I had a girlfriend who was working at a Chinese media company five years ago, and her company said something unpleasant (true) things about an important company in the local province. The mayor called up the newspaper, and was pressuring them... it turned out alright in the end, but it was a minor headache.
If you're doing business somewhere where political influence plays in court, you should just factor that into the cost of doing business and take the mayor out to eat once in a while and do something nice for a local charity or university. The small time/money to be invested in that is still probably less than the costs of compliance in more regulated places (who also have corrupt laws, but the corruption is further upstream - see AirBNB... hotels don't pay off the judge, they pay off the governor).
The law you're thinking of allows having guests as long as you actually live in your residence. My impression was that it doesn't actually affect AirBNB because of this.
* Tax breaks (such as the federal SR&ED[1]) for high-tech businesses. I believe Vancouver has the largest by province, especially if you're in entertainment technology (like special effects) or video games.
* They consider themselves not a melting pot but a mosaic of people; i.e., there is no jingoistic pressure from the bumper-sticker patriots for foreigners to join the suburban zombie horde and conform conform conform, aside from at least learning english or french. Plus, you can sort of feel a fondness (rather than a passing, almost aloof acknowledgement) of their natives (deferentially called "First Nations"). The culture is one of acceptance, rather than impatient urgence to adapt.
* There is an odd reluctance to trusting outsized corporations, especially from what I've seen in Vancouver. Maybe it's just me, or perhaps it's their culture, but where I am now in the US, there are miles upon miles of strip malls with the same 30-40 chains and/or big box stores (Best Buy, Wal-Mart, Bed Bath Beyond, TJ Maxx/HomeGoods, Olive Garden, Dollar Tree, etc.) and small business storefronts (aside from family-run ethnic restaurants) are almost non-existent. I see alot better mix of corporate behemoth vs. mom-and-pop shop in Vancouver. Could just be a big city thing (although, last I checked, NYC was looking more like a concrete version of a big-box store suburb rather than its "if I can make it here..." bootstrappy romantic past).
[1]Strategic Research and Experimental Development - http://www.cra-arc.gc.ca/sred/
Canada is a great choice. Singapore or Hong Kong would be ok. Various Eastern European countries, or Ireland, or Australia or New Zealand -- all great.
The only reason I would put a small business in China is a manufacturing business, or a services business focused ON CHINA. A services business focused outside China based in China is utterly insane. You have the language issue, the undeveloped legal system and business support system, the high cost of top-tier expats, and all sorts of political risk.
Bureaucracy: I've heard regularly bad things about the German bundes. I've heard good things about UK, Sweden, Romania, Hungary.
Labor: Whether you get it here or there the price of labor is only going up, but in China it's going up faster. Programmers are expensive. I'm expensive. If a better offer comes along that you can't match or even come close to I'll be out the door faster than the computer can shutdown. (Of course with my 2 weeks-1 month notice first). Don't expect anything less from the chinese. I don't know what you are working but have you ever hired anyone straight out of college? Experience costs money and mistakes costs money. Just make sure the latter costs less than the former.
Costs and Taxes: Depending on the European country you may not pay any taxes on revenue while in the startup phase (generally 2 years). After that it's country specific, the rules that apply in Germany don't apply in the UK.
Travel: Maybe as a German these things don't matter to you, but, as an American, I find Europe to be fascinating, so many different cultures, so much history, and its all packed in one half continent. When I speak to other french or english friends about SE Asia it's generally "which beach should I visit this week?". Little interest in the culture, history, or the language (I love ordering food in thai, but that's all the thai I know). I think a lot of people have a very romantic idea of what SE Asia is about but that's it. Plus it's huge region, you need a plane to do all that traveling and those flights aren't short.
