US to India · GCC setup and operations
Setting Up a Global Capability Centre in India: A Guide for US Companies
A US company planning a Global Capability Centre (GCC) in India needs to make more than an incorporation decision. The operating model, Indian entity, hiring plan, intercompany agreements, intellectual property, transfer pricing and compliance calendar should fit together from the start.
Prepared by AU Corporate's CA-led advisory team · Published 12 October 2026 · General guidance; confirm the rules that apply to your specific activity.
Quick answer
How should a US company set up a Global Capability Centre in India?
First define the work the India team will perform and the level of control the US parent needs. Then compare an owned Indian subsidiary with an EOR, managed service or build-operate-transfer model. If an Indian entity is appropriate, confirm the FDI route, incorporate it, prepare intercompany and IP documents, set up payroll and accounting, and plan tax, company-law and foreign-investment compliance before operations begin.
1. Define the purpose of the India GCC
A GCC is a company-controlled team that performs work for the wider group. Depending on the business, that may include software engineering, product development, analytics, finance, research, cybersecurity, customer operations or internal business services.
Write down what the team will actually do before choosing a structure. For example, a team that develops software for the US parent may have a different contract and transfer-pricing profile from an India team that also sells to local customers or delivers regulated services.
- List the functions planned for the first 12–24 months.
- Identify whether the India team will serve only group companies or also Indian customers.
- Estimate initial headcount, hiring pace, leadership roles and workplace needs.
- Decide which company will own work product, contracts, equipment and other assets.
- Identify any regulated activities or sector-specific foreign-investment conditions.
2. Compare the operating models
| Model | May suit | Questions to resolve |
|---|---|---|
| Owned Indian subsidiary | A long-term team where the parent wants direct control over the entity and employment | Incorporation, FDI, payroll, contracts, tax and recurring compliance |
| Employer of Record (EOR) | A small or early-stage hiring plan while the company evaluates demand | Employer responsibilities, service terms, role boundaries, cost and exit plan |
| Managed service | A defined service delivered by a third-party provider | Service levels, access to data, IP ownership, security and vendor dependence |
| Build-operate-transfer (BOT) | A phased launch where a partner initially builds or runs the centre before transfer | Transfer conditions, valuation, employee transition, assets, contracts and IP |
These models are not interchangeable. An EOR or service provider does not automatically give the US parent the same legal control as an owned company. Review the actual contract, employment arrangement and responsibilities instead of relying on the model name.
For a narrower hiring decision, read EOR vs subsidiary in India for US companies.
3. Choose and incorporate the Indian entity
For a long-term captive operation, a private limited company is often one of the main structures to assess because it can employ staff, contract for services and operate as a separate Indian legal entity. The best route still depends on the proposed activity, ownership chain, funding and future plans.
Before incorporating, check the current foreign direct investment policy and whether the business activity is eligible for the intended ownership level and entry route. Do not assume every activity described as technology, analytics or support is automatically treated the same way; regulated or mixed activities may need additional review.
The incorporation work usually includes agreeing the shareholding and board, preparing the parent-company and director documents, completing required authentication, obtaining digital signatures and director identification as applicable, filing the incorporation forms and arranging the registered office. Banking, capital funding and some registrations continue after the company is incorporated.
See the company registration guide for US businesses and the subsidiary document checklist for the related steps.
4. Put intercompany agreements and transfer pricing in place
If the Indian GCC provides services to the US parent or another group company, the arrangement should be documented before charges begin. The agreement should describe the services, responsibilities, deliverables, cost base, pricing method, invoicing and how changes will be handled.
Cross-border transactions between related parties may be subject to Indian transfer-pricing rules. A cost-plus arrangement is common for some captive service models, but the correct method and margin depend on the functions performed, assets used, risks assumed and available comparable data. A standard percentage should not be copied from another company without checking whether it fits.
- Map the functions, assets and risks of the Indian and US entities.
- Identify services, cost recharges, licences, loans and other related-party dealings.
- Review the pricing method and supporting benchmarking or other evidence.
- Maintain agreements, invoices, cost records and evidence of services performed.
- Check whether transfer-pricing filings or an accountant’s report apply under current rules.
For more detail, see transfer pricing for a US parent and Indian subsidiary.
