What it costs to set up a GCC in India in 2026

Setting up a Global Capability Centre (GCC) in India in 2026 can cost anything from about US$200,000 for a 20 to 50 person pilot captive to US$6 million to 12 million or more for a centre of 300-plus people, according to figures published by one GCC provider (eCorpIT, Aug 2026). Another provider puts a do-it-yourself captive at US$0.5 million to 3 million and a traditional Build-Operate-Transfer (BOT) engagement at US$300,000 to 1 million (Wisemonk, Oct 2026). Both sets of figures come from firms that sell these services, so treat them as indicative.

People are most of the bill. Wisemonk puts a fully loaded engineer at US$25,000 to 80,000 a year, and office rent in the six largest GCC cities runs from about ₹72 to about ₹171 per square foot per month, depending on the city and on how rent is measured (Outlook Business/PTI, May 2025; CRE Matrix, Jul 2026). The rest is entity setup and compliance, tax, the partner fee if you use BOT, and a set of costs that rarely make the first budget.

The cost components at a glance

Entity and compliance costs

The standard GCC vehicle is a wholly owned subsidiary set up as a private limited company under the Companies Act 2013, with the investment made under the FEMA Non-Debt Instrument Rules (Sagus Legal via Legal 500, Oct 2026). IT and ITeS allow 100% foreign direct investment under the automatic route, so no prior government approval is needed, only post-facto reporting to the RBI (TaxAJ, Oct 2026).

We found no reliable published range for incorporation fees; the spend is mostly professional time. Timelines are better documented: 7 to 15 business days to incorporate through the SPICe+ form, and 4 to 8 weeks from documents to a live company when directors are foreign, according to a consultancy that sells the service (Treelife, undated).

Recurring items to budget for:

• A director who was resident in India for at least 182 days in the previous year (TaxAJ, Oct 2026). If no one in your team qualifies, you pay for a resident director from day one.
• Form FC-GPR within 30 days of share allotment, and the annual FLA return by 15 July (same source).
• Transfer-pricing documentation once international transactions exceed ₹1 crore, which a GCC billing its parent crosses quickly (Bar & Bench, Jun 2026). Under the Income-tax Act 2025 the TP report is now Form 48.
• GST registration and a Letter of Undertaking (LUT) filed each financial year, so services to the parent can be exported without paying IGST (TaxAJ, Oct 2026).
• State levies such as professional tax. In Telangana it is ₹200 a month on salaries above ₹20,000 (same source).

One small offset: pre-incorporation expenses can be capitalized as equity, up to 5% of authorized capital or US$500,000, whichever is lower, for an automatic-route subsidiary (Sagus Legal via Legal 500, Oct 2026).

Workspace: rents by city

Published rents disagree because sources measure different things, so check the definition before comparing cities.

All figures are in ₹ per square foot per month.

The Bengaluru row shows the problem: 95 and 132.6 describe the same city, from different sources using different definitions. Hyderabad's high vacancy gives tenants room to negotiate. Estimates of what a Tier-2 city saves overall also vary, from 10% to 35% in one JLL release (JLL, Feb 2026) to 25% to 50% in another JLL paper (JLL, 2026). For a fuller comparison, see best cities for a GCC in India.

Budget separately for fit-out, deposits and maintenance, which these rent figures don't include. If you are weighing an SEZ, units that started after 31 March 2020 get no income-tax holiday; SEZs still offer GST-free procurement and duty-free imports but add approvals and reporting (TaxAJ, Oct 2026). Under BOT, make sure the lease can be assigned to you at transfer (Morgan Lewis, Mar 2025).

Salaries by level and city

These bands come from recruiters, aggregators and GCC providers and sometimes conflict. Use them for a first model only.

AIM Research puts the GCC median at ₹18.4 LPA (AIM Research, 2026). At the top end, senior AI pay at GCCs reaches about ₹1.08 crore (Telangana Today, Oct 2026).

Most published bands are for Bengaluru, so get a current benchmark for other cities. These are salaries, not loaded cost: employer contributions, benefits, equipment, recruiting and management overhead sit on top. On Wisemonk's US$25,000 to 80,000 range, 50 engineers would cost US$1.25 million to 4 million a year (Wisemonk, Oct 2026).

Increments and attrition

Pay rises compound, and they vary sharply by skill. Zinnov's FY26 data puts the average GCC increment at 9.8%, flat for two years. ER&D roles averaged 10.8% and non-ER&D roles 7.5%, while AI/ML reached 21.1%, cybersecurity 20.0% and cloud 16.1% (Zinnov, 2026). An AI-heavy team's payroll can therefore grow about twice as fast as a general engineering team's.

Attrition figures depend on who is counting. Zinnov reports overall GCC attrition of about 16%, 16.5% among high performers and 10.9% in the first year, and says Tier-II cities report attrition 10% to 15% lower (same source). Coverage of EY's GCC Pulse Survey 2025 reported a much lower 9%, down from 13% in 2023 (EY, Nov 2025). Plan for the higher figure, and budget for backfill recruiting and ramp-up time.

BOT fees compared with a captive build

A captive means you set up and run the subsidiary yourself. Under Build-Operate-Transfer, a partner builds and runs the centre, then hands it to you. The fee structure usually follows the phases: design and build are often fixed-fee, the operate phase is often priced per FTE, and the transfer may carry employee transfer fees or facility usage fees (Morgan Lewis, Mar 2025). During operate, providers typically describe pass-through costs plus a management fee. Cost-plus billing, where the Indian subsidiary charges its parent cost plus a markup, applies mainly after transfer or in a captive.

