Why India for GCCs?
India is a preferred destination for Global Capability Centers (GCCs). Over 1,500 GCCs operate in India, employing more than 1.4 million people. Companies from the US, UK, and Europe choose India due to cost advantages, a skilled workforce, and a strong technology ecosystem.
Key Benefits of GCCs in India:
Lower Costs: 70% lower operational costs than the US and Europe. Companies save on salaries, rent, and operational expenses.
Large Talent Pool: India produces over 5 million STEM graduates annually. Skilled professionals are available in IT, finance, engineering, and customer support.
Government Support: SEZ (Special Economic Zone) benefits, GST exemptions, and corporate tax incentives encourage foreign investment.
Mature Ecosystem: Leading IT firms, startups, and multinational companies operate in India. The business ecosystem supports innovation and growth.
Best Cities for GCCs in India
Selecting the right city is important. Different cities offer different advantages.
Bangalore – Hub for IT, AI, and R&D. Strong startup culture. Large presence of multinational corporations.
Hyderabad – Lower costs, growing IT sector, strong government support. Home to major tech firms.
Pune – Skilled workforce in IT and engineering. Lower costs than Bangalore. Strong research institutions.
Chennai – Ideal for manufacturing and IT operations. Well-developed infrastructure and industrial hubs.
Mumbai – Financial hub. Suitable for banking, finance, and consulting GCCs. Headquarters of major financial institutions.
Gurgaon/Noida – Business-friendly policies. Close to Delhi and international airports. Rapidly growing corporate sector.
How to Set Up a GCC in India
Setting up a GCC requires choosing the right business structure and following legal steps.
1. Choose a Business Structure
Foreign companies have multiple options:
Wholly Owned Subsidiary (WOS) – Best for full control. Can engage in all business activities.
Branch Office – Suitable for market entry but restricted from direct trading or manufacturing.
Liaison Office – Limited to market research and coordination. Cannot earn revenue in India.
Most foreign companies choose a Private Limited Company due to full operational control and easier compliance.
2. Registration & Compliance
A. Company Registration
Apply for Name Approval – Submit a request using the RUN (Reserve Unique Name) form.
Register the Company – File the SPICe+ form with the Ministry of Corporate Affairs (MCA).
Obtain PAN and TAN – Essential for taxation and business operations.
Register for GST – Required if turnover exceeds the threshold limit.
Open a Bank Account – A business bank account is necessary for transactions.
Draft MOA & AOA – Documents defining the company’s objectives and rules.
Obtain Digital Signature Certificate (DSC) – Required for filing electronic forms.
B. RBI & FEMA Compliance
Report Foreign Investment – File Foreign Inward Remittance Certificate (FIRC) with RBI.
Follow FEMA Regulations – Ensure compliance with foreign exchange laws.
Annual Filing with RBI – Submit the Annual Return on Foreign Liabilities and Assets.
C. Tax & Payroll Setup
Register for EPF & ESI – Mandatory for companies hiring employees.
Deduct TDS – Ensure tax is deducted at the source for salaries and vendor payments.
File Corporate Tax Returns – Submit annual tax returns to the Income Tax Department.
Maintain Monthly Compliance – File GST, TDS, and corporate tax returns on time.
3. Office Space Selection
Finding the right office is crucial.
SEZ Office – Suitable for IT/ITES companies. Offers tax benefits. Required to export services.
Non-SEZ Office – No tax benefits but more flexibility in location and operations.
Co-working Spaces – Cost-effective for startups and small teams. Offers flexible lease terms.
Leased Office – Suitable for long-term stability and scalability. Allows customization of space.
Common Challenges & Solutions
1. Legal & Compliance Issues
Challenge: Complex Indian corporate laws and regulatory approvals.
Solution: Partner with local experts for legal and compliance support.
Additional Compliance: Follow industry-specific regulations like IT Act, Data Protection Laws, and GST rules.