5. Decide who owns intellectual property
For an engineering or product GCC, decide how existing IP, new code, inventions, designs, documentation, tools and improvements will be owned or licensed. If the US parent is intended to own work created by the India team, review the employee documents and intercompany agreements so that the intended rights are properly recorded.
Also consider confidentiality, access to source code, third-party software terms, data protection, security controls and whether the Indian entity needs a licence to use parent-owned IP. An agreement should reflect what the teams actually do, not only what the group would like the paperwork to say.
6. Plan hiring, payroll and the workplace
The legal entity is only one part of the launch. Before the first employee starts, identify the employer, payroll process, employment terms, applicable registrations, workplace arrangements, leave and benefits policies, and the person responsible for ongoing filings. Requirements can vary with headcount, remuneration, state and business activity.
Make sure employee and contractor arrangements match the working relationship. If people work for the Indian entity but take day-to-day direction from overseas, review the contracts, supervision model, data access and intercompany arrangements together.
7. Build the compliance calendar before go-live
A GCC needs a recurring calendar, not just a one-time incorporation checklist. The exact obligations depend on the company, transactions, employees and registrations, but the plan should cover at least the following workstreams:
- Company law: board and shareholder actions, statutory registers, annual filings and audit.
- Tax and accounting: bookkeeping, income-tax returns, tax payments and GST review or filings where applicable.
- Foreign investment: evidence of inward remittance, share allotment records and applicable RBI reporting.
- Transfer pricing: related-party agreements, pricing support, documentation and applicable reporting.
- People: payroll, withholding, social-security and employment compliance as applicable.
- Operations: registered-office records, licences or registrations, data and IP controls, and renewal dates.
Assign an internal owner to each workstream and agree who prepares, reviews and approves each filing. This reduces the risk that a deadline is missed because it sits between the US parent, local finance team and external advisers.
8. Estimate the full cost, not only incorporation fees
The launch budget should separate one-time setup costs from recurring operating costs. In addition to government charges and professional fees, account for document authentication, office costs, recruitment, payroll, accounting, audit, tax advice, transfer-pricing support, software, insurance and the time needed from the US team.
Do not compare an owned subsidiary with an EOR or managed model using only the incorporation quote. Compare the expected team size, cost per employee, management effort, control, IP position, compliance scope and the cost of changing models later. Ask advisers to state assumptions, exclusions and recurring charges in writing.
For the broader hiring comparison, see EOR vs subsidiary in India and the India setup cost and timeline guide for US companies.
Official sources
Where to verify current requirements
Use the current official rules for the proposed activity and transaction. This guide is a planning overview, not a substitute for advice on a specific structure.
Frequently asked questions
What is a Global Capability Centre in India? A Global Capability Centre (GCC) is a team or operating unit that a company owns or controls to perform work for its wider group, such as engineering, finance, analytics, research, technology or internal operations. The term describes an operating model, not a separate legal form.
Does a US company need an Indian subsidiary to set up a GCC? An Indian subsidiary is a common structure for a long-term, company-owned team, but it is not the only possible model. Depending on the business plan, a company may first assess an Employer of Record, managed service or build-operate-transfer arrangement. The right option depends on control, scale, timeline, activities and risk.
Can a US parent own 100% of an Indian GCC company? Full foreign ownership may be permitted where the proposed activities and investor meet the applicable FDI rules. Sectoral caps, conditions, approval routes and investor-specific restrictions must be checked before choosing the structure or funding it.
What tax issues should a US company review for an India GCC? The group should review Indian corporate tax, transfer pricing for related-party dealings, GST where relevant, payroll and withholding obligations, and any US reporting that applies to the parent. The treatment depends on the functions performed, contracts, ownership and current law.
How should an India GCC charge its US parent? The charge should reflect the actual functions, assets and risks of the Indian entity and comply with applicable transfer-pricing rules. A cost-plus model may be relevant for some captive service centres, but the method, comparable data, margin and documentation need a case-specific review.
Should a company use an EOR or set up its own GCC? An EOR may suit an initial, small or exploratory hiring need. An owned subsidiary may provide more direct control over employment, operations and long-term capability, but brings company, tax, payroll and compliance responsibilities. Compare the real operating needs and total cost before deciding.
Related India-entry guides
- Company registration in India from the USA
- Setting up an Indian subsidiary for a US SaaS company
- EOR vs subsidiary in India for US companies
- Transfer pricing for a US parent and Indian subsidiary
- Post-incorporation compliance checklist
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