How to set up a GCC in India: a step-by-step checklist
How to set up a GCC in India in 2026: a 14-step checklist from mandate and entity to FDI filings, GST, transfer pricing, hiring, labour codes, DPDP and scaling.
By Onfocus editorial team. Published . 10 min read.
To set up a Global Capability Centre (GCC) in India, a foreign company defines the centre's mandate, chooses an operating model, incorporates a wholly owned subsidiary under India's automatic route for foreign investment, and completes its RBI, tax and GST filings. It then puts an intercompany transfer-pricing agreement in place, picks a city and an office, hires, and builds compliance with the new labour codes and the DPDP Act before scaling.
A captive built from scratch typically takes 6 to 12 months to become operational, according to one provider (Wisemonk, Oct 2026). A Build-Operate-Transfer (BOT) partner can get you to first hires in 8 to 16 weeks, according to another (eCorpIT, Aug 2026). Both are vendor estimates. The checklist below follows the order most companies work in, though several steps run in parallel.
The checklist at a glance
- Define the mandate and the business case
- Choose the operating model
- Choose the legal entity and incorporate
- Complete FDI and RBI filings
- Set up tax registrations
- Register for GST and file the LUT
- Put transfer pricing in place
- Choose the city
- Secure the workspace
- Hire the team
- Comply with the labour codes
- Prepare for the DPDP Act
- Set up governance
- Scale, and plan the transfer if you use BOT
1. Define the mandate and the business case
Start with what the centre will own: engineering, data and AI, finance operations, or a mix. Decide whether it is a delivery outpost or a hub that owns products and decisions. Zinnov and Nasscom classify India's GCCs as 13% outposts, 43% satellites, 39% portfolio hubs and 5% transformation hubs (Zinnov, 2026).
You will be joining a large market. India had 2,117 GCCs employing about 2.36 million people in FY26 (same source). Yet about two-thirds of the Forbes and Fortune Global 2000 still have no India GCC, according to the Finance Minister (PSU Watch, Jul 2026). Write down a target headcount for years one and three, the skills mix and a cost ceiling. Our GCC setup cost guide has the inputs.
2. Choose the operating model
You have four broad options:
| Model | Who employs the team | Speed to start | Fits |
|---|---|---|---|
| Captive (your own subsidiary) | You, from day one | Slowest | Firms with India experience, IP-sensitive work, stable volume |
| Build-Operate-Transfer | Partner during operate, you after transfer | Weeks to a few months | A committed scale-up without India experience |
| Employer of Record (EOR) | The EOR is the legal employer | Days to weeks | Small pilots |
| Outsourcing or managed services | The vendor | A few weeks | Capacity rather than a capability you own |
The speed and fit descriptions come mostly from providers (ANSR, Jun 2026; Wisemonk), so read them as indicative. If you choose Build-Operate-Transfer, pick the structure at the outset: an asset-based transfer, a provider-owned entity with a call option over 100% of the shares, or a joint venture you buy out (Morgan Lewis, Jun 2024). Our model comparison goes deeper.
3. Choose the legal entity and incorporate
The standard vehicle is a wholly owned subsidiary set up as a private limited company under the Companies Act 2013 (Sagus Legal via Legal 500, Oct 2026). It is also the usual end-state for BOT, because equity transfers cleanly (IMC via Legal 500, May 2026).
Other routes exist but rarely fit. An LLP can take foreign investment under the automatic route only in sectors with 100% automatic FDI and no performance conditions. BFSI centres sometimes use a GIFT City IFSC unit (Sagus Legal). A branch office needs RBI approval through an authorized dealer bank, and its services to the head office do not qualify as GST exports (TaxAJ, Oct 2026).
Incorporation through the SPICe+ form takes 7 to 15 business days, or 4 to 8 weeks from documents to a live company when directors are foreign, according to a consultancy (Treelife, undated). At least one director must have been resident in India for 182 days or more in the previous year (TaxAJ, Oct 2026). Pre-incorporation expenses can be capitalized as equity, up to 5% of authorized capital or US$500,000, whichever is lower (Sagus Legal).
4. Complete FDI and RBI filings
IT and ITeS allow 100% foreign direct investment under the automatic route, with no prior government approval and post-facto reporting to the RBI (TaxAJ, Oct 2026). File Form FC-GPR within 30 days of allotting shares, and the annual FLA return by 15 July (same source). Investors from countries that share a land border with India have needed government approval under a 2020 rule (Press Note 3), which we understand is still in force; check with counsel if it could apply to you.
