BUY and SELL energy.

Google Energy, a wholly owned subsidiary of Google has received federal approval Google Energy to buy and sell energy on the open market

It is interesting to note that Google had applied for authorization from regulatory body to allow Google Energy to “act as a power marketer, purchasing electricity and reselling it to wholesale customers”.

Now , Google made it clear that they ventured into the energy domain to be able to have more options for the way it powers its data centers. Google needs quite an amountful of energy to operate its resource hungry data centres. With Google Energy, Google will have more control in terms of energy supplies for its operations. Google already uses innovative ways to cool its data centres without electricity.

However, with a license that allows them to both buy and sell electricity on the open market, will Google shy away from making Selling Energy a part of its product portfolio. Well, there has been no indication as of now of Google launching a new business model but then with Google I would not be surprised.

From the looks of it, Energy costs and supply pressures are already a burden for businesses and more so for someone in the domain Google operates in. The future only promises to make energy even more costly and limited, so Google might have put its money where it should have. A classic case of foresight to optimize the costs and control energy supply pressures.

But, should Google Energy be used as a Business entity, would it mean Diversification gone too far. A technology company diversifying as an Electricity marketer sounds even more weird than the crazy Satyam – Matyas acquisition which made headlines last year.

What do you think ? Is Google Energy going to serves Google’ Interest of managing its own energy needs and a push to fulfil its commitement of being “Carbon Neutral” or will Google turn it into a new business altogether.

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Satyam Computer Services has probably been the buzzword of the year gone by, albeit for unfortunate reasons. Satyam was one of the top most IT services company and shouldered the industry veterans like Infosys and Wipro. Who would have known what was cooking behind the glamorous walls and the highly profitable balance sheets.

Evidently Satyam was to become a part of one of the biggest Corporate Frauds in India.The man in charge, Mr.Ramalinga Raju evidently was cooking the books beyond recovery. We have had so much coverage here on the Satyam fiasco that there is no point going over it again. It all started with the Satyam-Matyas fiasco and then things got really ugly when Mr.Ramalinga Raju confessed his crime in open.

It opened the flood gates for the company and the in direct consequences had the Government stepping in. Eventually, Tech Mahindra ended up buying Satyam Computer Services and rechristened it to Mahindra Satyam.

There were speculations that Tech Mahindra might have made a mistake given that the clear financial details were very much under the wraps even then. Moreover, Satyam was no small fish, and Tech Mahindra would have had to really pull the plugs to make it work. The timing couldn’t have been worse as the global markets plummeted and IT budgets just vanished out of the blue.

However, cutting the long story short, Tech Mahindra has done a brilliant job of bringing the almost doomed company back on its feet.

The turnaround is even more spectacular given the industry Satyam operated in. IT services is a data sensitive industry, where confidentially and trust form the backbone of its sustainability. With the image that Satyam got itself, there were serious doubts that it will be possible to even restore the existing clients leave aside acquiring new ones.

But, Mahindra Satyam has risen from the ashes. Aided by an improving economy and some real brand building , Mahindra Satyam is finally getting into shape. The evidence stems from the fact that Mahindra Satyam is back in hiring mode.

It has called back 2000 of its employees which were relegated to the virtual pool.

Mahindra Satyam is clearly expecting increasing workload on account of acquiring new clients. More so, it is honouring the commitment made to its employees and looking to utilize the existing employee base before looking outside for hiring.

The new management board has indeed assed and executed the damage control meticulously and it is now aiming for growth. Infact, Mr.Mukesh Ambani cited Satyam’s turnaround as a great example of improving Corporate governance in India , during the show ‘The Politics of Economics’.

It is only the beginning and probably a lot needs to be done but the revival has been speedy and efficient so to speak. With improving IT spend forecasts, Mahindra Satyam would be gunning to regain its lost glory.

I remember there were news doing the rounds that Satyam Corporate Governance fiasco became a case study at one of the premier MBA schools.Wonder if Mahindra Satyam turnaround accounts for another case study on How To Revive A Maligned Brand

Who do you think should be credited for the quick turnaround of Satyam ?

An improving marketplace? – the strong technical fundamentals of the company? or the new management who steered the company? My vote goes for the management because it can be seriously daunting to chart growth plans and work towards improving the image of a company at the same time.

Related posts:

1. The Curious Case Of Mahindra Satyam and its liabilities
2. It’s Mahindra Satyam now. Do you like it?
3. Satyam goes to Tech Mahindra. Is it a win-win for all parties?