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Q: Cost of opening an office in Mumbai, India ( Answered 5 out of 5 stars,   2 Comments )
Subject: Cost of opening an office in Mumbai, India
Category: Business and Money > Employment
Asked by: imcsa-ga
List Price: $200.00
Posted: 28 Feb 2006 01:53 PST
Expires: 30 Mar 2006 01:53 PST
Question ID: 701792
I need rough figures for the following kind of costs in Mumbai, India

- Renting 100sqmeters office
- Salaries for the following positions:
   ? Project manager
   ? Senior PHP developer
   ? MYSQL DB admin
   ? Graphic web designer
   ? Sysadmin (Unix/Linux)
   ? HTML designer

I also would need to know the additional costs generated by salaries
(healtcare, retirement, holidays, taxes, etc...)

Obivously, I don't need precise figures, as the requirements are too
generic, but I need an idea of the kind of costs involved.
Subject: Re: Cost of opening an office in Mumbai, India
Answered By: hummer-ga on 28 Feb 2006 13:48 PST
Rated:5 out of 5 stars
Hi  imcsa,

Here you go -


I think the following link is just what you are looking for (click on
the link for full details).

"Rentals and Capitals values have demonstrated a substantial increase
across most of the micromarkets during the quarter. All-inclusive
prime base rents in CBD are estimated in the range of Rs. 155-180/ ft2
pm (US$1 43- 50/ft2 pa). Base rents for Grade A buildings in Worli and
Bandra Kurla Complex are estimated to be approximately Rs. 125-140/ft2
pm (US$ 34-39/ ft2 pa) and Rs. 120-130/ft2 pm (US$ 33-36/ ft2 pa).
All-inclusive base rents at Andheri East are estimated in the range of
Rs.70-75/ ft2 pm (US$ 19-21/ ft2 pa)."

My conversions from Rs to US$ using the figures found on the chart at
the above website:

Rs. to US$ (x 0.02250)
p/sq.ft        Avg. Base Rent    Gross Rent    Avg Efficiency  
CBD           Rs.168 (US$3.78)  Rs.181 (US$4.07)  85% 
Worli         Rs.133 (US$2.99)  Rs.149 (US$3.35)  75% 
Lower Parel   Rs. 93 (US$2.09)  Rs. 99 (US$2.23)  70%
Bandra Kurla  Rs.125 (US$2.81)  Rs.140 (US$3.15)  70%
Andheri Jurla Rs. 73 (US$1.64)  Rs. 77 (US$1.73)  70%
Malad         Rs. 38 (US$0.86)  Rs. 41 (US$0.92)  82%
Powai         Rs. 44 (US$0.99)  Rs. 47 (US$1.06)  80%

My conversions from price per sq. foot. to price per sq. meter:

psf to psm (x 10.76391)
p/sq.m       Avg. Base Rent     Gross Rent    
CBD           (US$40.69)        (US$43.81)  
Worli         (US$32.19)        (US$36.06)  
Lower Parel   (US$22.50)        (US$24.00)  
Bandra Kurla  (US$30.25)        (US$33.91)  
Andheri Jurla (US$17.65)        (US$18.62)  
Malad         (US$ 9.26)        (US$ 9.90)  
Powai         (US$10.66)        (US$11.41) 

Mumbai: Population: 16.4 million
Class A Office Space
Average CBD rent: $46 psf/yr  [about $500 psm]
Average suburban rent: $28 psf/yr [about $300 psm]

Median Salary By Skill / Mumbai

* Project manager  $15641

* Project Manager, Software Development  $15960

* Senior PHP developer
Software Engineer / Developer / Programmer  $4925

* MYSQL DB admin
SQL                     $10471	
PL/ SQL                 $10264
SQL Server (Microsoft)  $ 9120

* Graphic web designer
Web Designer  $5107

* Sysadmin (Unix/Linux)
UNIX     $12540
Linux    $12141

* HTML designer
Software Engineer / Developer / Programmer   $4925

* Office Manager   $10260

* Consultant, IT   $13349

* Team Leader, IT  $13680

* IT Manager       $13680

* Testing / Quality Assurance (QA), Computer Software or Hardware  $7524

Rising Costs Threaten India's Hold on Offshore IT
February 8, 2006
By Sharon Gaudin
"junior-level programmer with no specialty would have earned $12 to
$15 an hour several years ago. Today, the same level of programmer
would earn $15 to $18 an hour."