It looks like you've traded one set of problems for another. I don't know what the startup will ultimately be about but I wish you luck. Also be careful, lots of people have startup ideas that fizzle out, can't get funding, or can't get any promotion because it's not from the right place. One thing I've learned about a company is that it's the people you know as well as the idea that make it a success. If you are doing it in China, then have a chinese focus because no one in San Francisco is going to care about it, until it's too big to ignore.
I am in favor of hiring outsourced Chinese programmers over Indian ones: it is possible to find ones with decent Japanese proficiency, which means that when Tokyo discovers the latest... curious engineering choice I don't have to spend a day doing the needful to communicate our displeasure about it.
We told our outsourced team to write four functions to be accessible via a REST service, using RestEasy. I anticipated this to be approximately a 20 ~ 30 line job. Two weeks later, we received a scratch-built HTTP client which supported precisely one verb and two handwritten serialization schemes, with half the code containing precisely one comment in English by way of Babelfish and the other half containing very literate English comments like you would expect from code developed at a multinational with a legal department better funded than the armed forces of of most NATO countries.
I pray your mileage varies.
Your friend was sued for defamation, and folded rather than take it to court, in one of the fairest court systems in the world, where she likely could have won cost plus damages if she had any evidence for her claims.
In China, someone might have shown up at her front door with a club -- and that someone might have a police badge or work for the mayor.
Also, the Chinese legal system is likely more Byzantine than that of Germany; it's just that it's not enforced. You're going to be in for a world of hurt when the government shuts you down for not having some kind of license you've never heard of.
Your friend is getting sued, so you move to a country where people are put in jail for their political opinions ?
Don't invent stupid excuses, there's no need to. You're 24 years old and are looking for opportunity, and China, despite being a bloody dictatorship were a billion people work in slave-like conditions, is the new land of opportunity, so you're giving it a try. Good for you.
But cut the ridiculous crap. You sound like a spoiled brat.
You are just trading one set of problems with another. I'm sure it will be a fun adventure. Good luck.
A friend of mine is currently going this route and there are a few other HN'ers that are doing this, maybe you guys should get together somehow and compare notes. That might save everybody both hardship and time.
Yes, it is naive. But he'll have fun and learn a lot, so he should do it.
I wish him well in his new venture, even though I'm quite content to stay here in boring old Europe.
Sorry, but reading this is raising a question if the author of this blog article has experienced this himself or just hearing about it. The bigger your company is, the more complex tax forms and other things will become. But as a small startup company it is very easy to do taxes etc. You don't even have to fill out a standardized form for declaring your business income if you are a small company (EÜR in Germany). I was afraid of all this as well, but starting the company here is really easy, there are a lot of government/local institutions that help you with everything, even the IRS answers your questions if you have any.
I cannot judge on the other things, but they sound - as other said here - like the other grass is always greener.
I wouldn't go so far as to say that you should be forced to perpetuate the system. You didn't choose where you were born, and if you think the system in place there is wrong you should be free to leave. But you've benefited from the generosity of others, and now by moving to a country where it's cheaper to do business precisely because it doesn't offer its people the same advantages that Germany does, you're ducking out of repaying that debt. Have you thought about other ways to pay it back? Or do you consider the previous generation to be suckers for paying your way without making you sign a contract first?
This is from memory, so it might not be entirely accurate, but if you're considering starting a business in China you should definitely do some research into how much it will really cost to create and operate your business. There are some good resources on chinalawblog.com, and of course in the comments of HN articles about the topic.
[1] http://en.wikipedia.org/wiki/Wholly_Foreign_Owned_Enterprise
From the big countries that will probably fuel the world economy for the next 50 years (China, India, Brazil and Russia), I would bet my horse in Brazil. There are problems as well (education, poverty, corruption), but none of the BIG ones (terrorism, crazy state rules, dictatorship). There is definitely a trend (World Cup, Olympiads) and I am considering it as well, but timing is paramount: you don't wanna be the first to jump ship and deal with all the crap, but you definitely don't wanna be too late.
