The GCC Advantage
India hosts over 1,800 Global Capability Centres employing more than 1.9 million professionals. The combination of talent availability, cost efficiency, and enabling regulatory environment makes India the preferred destination for GCC operations across technology, finance, and professional services sectors.
The growth trajectory shows no signs of slowing. Multinational corporations that once established GCCs for cost arbitrage now view them as innovation centres. The talent pool has matured. The infrastructure has improved. The regulatory clarity has increased. India's GCC story is entering its most promising chapter.
Entity Selection
GCCs typically establish as wholly-owned subsidiaries of the parent corporation. The choice between a private limited company and a branch office depends on several factors, though the private limited company structure is overwhelmingly preferred.
Private Limited Company
Most GCCs prefer the private limited company structure for its operational flexibility, limited liability protection, and ability to contract independently. The incorporation process under the Companies Act, 2013 typically takes 15 to 20 days with proper documentation.
A private limited company can employ staff directly, enter into commercial contracts, own intellectual property, and operate with considerable autonomy from its parent. The compliance burden is well-understood and manageable. This is the default choice for good reason.
Branch Office
Branch offices may be suitable for limited activities such as liaison or export promotion. However, branches cannot engage in manufacturing or processing activities and face restrictions on local borrowing. The branch structure is increasingly rare for GCCs that intend to scale.
The branch also creates direct liability for the parent company, which is often undesirable from a risk management perspective. Unless there are specific reasons to prefer a branch, the subsidiary structure is almost always superior.
Regulatory Approvals
Depending on the sector, GCCs may require additional approvals beyond standard company incorporation. Financial services GCCs need RBI registration or licensing. Those handling regulated activities must obtain sector-specific permissions. Data processing operations must ensure DPDPA compliance from day one.
The regulatory mapping exercise is essential at the planning stage. Identify every activity the GCC will perform. Map each activity to the relevant regulatory framework. Determine which approvals are required before commencement and which can be obtained during operations. Build realistic timelines.
Location Strategy
The choice of location impacts operating costs, talent availability, and regulatory benefits. Tier-1 cities offer mature ecosystems with established talent pools. Tier-2 cities provide cost advantages and increasingly attractive state incentives. SEZ locations offer tax benefits but with operational restrictions.
The location decision is not merely about cost optimisation. Consider the talent profile you need. Evaluate the competition for that talent in each location. Assess infrastructure quality, connectivity, and quality of life factors that affect employee retention. The cheapest location is not always the best location.
Operational Considerations
Successful GCC establishment requires attention to transfer pricing documentation, intercompany service agreements, and intellectual property arrangements. These structures should be established at inception to avoid complications during subsequent tax assessments.
Transfer pricing is not a compliance afterthought. The pricing of services between the GCC and its parent must be arm's length and documented contemporaneously. Tax authorities are increasingly sophisticated in examining GCC arrangements. Proper documentation from day one is your best defence.
AMLEGALS applies its TCL Framework to GCC advisory, ensuring comprehensive coverage of operational, commercial, and regulatory dimensions from the planning stage itself. A well-structured GCC delivers value for decades. The investment in proper setup pays returns throughout its life.