Global Capability Centres in India: Setup & Advisory
Practical advisory for international businesses establishing or expanding India GCC operations — structure, location, transfer pricing, governance and cross-border alignment.
India has become the world’s leading destination for Global Capability Centres. More than 1,700 GCCs currently operate across India, generating an estimated USD 64.6 billion in revenue in FY2024 and projected to reach USD 99–105 billion by 2030. International businesses across technology, financial services, healthcare, manufacturing, retail, engineering and professional services are establishing India GCCs to access deep talent pools, build scalable operational capability and integrate global business functions at a cost and quality level difficult to replicate elsewhere.
Setting up a GCC, however, is not simply a hiring exercise. The corporate structure, operating model, transfer pricing, location, governance framework, intercompany agreements and cross-border alignment with the parent group all determine whether the centre delivers what the business needs — and whether it can scale without creating tax, regulatory or operational problems as it grows. Each of the service areas below addresses one component of that decision.
Common Mistakes in GCC Setup
Most GCC problems do not appear during setup. They emerge six to eighteen months in — when a transfer pricing audit raises questions, when the talent pipeline turns out not to be available, or when the governance framework is too thin to manage the centre at scale.
Treating the GCC as a hiring exercise rather than a structuring decision
A GCC is a legal entity with its own corporate obligations, tax position, transfer pricing requirements, governance framework and intercompany contracts. Businesses that focus on headcount before resolving the structural questions build a centre that works in year one but creates avoidable compliance, tax and governance problems.
Setting up the corporate structure without confirming the transfer pricing model
The intercompany arrangement — cost-plus, cost-sharing or another model — determines how profits are allocated, how the GCC is priced for Indian tax and what documentation is required from day one. A GCC incorporated without a confirmed transfer pricing position is building a structure that must be retrofitted later, at far greater cost.
Selecting a location based on cost without testing talent availability
India's talent landscape differs significantly between cities, between districts and between function types. A lower-cost city that cannot supply the required senior leadership, specialist skills or scalable workforce at the required quality will cost significantly more in the medium term than a higher-cost city that can.
Choosing the wrong operating model for the function being offshored
Captive GCC, shared services centre, centre of excellence, build-operate-transfer and managed services each serve different purposes and carry different implications for control, cost, IP ownership, governance and scalability. Selecting a model based on what a peer used is a common source of structural misalignment.
Underestimating permanent establishment risk
Where GCC employees perform substantive business functions, or where parent group personnel regularly conduct business in India, there may be PE exposure for the parent entity. PE risk creates Indian tax liability on the parent's Indian-sourced income and should be assessed before the operating model and governance framework are fixed.
Building a governance framework that is too thin to manage scale
A GCC of ten people can be managed informally; a GCC of three hundred requires documented governance — escalation protocols, decision rights, board oversight, audit and compliance functions. Businesses that do not design governance for scale find the absence becomes visible, and expensive, exactly when the centre is most critical.
Not documenting IP ownership and work product arrangements from the outset
Where the GCC creates software, processes, methodologies, data models or other IP, the ownership and the terms on which it is licensed or assigned to the parent must be documented. Unresolved IP arrangements create legal ambiguity, transfer pricing exposure and complications at fundraising, restructuring or exit.
Assuming the India structure aligns with the parent group without reviewing both sides
Where the GCC sits within a wider group — a holding company in one jurisdiction, an operating company in another, a GCC in India — the intercompany arrangements, tax treatment and governance must be consistent across all levels. Designing the India structure in isolation is a common source of transfer pricing inconsistency and PE exposure.
Where We Advise
Five advisory areas covering the full range of input required to establish and run a GCC in India effectively.
India GCC Structures
This page covers the five principal GCC operating models — captive subsidiary, shared services centre, centre of excellence, build-operate-transfer and managed services — what each supports, what it does not, and how to choose based on function, control and scalability rather than convention.
Learn moreIndia GCC Location & Incentive Strategy
India's major GCC hubs — Bengaluru, Hyderabad, Pune, Chennai, Mumbai, the NCR — differ materially in talent, infrastructure, cost and incentives. This page covers how to evaluate location against the function being offshored, the talent pipeline required and the incentive frameworks available.
Learn moreIndia GCC Tax, Transfer Pricing & Structuring
Transfer pricing is a structuring decision, not a compliance afterthought. This page covers the cost-plus model, cost-sharing arrangements, PE risk, GST on intra-group services, withholding tax, SEZ considerations and how the India tax position must align with the parent group's structure.