The published totals below are all vendor figures and cover different scopes and durations, so they are not directly comparable.

BOT is often more expensive per head during operate because of partner fees and dual governance (eCorpIT). What it buys is time and a lower upfront commitment. Vendors quote 8 to 12 weeks for a BOT build (Wisemonk, Oct 2026) or 8 to 16 weeks to first hires, against 16 to 24 weeks to a first hire plus entity setup for a captive (eCorpIT, Aug 2026).

When you compare BOT quotes, ask for:

• The split between pass-through cost and margin in the operate fee, and how the fee steps down as headcount grows.
• The transfer-fee formula, and whether it is fixed or tied to headcount or book value.
• Whether the provider's capital gains tax on the transfer is already priced in. One law firm advises building it into the BOT fee from the start (Bar & Bench, Jun 2026).
• Who carries gratuity and notice-period liabilities at transfer.

Our comparison of BOT, captive, EOR and outsourcing covers the non-cost trade-offs.

Hidden costs that change the total

These rarely appear in a first budget, and several changed with 2025 and 2026 legislation.

Tax on the cost-plus margin

Once the subsidiary bills its parent at cost plus a markup, that markup is taxable profit in India. Budget 2026-27 merged IT services, ITeS, KPO and contract software R&D into one safe-harbour category with a 15.5% margin on operating cost, raised the eligibility threshold from ₹300 crore to ₹2,000 crore, and allows the same margin for up to five years (Taxmann, Feb 2026). As of November 2026 the effective date is contested: TaxAJ says the rules apply from 1 April 2026 via Form 49 (TaxAJ, Oct 2026), while a KPMG note treated them as draft rules for tax year 2026-27 (KPMG, undated). That margin is taxed in India at a domestic company rate of 22% to 30% plus surcharge and cess (Bar & Bench, Jun 2026). More in our safe harbour explainer.

GST cash flow

Services to the parent are zero-rated exports when the IGST conditions are met, and input tax credit is reclaimed through refund applications (TaxAJ, Oct 2026). Refunds tie up cash until they are processed. A branch office is worse: its services to the head office do not count as exports at all (same source).

Labour-code changes

India's four labour codes took effect on 21 November 2025 (Lakshmikumaran & Sridharan), and the Central Rules followed on 8 May 2026 (Business Today, May 2026). The codes' wage definition changes the base for provident fund and gratuity, so salary structures designed under the old laws may cost more or less than planned. Model your pay structure under the new definition with counsel.

Permanent establishment risk

In a BOT, a partner that negotiates or concludes contracts for you can create a taxable presence for your foreign company in India (Sagus Legal via Legal 500, Oct 2026).

Transfer-time costs

A slump sale carries heavier tax and stamp duty than a share purchase (Wisemonk), and valuation disputes over assets, employees and IP can delay the handover (IMC via Legal 500, May 2026). See share purchase vs slump sale.

Data protection

The DPDP Rules' core obligations, including notice, consent, security safeguards and breach notification, apply from about 13 to 14 May 2027 (Storyboard18, Nov 2025), so budget for the work in year one.

Incentives that can offset costs

State GCC policies can reduce rent and payroll costs. Karnataka offers rent support of up to 50% (capped at ₹2 crore a year, for one year) and EPF reimbursement of ₹3,000 per employee per month for two years (Outlook Business, Dec 2025).

Telangana has no notified GCC policy as of November 2026. Large GCCs negotiate incentives case by case through an MoU, and a policy may be announced at the Invest Telangana Global Summit on 7 to 9 December 2026 (TaxAJ, Oct 2026; Telangana Today, Nov 2026). Don't put Hyderabad incentives in a business case until they are in writing.

How Onfocus can help

Onfocus already recruits and runs engineering teams in India for clients in fintech, banking and Web3, so salary and hiring benchmarks are part of our day-to-day work. We can build a cost model for your GCC on the same assumptions for a captive and a BOT route, for the cities you are considering. Talk to us about your 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

How much does it cost to set up a GCC in India?

Figures published by GCC providers range from about US$200,000 for a 20 to 50 person pilot captive to US$6 million to 12 million or more for a centre of 300-plus people. These are vendor figures and should be treated as indicative.

Is BOT cheaper than building a captive GCC?

Usually not per head during the operate phase, because partner fees and dual governance add cost. What BOT buys is speed and a lower upfront commitment: vendors quote 8 to 16 weeks to first hires, against 16 to 24 weeks plus entity setup for a captive.

What do GCC engineers earn in India?

Sourced bands run from ₹6 to 12 LPA at entry level in Tier-1 cities to ₹48 to 70 LPA for a lead in Bengaluru, with Tier-2 cities 10% to 30% lower. These are salaries, not fully loaded cost.

What is office rent for a GCC in Hyderabad?

Anarock put Hyderabad's 2025 average at ₹72 per sq ft per month, and CRE Matrix reported a Q1 CY26 market rent of ₹76.8. Prime Grade A space runs ₹95 to 115, and vacancy was 24.2%, the highest of the major cities.

What are the hidden costs of a GCC in India?

The main ones are tax on the cost-plus margin, GST refund cash flow, and labour-code changes to the wage base for provident fund and gratuity. Under BOT, add permanent establishment risk and transfer-time tax and stamp duty, plus DPDP compliance work before May 2027.