Classify every inflow from the parent as equity, reimbursement or operational funding, and report it accordingly. Mismatches between contract terms and actual fund flows cause delays at the authorized dealer bank (IMC via Legal 500, May 2026).
5. Set up tax registrations
The Income-tax Act 2025 replaced the 1961 Act from 1 April 2026, so section numbers and forms have changed. The R&D deduction, for example, is now section 45 (Bar & Bench, Jun 2026). The domestic company rate is 22% to 30% plus surcharge and cess. Choosing the concessional regime may forfeit the R&D deduction, so decide early (same source).
State taxes apply too. In Telangana, professional tax is ₹200 a month on salaries above ₹20,000 (TaxAJ, Oct 2026).
6. Register for GST and file the LUT
Services to the overseas parent are zero-rated exports if the IGST Act conditions are met, including payment in convertible foreign exchange. CBIC Circular 161/17/2021-GST confirms that a subsidiary and its foreign parent are not merely establishments of one person, so related-party status doesn't block export treatment (TaxAJ, Oct 2026).
File a Letter of Undertaking (LUT) every financial year so you can export without paying IGST, and claim input tax credit refunds through form RFD-01 (same source). Budget 2026 also removed the intermediary place-of-supply rule, which restores export status for many support-service GCCs that had faced intermediary disputes. Its effective date is reported as either 30 March or 1 April 2026 (BDO, Feb 2026; Rödl and Partner, Feb 2026).
7. Put transfer pricing in place
Sign an intercompany services agreement before the first invoice. A captive typically bills its parent at cost plus a markup, and transfer-pricing documentation is required once international transactions exceed ₹1 crore, with TNMM the usual method (Bar & Bench, Jun 2026).
Budget 2026-27 created a single safe-harbour category for IT services, ITeS, KPO and contract software R&D, with a 15.5% margin on operating cost, an eligibility threshold of ₹2,000 crore and the option to lock in for up to five years (Taxmann, Feb 2026). As of November 2026 the effective date is contested: TaxAJ says 1 April 2026, opted into via Form 49, while a KPMG note treated the rules as draft (TaxAJ, Oct 2026; KPMG, undated). The TP report is now Form 48. Details are in our safe harbour explainer.
8. Choose the city
Bengaluru and Hyderabad dominate new activity. Of new US-headquartered GCCs in 2025, 42% went to Hyderabad and 35% to Bengaluru, with Pune and Chennai at 8% each (Storyboard18, Dec 2025). For hiring, Bengaluru takes 30% of GCC hires in 2026, Hyderabad 15% and Pune 12%, while Tier-2 cities combined take 15%, up 23% year on year (Business Today, Jul 2026).
Incentives differ by state. Karnataka, Maharashtra, Gujarat, Uttar Pradesh and others have GCC policies (Outlook Business, Dec 2025). Telangana has no notified GCC policy as of November 2026; large GCCs negotiate 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). See best cities for a GCC in India.
9. Secure the workspace
GCCs leased a record 31 million sq ft of office space in 2025 (JLL, Feb 2026). Supply is still available: Hyderabad's vacancy was 24.2% in Q1 CY26, against 11.3% in Chennai (CRE Matrix, Jul 2026).
Decide on SEZ or non-SEZ space. SEZ units that started after 31 March 2020 get no income-tax holiday, though SEZs still offer GST-free procurement and duty-free imports, with extra approvals and reporting. Many GCCs now lease non-SEZ space (TaxAJ, Oct 2026). Under BOT, make sure the lease can be assigned to you at transfer; SEZ bonding can affect timing (Morgan Lewis, Mar 2025).
10. Hire the team
GCCs are projected to hire 510,452 people in 2026, and AI and data roles make up 18% of that hiring, growing 38% (Business Today, Jul 2026). You will compete for the same people as established centres.
Hire leadership first: a site leader, an HR lead and the first engineering managers, who then build the team. Budget for annual increments averaging 9.8%, and far more for AI/ML roles at 21.1% (Zinnov, 2026). Plan for attrition of about 16%, Zinnov's overall figure, even if your first year is lower (same source).
11. Comply with the labour codes
All four labour codes took effect on 21 November 2025, replacing 29 central laws (Lakshmikumaran & Sridharan). Central Rules under the codes were notified on 8 May 2026 (Business Today, May 2026), but state rules are uneven, and Telangana's were still in draft as of October 2026 (TaxAJ, Oct 2026).