Learn moreIndia GCC Operational & Workforce Planning
A GCC is a functioning business operation, not a staffing agency. This page covers how to sequence GCC build-out, structure the workforce for the function being offshored, design governance for scale and manage the operational relationship between the Indian centre and the international parent.
Learn moreIndia–UAE GCC Structures
For UAE-headquartered businesses using India as a capability destination, the GCC structure must align with the UAE holding or operating entity on transfer pricing, POEM risk, FEMA compliance, ownership and governance. This page covers the cross-border considerations specific to UAE–India GCC arrangements.
Learn moreWhat GCC Setup Actually Involves
Build-Operate-Transfer: When It Works and When It Does Not
A Build-Operate-Transfer arrangement allows an India-based partner to build the GCC and transfer it after an agreed period, often 18 to 36 months. BOT can reduce initial setup risk and accelerate entry, but the model must be tested carefully. During the build phase, employees usually sit with the BOT partner, raising issues around talent loyalty, IP ownership, competitor conflicts and handover readiness. BOT works best for defined, repeatable functions with genuine timeline pressure. It is less suitable for core IP, sensitive functions or centres that must be governance-ready from day one.
Sequencing the Buildout: What Has to Happen Before Hiring
One of the most common GCC setup errors is hiring before the entity structure, intercompany agreements and transfer pricing model are settled. Early hiring may create momentum, but it can also lead to retroactive TP documentation, governance gaps and employment restructuring once the centre is live. The stronger sequence is: incorporate the entity, confirm the transfer pricing model, execute intercompany agreements, hire leadership, build the team and then scale. Leadership selection is strategic too — parent expats support integration, local hires accelerate execution, and returning diaspora may offer both.
Governance Design: Building for Future Scale
A GCC with 15 people can operate informally; a GCC with 100 or 300 cannot. Governance should be designed for the centre the group intends to build, not only the centre being launched. This includes board oversight, decision rights, escalation protocols, performance metrics, reporting cadence and alignment with parent-group strategy. A governance model that is adequate at launch but fails at scale will usually need correction at the most disruptive stage — when the GCC has already become operationally critical.
Transfer Pricing and Tax
Every GCC providing services to a parent or related group entity requires a defensible transfer pricing position. The intercompany arrangement should cover the service scope, pricing model, cost allocation, markup and supporting documentation before services begin. Indian transfer pricing rules require arm’s length pricing and contemporaneous documentation. GST, withholding tax and permanent establishment risk may also arise depending on the operating model, cross-border payments and involvement of parent-group personnel in India.
Cross-Border Alignment for Parent Groups
A GCC should be structured in the context of the parent group’s wider holding, tax and operating model, not as a standalone India exercise. Intercompany arrangements, governance, tax treatment, reporting and banking documentation must remain consistent across the group, whether the parent is in the UAE, Europe, Asia, North America or elsewhere. For UAE-connected groups, additional issues may include POEM risk, FEMA compliance, India–UAE DTAA treatment and banking documentation across both jurisdictions.
A Centre That Performs at Scale
We assist international businesses, regional groups and family offices in establishing, structuring and scaling Global Capability Centres in India. Our advisory covers the full range of decisions involved in GCC setup — from the initial structural and operating model assessment through to transfer pricing, location strategy, governance design and cross-border alignment with the parent group, including coordination with the on-ground execution team and BOT partners where applicable.
An ATB engagement on GCC advisory gives businesses a clear view of the structure and operating model best suited to the functions being offshored and the parent group’s commercial plan. We address transfer pricing and intercompany arrangements before operations begin, recommend locations based on talent, incentives and operational requirements, design governance for future scale, align the India GCC with the wider group structure, coordinate with execution and BOT partners, and support post-establishment reviews covering transfer pricing, governance, compliance and operational alignment.
India GCCs — Answered
A Global Capability Centre is a captive operational unit established by an international business in India to deliver specific business functions — technology, finance, analytics, engineering, operations, compliance, research or shared services. Unlike outsourcing, a GCC is owned and controlled by the parent business rather than a third-party service provider. This means the parent retains IP ownership, management control, workforce integration and institutional knowledge within the group. GCCs are used by businesses that want the cost and talent advantages of India-based operations without the commercial, IP and governance risks of third-party outsourcing.