Starting a Business - India [click on the link for more details]
Standardized Company
Legal Form: Private Limited Company
Minimum capital required: Rs.100,000 [1]
City: Mumbai
Registration Requirements:
Present name of company for approval to the Registrar of Companies
(ROC); Get the Memorandum and Articles of Association vetted by the
ROC and printed
Time to complete: 7 days
Cost to complete: Rs 500 
Make an application to the Superintendent of Stamps requesting for
stamping of the Memorandum of Association and Articles of Association.
Time to complete: 2 days
Cost to complete: Rs. 200 (for MOA) +Rs. 1000 (for AOA) for each slab
of Rs.500,000/- or part thereof +Rs. 100 (stamp paper for declaration
Form 1)
Present the required documents along with the registration fee to the
Registrar of Companies to get the certificate of incorporation
Time to complete: 9 days
Cost to complete: see the comment
Obtain a company seal
Time to complete: 7 days
Cost to complete: Rs. 500 
Visit the UTI Investors Services Limited to obtain a Permanent Account Number
Time to complete: 30 days
Cost to complete: Rs. 65 
Obtain a Tax Account Number for income taxes deducted at source from
the Assessing Office in the Mumbai Income Tax Department
Time to complete: 45 days, simultaneously with Procedure 5
Cost to complete: no charge 
Register for sales tax before the Sales Tax Officer of the ward in
which the company is located
Time to complete: 15 days, simultaneous with procedure 6
Cost to complete: Rs125 
Register for Profession tax
Time to complete: 2 days, simultaneous with procedure 7
Cost to complete: no charge 
Register with Mumbai Shops and Establishment Act, 1948
Time to complete: 2 days, simultaneous with procedure 7
Cost to complete: Rs. 5,000
Register with Employees' Provident Fund Organization
Time to complete: 2 days, simultaneous with procedure 7
Cost to complete: no charge 
Register with ESIC (medical insurance)
Time to complete: 1 day, simultaneous with procedure 7
Cost to complete: no charge

Source of Funds: Employer
- Provident fund: 3.67% of payroll. Employers pay an additional 1.1%
of payroll a month for administrative costs.
- Survivor (deposit-linked) insurance scheme: 0.5% of payroll, plus
0.01% of payroll for administrative costs.
The maximum monthly earnings for contribution purpose are 6,500 rupees.
- Pension scheme: 8.33% of payroll.
The maximum monthly earnings for contribution purpose are 6,500 rupees.
- Gratuity scheme: An average of 4% of payroll.
- Social assistance: None.
Source of Funds: Employer
- Social insurance: 4.75% of payroll for covered employees; the cost
of maternity benefits for employees not covered by the 1948 law.
The above payroll contributions also finance work injury benefits.
- Social assistance: None.
"Labor law requires employers to provide a severance payment equal to
15 days? average pay for each year of employment. Eleven states have
instituted temporary unemployment programs funded by the government."

Social Security and Pension Plans
"India does not have any social security law in place. Certain
statutes providing for employee benefits are mandatorily applicable
only for employees drawing salary not more than Rs. 6,500 per month."

Additional Links of Interest:

India? Go North and West to Eastern Europe 2006
"In India it appears the biggest problem is that the talent pool of
skilled workers will not be able to keep up with demand. Bill Gates
was quoted as saying, 'The only thing that limits us in India is the
speed at which we can recruit.'"
"Despite the hype, successful outsourcing to India is still difficult.
While the market has matured, telecommunications have improved, and
English fluency in India has flourished, challenges remain. Cultural
issues creep in, service-level expectations are set too high,
transitional costs (opening an office and closing an office) can be
very expensive, and ongoing relationship management is expensive and
"Well, if you are looking for high quality, low cost software
development, I suggest you look west of India to Eastern Europe. I
like the Czech Republic and a new rising star, the Ukraine."
"But the Ukraine?s pluses far outweigh the minuses: The monthly salary
for a software engineer ranges between $450 and $600. That?s right,
monthly!  For a manager it can go as high as $1,000 dollars a month.
Compare this to India, with 35 percent attrition rates, no loyalty,
salary increases of 25 percent a year, and salaries averaging $30,000.
Further, Ukraine has great proximity to western culture and demands.
Its time zone is +1 hours from Central Europe and +7 from the east
coast of the United States. Even Indian firms are setting up practices
in the Ukraine for easier access to Western Europe. And the R&D
infrastructure in the Ukraine is significant. Considering all that,
the Ukraine is a no-brainer for the elusive low cost labor chaser.",guid,f47da1ad-963b-4c26-8d88-0ae26dfc5509.aspx

