A global capability centre (GCC) is a company's own team in India doing work for the parent: technology, analytics, finance, customer operations or research. More companies abroad now build their own centre instead of outsourcing, because they keep the people, the knowledge and the control.
Most of the hard decisions come before the first hire. Here they are, in the order you face them.
1. Build, partner or outsource
| Model | How it works | Suits |
|---|---|---|
| Own entity | You set up an Indian company and hire directly | Long-term plans, sensitive work, a parent with HR and finance capacity |
| Build, operate, transfer | A partner sets up and runs the centre, then transfers it to you | Speed now, ownership later |
| Outsource | A vendor does the work under contract | Well-defined work you do not need to own |
2. The legal entity
Most GCCs are set up as a wholly owned private limited company. Foreign investment of up to 100% is allowed under the automatic route for most service activities, so the investment itself needs no government approval.
- A branch office needs approval under the RBI's rules, applied for through your bank, and may only carry out the activities approved.
- A liaison office cannot earn income, so it cannot run a GCC.
- After shares are issued to the parent, the Indian company reports the investment to the RBI within 30 days, on Form FC-GPR.
3. Tax
Transfer pricing. The Indian company charges the parent for its services, usually at cost plus a margin. The price must be at arm's length, and the company files a transfer-pricing report every year. Safe harbour rules can give certainty on the margin for some IT and back-office services.
GST. Services to the parent abroad can count as an export, with no GST charged, if the conditions are met, including payment in foreign exchange. Most centres file a letter of undertaking so they can export without paying GST first.
4. City and people
Bengaluru, Hyderabad, Pune, Chennai, Delhi NCR and Mumbai have the deepest talent pools, and salaries and skills differ between them. Shortlist two cities on the skills you need, not on rent.
From the first employee, the new Labour Codes apply: appointment letters, the wage definition, working hours and settlement within two working days of exit. The office must also be registered under the state's shops and establishments law. A centre that handles customer or employee data needs a plan for the DPDP Act.
5. A realistic timeline
- Months 1–2Decide
Model, city, entity and the first roles. The parent signs off the business case.
- Months 2–4Set up
Company incorporated, bank account, tax and GST registrations, office, payroll and benefits.
- Months 3–6Hire
The centre's leader first, then the first team. Notice periods in India often run to two or three months, so start early.
- Months 6–12Run and grow
Work moves from the parent in stages, with service levels agreed for each.
The mistakes that cost most
Hiring the team before the leader. The first senior hire in India should shape the next fifty.
Moving work that was never written down. Document the process at the parent before you transfer it.
Running the centre only to save cost. Parents get the most from centres that own outcomes, not just tasks.
