BOT vs captive vs EOR vs outsourcing: choosing a GCC model for India

There are four common ways to build a team in India: a captive center you set up yourself, build-operate-transfer (BOT), an employer of record (EOR) and outsourcing. As providers usually describe them, an EOR suits a pilot of under 20 to 30 people, outsourcing suits defined capacity you never intend to own, BOT suits a committed scale-up by a company without Indian operating experience, and a captive set up directly suits companies that already know India and have stable, IP-sensitive work.

What separates the four models is who employs the staff, who owns the entity and the intellectual property, and how you get out or take over. Speed and cost follow from those answers. This guide compares the models side by side, then works through which one fits which situation.

Why the choice matters now

India is already home to a large share of the world's capability centers. The finance minister said in July 2026 that India hosts more than half the world's GCCs, and that about two-thirds of the Forbes and Fortune Global 2000 still have no India GCC (PSU Watch, Jul 2026). Many of the companies now arriving are smaller than the early entrants: Zinnov counts 583 mid-market GCCs and 504 backed by private equity (Zinnov, May 2026).

Those companies rarely have someone in-house who has incorporated an Indian subsidiary, run Indian payroll or filed transfer-pricing documentation. The operating model decides how much of that work lands on your own finance, legal and HR teams, and when.

The four models

Captive center set up directly

You incorporate your own Indian company, usually a wholly owned private limited subsidiary, which gives you full control and is governed by the Companies Act 2013 and India's FDI rules (Sagus Legal via Legal 500, Oct 2026). IT and ITeS allow 100% foreign ownership under the automatic route, with reporting to the RBI after the event rather than prior approval (TaxAJ, Oct 2026).

You own the entity, the staff and the IP from the first day. You also own every task: entity setup, office, recruiting, payroll, statutory filings, GST and transfer pricing. One provider puts the time to an operational captive at 6 to 12 months (Wisemonk, Oct 2026).

Build-operate-transfer

A provider sets up the center (either a dedicated Indian company or a ring-fenced unit inside its own), runs it under a services contract, and transfers it to you when agreed conditions are met (Morgan Lewis, Jun 2024). You end up with a captive center but skip the learning curve of building one. Our guide to how BOT works for GCCs in India covers the phases, structures and transfer mechanics in detail.

Employer of record

The EOR is the legal employer of your India staff, while you direct their day-to-day work. It is the fastest route, with people onboarded in days to weeks, and is priced per employee per month. One provider advertises EOR fees from US$99 per employee per month (Wisemonk). You have no Indian entity, which keeps things simple. You also hold no local assets and have no center to grow into.

Outsourcing, managed services or an offshore development center

A vendor employs the staff and runs the processes, and your relationship is contractual. Providers say teams can be in place in 4 to 8 weeks, priced per full-time equivalent. The usual summary is that you buy capacity rather than build capability. There is also a tax advantage: because you have no Indian entity billing your parent, there is no transfer-pricing burden for the client (Bar & Bench, Jun 2026).

Side-by-side comparison

The table is a synthesis of provider comparison pages, so treat the timings and fits as indicative (Wisemonk; Dev Mantra; ANSR, Jun 2026).

What each model costs

Almost all published cost figures come from BOT and GCC providers, so read them as indicative. One provider puts a fully loaded engineer at US$25,000 to US$80,000 a year, a traditional BOT at US$300,000 to US$1 million, and a captive built directly at US$0.5 million to US$3 million (Wisemonk, Oct 2026).

Another quotes US$0.8 million to US$2 million for a 20 to 50 person BOT over 18 to 24 months, and a captive ranging from US$200,000 for a 20 to 50 person pilot to US$6 million to US$12 million or more for 300-plus people (eCorpIT, Aug 2026). The same source notes that BOT is often costlier per head during operate because of partner fees and dual governance.

The comparison that matters is total cost over the period you expect to run the center, including the time your own staff spend on setup. We go through the line items in what it costs to set up a GCC in India.

How tax and compliance differ

The tax burden follows the entity. With outsourcing and an EOR you don't have an Indian company of your own, so most Indian filings sit with the provider. Check with counsel how your specific arrangement is treated for permanent establishment purposes.

A captive, or a BOT center after transfer, is an Indian subsidiary that typically bills its parent at cost plus a markup. Budget 2026-27 merged IT services, ITeS, KPO and software contract R&D into one category with a 15.5% safe-harbour margin on operating cost, raised the eligibility threshold from INR 300 crore to INR 2,000 crore, and allowed companies to lock in the same margin for up to five consecutive years (Taxmann, Feb 2026). As of November 2026, sources differ on whether the rules apply from 1 April 2026 or are still in draft (TaxAJ, Oct 2026; KPMG). Transfer-pricing documentation is required once international transactions exceed INR 1 crore (Bar & Bench, Jun 2026).