"Hewlett-Packard has pegged the cost of a talented programmer in India
at about $20,000 a year, well below the cost of a top U.S. tech
worker. Companies also face facilities costs and the expense of
managing offshore work, offsetting the impact on the bottom line. The
total savings from hiring an IT service provider to perform foreign
work may be as high as 40 percent to 50 percent, IDC analyst Ned May

India Laws/Legislations
Legal Aspects
"Few simple steps to take care of legal aspects of setting a business
is to Register your unit with the relevant authority, check out the
labour laws that would be applicable to you, pay your commercial taxes
and take care of environmental aspects. Each of these aspects are
discussed below in detail" 

Legal Aspects
"Few simple steps to take care of legal aspects of setting a business
is to Register your unit with the relevant authority, check out the
labour laws that would be applicable to you, pay your commercial taxes
and take care of environmental aspects. Each of these aspects are
discussed below in detail" 

List of Various Central Labour Acts Laws/Legislations

Location Attractiveness of Key Indian States for IT-ITES

November 01, 2005
Special Post: Doing Business in India

Ministry of Labor

Employees? State Insurance Corporation

 "I can speak for india as I have done some research into this. The
most expensive city is Mumbai but you're also going to get a good
level of education and Net-awareness there. I am biased, since I was
educated there :)
A low-mid-range rent for a 4-person office is about US$125/month and
salary is about $175/month. Rents in the CBD are a lot higher and not
necessary for an SEO operation. If you plan to visit often, then you
should choose suburbs that are easy to reach by train.
in the rest of india, rents and salaries will be lower. Remember, the
best people are taken up by the major multinationals and the
applicants will also size you up to gauge long-term prospects.
I would expect to pay much more than that to get English-language
skills that would be acceptable in the West. While millions of indians
speak perfectly acceptable English, when they write it, the quality
varies greatly, even if you ignore typos. Hence allow for a higher
salary to find the better applicants."

Costs of setting up an office in India (Mumbai based) 2003

Went for Cost, Stayed for Quality?: Moving the Back Office to India 2003

Should you "India-enable" your software firm? 2003
"We're all familiar with the disparity in annual salaries for
programmers: $10,000 in India versus $66,100 in the U.S. It should be
obvious?but it's far less publicized?that you can save just as much on
other positions: The average for an IT manager in India is $8,500,
while his counterpart in the U.S. makes $55,000; an accountant makes
$5,000 in India versus $41,000 in the U.S.; and an Indian with a
financial operations title earns $5,500, compared to $37,625 in the

I hope this is just what you were hoping for. If you have any
questions, please post a clarification request and wait for me to
respond before closing/rating my answer.

Thank you,

Some of the Google search terms used:

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ministry of labour india register business
mumbai commercial taxes
imcsa-ga rated this answer:5 out of 5 stars and gave an additional tip of: $50.00
Thanks a lot, this was very useful.

Subject: Re: Cost of opening an office in Mumbai, India
From: hummer-ga on 08 Mar 2006 10:43 PST
Dear imcsa,

Thank you for your thank you, nice rating, and generous tip. I
appreciate them all and am glad to hear that I was able to help you.

Subject: Re: Cost of opening an office in Mumbai, India
From: apre_bhat76-ga on 28 Jul 2006 05:56 PDT
you can try and also contact brokers who may
charge you 1 month rent as fees minimum. Better to contact owners
directly. Best buildings are in Nariman Point. N. Point rentals are
owners of several properties upto 800 sq ft. only. tel 9122-22845004

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