Approvals and set-up
Does a foreign group need government approval to open a GCC in India?
Usually not. IT, ITeS, BPM, engineering, R&D and consulting services are not listed in the FDI policy, so they take 100% FDI under the automatic route. The company reports after the event, for example by filing Form FC-GPR within 30 days of issuing shares. The exception is a land-border investor: if an investor or its beneficial owner is from a country sharing a land border with India, the government route applies, although non-controlling ownership within 10% can use the automatic route after prior reporting on the FIF/NSWS portal. See land-border investors.
How long does it take to make a GCC operational?
Only a few steps have deadlines fixed by rule: shares must be allotted within 60 days of receiving funds, FC-GPR filed within 30 days of issue, and commencement of business declared within 180 days of incorporation. Low-risk applicants can obtain GST registration in three working days. IMC’s stated timeline is “typically operational in 90 to 120 days, subject to approvals”. Office readiness, state incentive registration and hiring usually set the pace. See the set-up roadmap.
What legal entity should a GCC use?
Most GCCs are wholly owned private limited companies. These need at least two shareholders and two directors, one meeting the 182-day residence test. A branch office may carry out consultancy and research for the parent but is taxed at 36.40–38.22% effective, against 25.168% for a subsidiary under the concessional regime. A liaison office may not carry on business. See entry vehicles.
Can we start without setting up an entity?
Yes. A group can engage staff through a third-party employer of record or a managed-team provider without forming an entity, and no approval is needed. The trade-off is permanent establishment risk if the parent controls the Indian work. See operating models.
Operating models
What is the difference between GCC as a Service, BOT and managed teams?
Under GCC as a Service the group owns the entity from day one and a provider handles set-up and operations; it suits a long-term commitment. Under build–operate–transfer a provider builds and runs the centre and then transfers ownership; it suits first-time entrants. Under managed teams a provider employs a team working as an extension of the group, which keeps strategic direction; it suits speed and flexibility. See operating models.
Is a small first site viable?
Yes. The Economic Survey 2025-26 credits mid-sized and emerging multinationals with widening the GCC base, and entry thresholds can be modest. Some state incentives, however, have job or size thresholds, such as Tamil Nadu’s 200 direct jobs and Uttar Pradesh’s Level-1 entry at ₹15 crore of investment or 100 employees outside Gautam Buddha Nagar and Ghaziabad.
Tax
How is a GCC paid, and what margin should it earn?
A captive usually charges its parent cost plus an arm’s-length margin under an inter-company services agreement. For software development, ITeS, KPO and contract R&D, a single safe harbour of 15.5% on cost is available to taxpayers with revenue up to ₹2,000 crore. Approval is automated and the option can run for five years. Higher-value R&D or AI work may attract a higher margin claim, so such centres should benchmark annually or seek an APA.
How quickly can an APA be concluded?
Budget 2026-27 announced a fast-track for unilateral APAs for IT services, aiming to conclude them within two years, extendable by six months. Associated enterprises may file modified returns after an APA. See tax and transfer pricing.
Can the GCC create a taxable presence for the parent?
It can. In Hyatt International (25 July 2025) the Supreme Court found a fixed place PE where the foreign group controlled the Indian operations. Keep decision rights with the Indian entity, document secondee roles and reporting lines, and review arrangements where the parent directs Indian staff.
Are a GCC’s services to its parent exports for GST?
The Finance Act 2026 removed the special place-of-supply rule for intermediary services from the IGST Act, so these services follow the general rule and can qualify as exports. Check the position for each service line.
People and incentives
What do the Labour Codes change for a GCC?
The four codes, in force from 21 November 2025, replace 29 laws. Every employee needs a written appointment letter; fixed-term employees get the same benefits as permanent staff and gratuity after one year; minimum wages apply to all workers; and a single registration, licence and return replace multiple filings. State rules also apply. See people and hiring.
What incentives can a GCC claim?
Centrally, the ELI scheme pays employers up to ₹3,000 a month for each additional job sustained for at least six months, for jobs created up to 31 July 2027. At state level, Karnataka, Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat and Odisha run GCC-specific policies covering capital, rent, payroll, EPF or power costs. Conditions include domicile, salary thresholds and lock-ins such as Maharashtra’s 10-year operating period. See locations.
Can a GCC serve group financial-services operations from GIFT City?
Yes. IFSCA approved Global In-House Centre Regulations on 22 December 2025 for units in GIFT IFSC serving group financial-services operations. IFSC units can claim a 100% deduction of eligible income for 20 consecutive years out of 25.
When do data protection rules bite?
The DPDP Rules were notified on 13 November 2025 with a phased start. The Data Protection Board began immediately, Consent Managers register from 13 November 2026, and notice, consent and breach-reporting duties apply from 13 May 2027. Penalties reach ₹250 crore for failing to take reasonable security safeguards.
What to check next
- Confirm the land-border position of every shareholder and beneficial owner.
- Choose the operating model before shortlisting cities and states.
- Test the centre’s functions against the safe harbour scope, or plan an APA.
- Check state incentive conditions (domicile, salary, job counts, lock-ins) against the hiring plan.
- Build a DPDP compliance plan against the November 2026 and May 2027 dates.