The subsidiary's services to its parent can be zero-rated GST exports if the statutory conditions are met, and CBIC Circular 161/17/2021-GST confirms that related-party status does not by itself block export treatment (TaxAJ, Oct 2026). A branch office does not get the same treatment, because a branch and its head office count as establishments of the same person.

BOT has its own issues before transfer. A provider that negotiates or concludes contracts for you can create permanent establishment exposure (Sagus Legal via Legal 500, Oct 2026), and if your group controls the provider too closely, authorities may recharacterize the arrangement (Bar & Bench, Jun 2026).

Which model fits your situation

You want to test India with a small team

Start with an EOR. It is the quickest to set up and the easiest to unwind if the pilot doesn't work. Providers commonly cite a break-even against outsourcing somewhere between 25 and 50 engineers, though that figure is vendor-published and indicative (Wisemonk). If you expect the pilot to grow, plan from the start how staff will move from the EOR's payroll to your own company.

You need delivery capacity for well-defined work

Outsourcing or a managed service is the simplest answer when the work can be specified and measured on output, and you have no plan to own the team. You avoid entity setup and transfer pricing. The trade-off is that the knowledge and the people stay with the vendor.

You plan to own a center but have never run an Indian entity

This is the situation BOT was designed for. The provider absorbs the setup work and has a team in place within weeks to a few months, and the transfer gives you ownership once the center is stable. Agree the structure, the transfer triggers and the transfer fee at the outset, and put your own center leader in place during operate. Our build-operate-transfer service page describes how the service works.

You already operate in India, or the work is IP-sensitive

A captive set up directly gives you full ownership and control of IP from the first day. If your company already has an Indian entity, payroll and a finance team that handles Indian compliance, a BOT partner adds less. The cost is time, so allow for the slower ramp.

You are a mid-market or PE-backed company

Private equity has become a major source of new centers: 64% of new emerging-enterprise GCCs since 2020 are PE-backed (ANSR, Nov 2025). Many of these companies want to own their center but have thin corporate functions. BOT often fits, with the operate period set to match the investment horizon.

You are replacing onshore hiring

The rise in the US H-1B fee to US$100,000 in 2025 is cited as one reason US companies opened more India GCCs (Storyboard18, Dec 2025). If you need people in seats quickly, an EOR or a BOT will get you there sooner than a captive built from scratch.

Questions to answer before you choose

• How many people do you expect in India in 24 months, and how confident is that number?
• Is the work core intellectual property, or a service you could buy?
• Do you want to own the entity, and if so, by when?
• Who in your company will lead the India team?
• How much Indian tax, payroll and compliance work can your finance and legal teams take on?

Clear answers to the first three questions usually narrow the choice to one or two models. The last two decide whether you build alone or with a partner. For the practical steps that follow the decision, see how to set up a GCC in India.

Where to start

Onfocus already recruits and runs engineering teams in India for clients in fintech, banking and Web3, and offers Build-Operate-Transfer for companies that want to own their center. If you are weighing these models, we can walk through your headcount plan and timeline with you and say plainly which route fits. Get in touch about a GCC.

This article is general information, not legal or tax advice. Confirm the details for your situation with Indian counsel and a chartered accountant.

Frequently asked questions

What is the difference between a captive GCC and BOT?

With a captive you set up and own your Indian subsidiary from day one and handle setup and compliance yourself. With BOT a provider builds and runs the center first, then transfers ownership to you once agreed conditions are met.

When should a company use an employer of record instead of setting up a GCC?

An EOR suits a small pilot, which providers describe as under 20 to 30 people, because it is fast to set up and easy to unwind. If the team will grow, plan early how staff will move to your own entity.

Is BOT cheaper than a captive center?

Provider figures suggest BOT has a lower upfront cost but is often costlier per head during the operate phase because of partner fees and dual governance. The useful comparison is total cost over the period you expect to run the center.

Does outsourcing to India create transfer-pricing obligations?

With outsourcing you have no Indian entity billing your parent, so there is no transfer-pricing burden for the client. A captive, or a BOT center after transfer, bills its parent at cost plus a markup and has to manage transfer pricing.

Which GCC model suits a mid-market or PE-backed company?

BOT often fits, because these companies usually want to own their center but have thin corporate functions to set one up. The operate period can be set to match the investment horizon.