- In china, you can pay a programmer 600€ a month
Sure, for average programmers. For good ones, you are going to be paying the same as elsewhere. A friend of mine there told me her brother was earning nearly $500 US/day working as a programmer for a company and they even gave him one week off per month. That would be a monthly salary of $500 x 5 days x 3 weeks = $7500
- you have a wide pool of qualified people leaving university which you can always pick from.
True but the Chinese educational system is very different from the "West". Their educational system focuses more on memorization. Creativity and problem solving are not taught very much. This is going to be a huge problem when hiring programmers right out of university. They will be looking to you to tell them everything they should be doing.
- Also, in china people are more willing to travel around to find an appropriate job than in Europe
Yes, I would say this is generally true amongst all classes.
- Quite apart from the chinese programmers, it’s also easier to get foreign programmers to work for you in china than in europe
Are you talking legally or just by the candidate's motivation?
When I was looking for a job as an English teacher, I went to one place and they told me they were only one of two officially registered English schools in the city. They told me that I would need a TESL (Teaching English as a Second Language) degree, which I did not have, in order for them to arrange the work visa. At the place I was hired, I still did not have a TESL degree but they arranged the work visa for me no problem.
Yes, it is more of the wild, wild west but as a foreigner, you are not going to be able to figure out the system very fast and it will cause you a lot of frustration and wasted energy.
- Important is that there are very low additional costs paid to the government. In Europe, you could pay 1/3 – 1/2 of your profits as a small company just servicing the goverment, China does not require this.
To be blunt, this is a very naive statement. Official costs might be low but you're not factoring bribes and other unofficial costs into the mix.
While teaching English, most of my students were in their 20s and 30s so I would often try to bring up topics of conversation for me to understand the way business works there. Many students would tell me that they would hate when government inspectors would come by as that would mean they would need to pay bribes to them. It is also expected that companies need to lavishly entertain these visitors, so in addition to the bribes, you are expected to drop hundreds/thousands of dollars on dinners and drinks.
Many students would also tell me that their dream job was to be a purchaser for a company. Some explicitly told me that this is because then they could receive kickbacks. I also heard quite a few stories about people stealing from their own companies. In fact, one story came from a guy who was just hired at a company and the manager encouraged him to "take a little for himself." The guy was uncomfortable doing this but he later found out that pretty much everyone in the company was doing this and only the owners were unaware of it.
This is the mindset that you need to adjust to. Many people do not think there is anything wrong with bribes and stealing from the company. If you are going to pay them low salaries, they will find a way to make it up from you.
Anyways, I wish you the best of luck. You'll sure learn a lot. It would be great to see a follow-up post from you in 6 months with your experiences.
Your company is young and your period of profitability is relatively short-lived to date. It seems unwise to have taken a business which appeared to be working well and overhauling it completely to (possibly) reduce costs which did not need to be reduced.
Do you have a 'plan-b' to allow you to quickly revert your company to its previous state if things do not go as planned?
Hopefully, if they've learned anything is overinvestment can be just as bad as underinvesting. If controlled properly they can coast on internal projects until the US and Europe exit their recessions. Then things can go back to business as usual.
I must admit, China would have never crossed my mind as the country of freedoms. But then, I've never been there. Also, I weigh some freedoms higher than others - I don't like that the Chinese government has the freedom to shoot me...
Whatever you do, avoid street food.
I never had a problem with street food.
Even my relatives stopped buying street food for me there. Generally it's really unsanitary. Even street food in NYC is unsanitary, china is definitely worse.
Or to put it another way, if it isn't a problem, it's likely that your product sucks.
It's great that you can fire people when you want, but it sucks if you're the one getting fired.
An alternative solution: make firing people easy, but provide some support to those who get fired. That has costs and benefits too, and is a discussion probably best left to another site. Its main benefit is that it moves the provisioning of "social assistance" from companies, who are no longer forced to hold on to unproductive/unneeded workers, to the government.