The codes change the wage definition used for provident fund and gratuity, and they affect fixed-term employment. Design salary structures, contracts and policies under the new rules from the start. In Telangana, IT and ITeS establishments are exempt from some Shops and Establishments Act provisions until 30 May 2028, subject to conditions, and minimum wages were revised from 1 June 2026 (TaxAJ). For BOT, see our guide to moving employees at transfer.
12. Prepare for the DPDP Act
The DPDP Rules were notified in November 2025 with a phased start (Storyboard18, Nov 2025). The Consent Manager rule applies from about 13 to 14 November 2026. The core obligations covering notice, consent, security safeguards, breach notification and retention apply from about 13 to 14 May 2027, and the older SPDI Rules stay in force until then (same source).
In our reading, a GCC is usually a processor for the parent's customer data and a fiduciary for its own employee and vendor data. Map your data flows, write the roles into your intercompany and BOT contracts, and have breach notification ready before May 2027. More in our DPDP guide for GCCs.
13. Set up governance
Appoint the board, adopt a compliance calendar covering company, FEMA, tax, GST and labour filings, and keep one set of records. IMC lists compliance divergence, where payroll, contract or FEMA records split between operator and parent, as a core BOT risk, alongside dependency on the operator and valuation disputes (IMC via Legal 500, May 2026).
Watch for permanent establishment risk. A BOT partner that negotiates or concludes contracts for your foreign company can create a taxable presence in India (Sagus Legal via Legal 500, Oct 2026). Keep contracting authority with the parent and document the partner's independence.
14. Scale, and plan the transfer if you use BOT
Once the core team is stable, add capabilities and consider a second city. Tier-2 cities are 15% of GCC hiring in 2026 and growing 23% a year (Business Today, Jul 2026), though mid and senior talent there is reported to be thinner. A national GCC framework was announced in the Union Budget 2025-26, but as of November 2026 it has not been formally notified as far as we can find (Outlook Business, Jan 2026).
Under BOT, providers describe an operate phase of 18 to 36 months before transfer (eCorpIT, Aug 2026). Start transfer preparation mid-operate. The usual sequence is the share transfer, then contract assignment, IP migration and employee onboarding under parent governance (IMC). Our article on share purchase vs slump sale covers the transfer itself.
Rough timeline
These are vendor estimates and vary with headcount, city and how quickly decisions are made.
| Milestone | Captive (own subsidiary) | BOT |
|---|---|---|
| Company incorporated | 7 to 15 business days via SPICe+; 4 to 8 weeks with foreign directors (Treelife) | Handled by the partner |
| First hires | 16 to 24 weeks plus entity setup (eCorpIT, Aug 2026) | 8 to 16 weeks (eCorpIT) |
| Operational | 6 to 12 months (Wisemonk, Oct 2026) | Build in 8 to 12 weeks (Wisemonk) |
| Transfer to you | Not applicable | After 18 to 36 months of operate (eCorpIT); Wisemonk says 2 to 3 years |
Where to start
Onfocus is based in Hyderabad and already recruits and runs engineering teams in India for clients in fintech, banking and Web3, alongside a graduate training program. We can work through this checklist with you, from operating-model choice to hiring, and set up a centre under Build-Operate-Transfer if that suits your plans.
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 long does it take to set up a GCC in India?
- One provider estimates 6 to 12 months for a captive to become operational, while BOT providers quote 8 to 16 weeks to first hires. Incorporation alone takes 7 to 15 business days via SPICe+, or 4 to 8 weeks with foreign directors.
- What legal entity should a foreign company use for a GCC in India?
- The standard vehicle is a wholly owned subsidiary set up as a private limited company under the Companies Act 2013. Branch offices need RBI approval, and their services to the head office do not qualify as GST exports, so they rarely fit.
- Is 100% FDI allowed for a GCC in India?
- Yes. IT and ITeS allow 100% foreign direct investment under the automatic route with no prior government approval. You report to the RBI afterwards, filing Form FC-GPR within 30 days of allotting shares.
- Is a GCC's service to its parent an export under GST?
- Yes, if the IGST Act conditions are met, including payment in convertible foreign exchange. File a Letter of Undertaking each financial year to export without paying IGST.
- Which compliance deadlines matter for a new GCC?
- The four labour codes have applied since 21 November 2025, with Central Rules notified on 8 May 2026. The DPDP Rules' core obligations apply from about May 2027, and the annual FLA return is due by 15 July.