2. Cultural & Operational Differences
Challenge: Differences in work culture, employee expectations, and business regulations.
Solution: Hire experienced Indian professionals and provide cross-cultural training.
Additional Considerations: Implement global HR policies that align with local labor laws.
3. Infrastructure & Office Space
Challenge: Finding an office that meets operational and budgetary needs.
Solution: Choose a city based on business objectives and employee availability.
Additional Factors: Consider factors like connectivity, public transport, and local amenities.
How BusinessSetup.in Can Help
We assist foreign companies in setting up GCCs in India by providing:
India Entry Consulting – Advice on choosing the best business structure.
Company Registration – End-to-end incorporation services, from name approval to GST registration.
Taxation & Compliance – Assistance with RBI, FEMA, GST, payroll, and tax filings.
Office Space Assistance – Help with finding the right location and lease negotiations.
Legal & HR Support – Guidance on employment contracts, labor laws, and compliance requirements.
Ongoing Compliance Management – Assistance with annual filings, audits, and regulatory updates.
Get Started Today
Expanding to India? We can help with your GCC setup. Contact BusinessSetup.in for expert guidance.
1. What is a Global Capability Center (GCC)?
A Global Capability Center (GCC), also known as a Global In-house Center (GIC), is a subsidiary established by multinational corporations to manage and execute specific business functions. These centers handle various operations, including IT services, research and development, engineering, finance, and customer support, aiming to leverage local talent, reduce operational costs, and enhance service efficiency.
2. Why should companies consider setting up a GCC in India?
India has emerged as a preferred destination for GCCs due to several strategic advantages:
Skilled Talent Pool: India produces over 5 million STEM graduates annually, offering a vast pool of skilled professionals in IT, engineering, finance, and more.
Cost Efficiency: Operational costs in India are significantly lower, with companies potentially saving up to 70% compared to Western countries.
Favorable Government Policies: The Indian government offers incentives such as tax benefits, Special Economic Zones (SEZs), and simplified regulatory frameworks to attract foreign investments.
Robust Infrastructure: Major Indian cities boast advanced infrastructure, including state-of-the-art IT parks and reliable connectivity, supporting seamless business operations.
3. What are the key steps involved in establishing a GCC in India?
Setting up a GCC in India involves several critical steps:
Define Objectives: Clearly outline the goals and functions of the GCC to align with the parent company’s vision.
Select the Business Structure: Choose an appropriate legal entity, such as a Wholly Owned Subsidiary (WOS), Branch Office, or Liaison Office, based on operational requirements.
Location Analysis: Evaluate potential cities considering factors like talent availability, infrastructure, cost, and proximity to clients.
Regulatory Compliance: Register the entity, obtain necessary licenses, and adhere to local laws and regulations.
Infrastructure Setup: Secure suitable office space, establish IT systems, and ensure necessary facilities are in place.
Talent Acquisition: Recruit skilled professionals through effective hiring strategies and partnerships with local recruitment agencies.
Operational Integration: Implement processes and systems that align the GCC’s operations with the parent company’s standards and practices.
4. Which Indian cities are ideal for setting up a GCC?
Several Indian cities have become hubs for GCCs due to their conducive business environments:
Bangalore: Known as the “Silicon Valley of India,” it offers a robust IT ecosystem and a large talent pool.
Hyderabad: Features a growing tech industry with competitive operational costs.
Pune: Hosts numerous IT and engineering institutions, providing access to skilled graduates.
Chennai: Offers strong infrastructure and is a hub for manufacturing and IT services.
Mumbai: As the financial capital, it’s ideal for finance and consulting services.
Gurgaon/Noida: Located near the national capital, these cities have a rapidly growing corporate presence.
5. How long does it typically take to establish a GCC in India?
The timeline for setting up a GCC in India varies based on factors like business structure, location, and regulatory approvals. Generally, the process can take between 6 to 12 months, encompassing market research, legal formalities, infrastructure setup, and talent acquisition.