Firing someone is not the problem, it's the ensuing lawsuit that's the problem. If it's not done in a particular way you may end up paying an entire years salary instead of a few months.
In this particular case it might not be a problem since Max can keep an eye on his employees , but as soon as you have a manager - you might be very afraid to get on his bad side (maybe in an argument over something technical or a complaint about your chair) for fear of getting fired.
Sorry I'm not familiar with the German language but I believe "bundes" is what they call their ministries. I have a swiss friend who is an investor and he has plenty to say about the national bank (bundesbank) and the finance ministry.
You have some things right and are too optimistic about some things. There are certainly freedoms here that you do not enjoy in the West - at the same time, relationship maintenance is an extremely time-consuming and expensive, never-ending process.
Whenever you brush up with a bureaucratic organization, the experience can be hellish. I own, for example, a ~600 USD receipt-printing machine (fapiao machine) because the gov't forced me to buy it for my business. I also need to buy a new one every 5 years.
Trust is a huge issue. You need a Chinese partner, or you're going to get your ass kicked. You need a Chinese partner you really trust (I recommend you consider finding a Chinese wife), or you're going to get your ass kicked. I know very few successful entrepreneurs who built their businesses here who do not have a Chinese spouse.
I hope you're not building a business where IP is an important competitive advantage. Your code is not safe - safety lies in creating smaller products that are approximately as easy to copy from scratch as to steal. Alternatively, a good business model is one that uses very simple tech but makes heavy use of sales and relationships (for example, a Groupon clone).
Good luck, and remember that people eat people here.
I moved my startup from the US to Hong Kong in 2007. I've spent the last three years there and in Southern China doing business. At the moment, I've moved back to the US (to LA) for a new venture, though I still have things running in Hong Kong (I'll be back next month).
For anyone interested in running a startup in Southern China, I'd be happy to answer questions. Getting things going in China is not easy. It's much easier to bootstrap in Hong Kong or Singapore while you get your bearings and then moving into mainland China later. And this comes from someone fluent in Mandarin Chinese.
If you are interested in doing things in that area, I recommend getting in touch with the Hong Kong Startup Association and introducing yourself there. The community is small and very supportive. Also the Hong Kong BarCamp is coming up soon, make sure to attend that if you can.
Even if the host country is somewhat lax in its own enforcement, laws like this could make returning home rather dicey should one find themselves paying "unofficial costs".
http://www.reuters.com/article/idUSTRE62S0R020100329
Network, the Chinese way, and get some people on your side quickly.
Why do you believe this is different than in the US? While I've never hired programmers right out of university, most of the students I taught in university strongly objected when I demanded independent thought from them.
At least you were trying to teach them independent thought. Teachers and parents do not do this much in China. The sense of hierarchy and obedience to authority appears more in China so the teachers/bosses/parents take advantage of this and just tell students what to do while students do not question them. Again, this is all on a general level.
My opinions were formed by talking to people about it, not from my own experience in the Chinese educational system.
In comparison, I landed in china on thursday. Today is monday, and I have a fully furnished office (with furniture I selected myself), an assistant and 25 interviews with programmers scheduled for this week. The business papers have been submitted, bank accounts have been setup.
This all goes really, really fast.
In comparison, I landed in china on thursday. Today is
monday, and I have a fully furnished office (with furniture
I selected myself), an assistant and 25 interviews with
programmers scheduled for this week. The business papers
have been submitted, bank accounts have been setup.
If you are not U.S born, it's
QUITE difficult to simply
walk in and start a company
in the U.S. And you'd spend
a lot of time just solving
those problems, and have a lot
less time to setup your company.
If they suspect you might try to immigrate you won't even get into the country.
How do all the Chinese/Korean/Indian people in the US do it?