India has the world’s largest pool of English-speaking technical and professional talent, with deep capabilities across software engineering, financial analysis, data science, actuarial services, legal support, compliance, operations and research. More than 1,700 GCCs currently operate in India, generating an estimated USD 64.6 billion in revenue in FY2024 — projected to reach USD 99–105 billion by 2030. Beyond talent and cost, India offers established GCC ecosystems in multiple cities, a mature vendor infrastructure, a legal framework that supports IP ownership and a regulatory environment that, while complex, is navigable with proper planning.
Most international businesses establish their India GCC as a wholly owned private limited subsidiary of the parent group. This structure supports foreign direct investment, employee hiring, customer contracts, IP ownership, equity participation and transfer pricing documentation. Within that corporate form, the operating model — captive, shared services centre, centre of excellence, build-operate-transfer or managed services — determines how the centre functions, how costs are allocated and how governance is structured. The operating model and the corporate structure are related but separate decisions and should be confirmed together before the GCC is established.
Transfer pricing is one of the most consequential decisions in GCC setup. Every GCC that provides services to its parent or related group entities has a transfer pricing position that determines how the centre is priced for Indian tax purposes, how profits are allocated and what documentation is required. India’s transfer pricing rules require arm’s length pricing and contemporaneous documentation from the first transaction. A GCC that begins operations without a confirmed transfer pricing model and signed intercompany agreements will need to address this retrospectively — significantly more complex and higher-risk than getting it right at the outset.
The right location depends on the specific function being offshored, the talent profile required, the leadership pipeline available, the infrastructure needs, the applicable incentive frameworks and the long-term scalability of the workforce. Bengaluru, Hyderabad, Pune, Chennai, Mumbai and the NCR each have distinct talent profiles, cost structures and ecosystems suited to different function types. Tier-2 cities — Kochi, Coimbatore, Ahmedabad, Jaipur and others — are increasingly relevant where the major hubs are capacity-constrained. Location selection should be grounded in the requirements of the centre, not in where peers have located.
No. GCCs are increasingly being established by mid-sized international businesses, regional groups, private equity-backed companies, financial services firms, healthcare groups, manufacturing businesses and family offices. The threshold for GCC viability has reduced significantly as India’s ecosystem has matured — it is now practical for businesses planning centres of fifty to one hundred people, not only those planning for five hundred or more. The structure, operating model and governance framework should be scaled to the size and pace of the intended buildout, but the core advisory considerations apply regardless of size.
Permanent establishment risk arises when the activities of a GCC, or of parent group personnel in India, create a taxable presence in India for the overseas parent entity. This can happen where GCC employees perform substantive business functions on behalf of the parent — negotiating contracts, making commercial decisions, providing services directly to third-party customers — or where parent company executives regularly conduct business in India. PE exposure creates Indian corporate tax liability on the parent’s Indian-sourced income. It should be assessed when the operating model and governance framework are being designed, not after the centre is operational.
Yes. Reviewing existing GCC structures is a significant part of what we do. Businesses come to us when a transfer pricing audit has raised questions, when the intercompany arrangement has not kept pace with how the centre has evolved, when governance gaps have become visible as the centre has grown, when a new investor or acquirer has flagged structural concerns, or when the parent group’s structure has changed. A review covers the corporate structure, the transfer pricing and intercompany arrangement, the governance framework, the tax and compliance position and the cross-border alignment with the parent group. Where changes are needed, we advise on how to sequence them with minimal disruption.
India market entry advisory covers the full range of questions involved in establishing a commercial presence in India — entity selection, foreign investment route, sector approvals, FEMA compliance, tax and banking. GCC advisory is more specialised. A GCC is a captive capability centre delivering specific functions to a parent group, which means the transfer pricing model, the intercompany service agreement, the operating model selection, the governance framework and the talent and location strategy are all specific to GCC operations and not addressed by general market entry advisory.
Timelines vary by operating model, location and function type. A captive subsidiary with a defined scope can typically be incorporated within four to six weeks. Regulatory registrations, bank account opening, office setup and the first hiring cohort typically add three to four months for a basic operational start. A fully operational centre with a defined leadership structure, governance framework, intercompany agreements and initial team typically takes six to nine months from the decision to proceed. The structuring, transfer pricing and intercompany documentation should be completed before operations begin, not in parallel with the first hires.
Build a centre that scales — not one that unwinds at the first review.
Whether you are planning a first India GCC or reviewing one already running, we will get the structure, transfer pricing and governance right before the problems appear. Talk to our team when you are ready.
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