I often read on Hacker News about how difficult it is to start a software company in the US. But then I live in Brooklyn and people who don't speak english are always starting laundromats, bodegas, fruit stands, hardware shops, restaurants, and so forth. 3 out of the 4 businesses on my block were started by FOB immigrants. The only one that wasn't is a bar.
That's one of the reasons why I'm thinking of moving to India or somewhere Singapore/ Hong Kong in the near future.
(The valley may have higher quality programmers and a better tech ecosystem, but I'm guessing the author is looking for grunts rather than artisans.)
As I recall, people said companies can generally VPN out, but that adds to your costs (paying the external VPN site, plus latency, another single point of failure, etc.).
Hope you enjoy Vancouver!
"bundes" means something like "federal" I think, so "Bundesbank" would be "federal bank", the german Fed.
Is stealing from companies so prevalent in china? Has there been studies on this?
There was a lot of government pressure over the 'dodgy dossier' scandal, but nothing like 'the entire top management' being 'fired'. (By who? The BBC Trust?)
I followed the events very closely back then. It's interesting that you should mention the dodgy dossier. It was a dossier that the government presented in parliament as an intelligence report when in fact it was lifted from a thesis paper and then sexed up by government officials. This was a clear case of fraud. But none of the so called independent inquiries even looked at this dossier. They preferred to look exclusively at another dossier that was less troublesome for the government. I watched as much of the inquiries as was possible and I came away thinking, what a farce, what a complete farce. The government ordered the inquiries, they defined the narrow mandate of the inquiries, they appointed the people who conducted the inquiries, everything. And the inquiries didn't ask the questions that would have been tough for the government.
Instead they used a minor note taking mistake by a small radio reporter to pressure the BBC leadership into resignation. I heard interviews with Greg Dyke afterwards. They were plain and simple fired and the renewal of the TV license was used as a lever.
http://en.wikipedia.org/wiki/Index_of_Economic_Freedom_histo...
As far as lawsuits go, that is really more about government regulation. Depending on the what the regulations say, getting sued may or may not be a real concern.
Also, it's very hard to evict someone. It takes a few years and the other person lives rent free. So your choices are to either put up an incredibly large deposit (+30,000€) or have your company guarantee the contract. In my case I just started a new job when I got my apartment. So I put down 22,000€ deposit. People are nicer when you write large checks :)
As for lawsuits. It's not the suit companies are worried about. But the lawyers fees. Labor law, here, is very exact and certain things have to be carried out before you can be fired. A lot of companies just settle because it's cheaper than what the lawyer would charge. Actual lawsuits are rare. A person intelligent to bring a lawsuit and have the funds to retain a lawyer usually doesn't have a problem finding work.
The minimal gain opposed to the guaranteed hassle of dealing with American authorities and rules simply isn't worth it for most foreign banks.
Do the proper paperwork and apply through the greencard lottery. There are plenty of empty spots for French and German greencard seekers. Since we share the same language the UK slots are perpetually full. Australians get a special immigration visa (R-1?) just for being awesome.
I haven't really heard of the lottery before, and I suspect this is the reason:
http://en.wikipedia.org/wiki/Diversity_Immigrant_Visa#Winnin...
The amortized chance of "winning" over all regions is 1.51%.
One person gets here (alone or family) and files for immigration papers for their immediate relatives, starts working here (usually at an establishment of a relative or a person from the same community), makes enough money, transitions to setting up a new business and the someone else takes their place at the previous establishment. That's how the motels and 7/11,Dunkin etc. chains are run ..
This book had a nice description of this phenomenon. http://www.amazon.com/Dhandho-Investor-Value-Method-Returns/...
The FOB immigrants owning stores in Chinatown have either relations to U.S citizens (e.g., uncle, cousins) or they were born in the country and never bothered to try to learn English well (which is fine by me, since I speak Chinese as well).
Also there are quite few bars in Chinatown; they are just in the basement of the restaurants where illegal gambling takes place.
A lot of those come via green card lottery. That still means it's hard.