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Japan to India · Capability centres

Global capability centres in India for Japanese groups

CA Utsav Dogra, Chartered Accountant, ICAI M. No. 542375 · Updated

In brief

A Japanese group's captive centre in India is usually a wholly owned subsidiary paid on a cost-plus basis. The design points are the transfer pricing model, assignment of IP to the parent, GST treatment of exports, data transfers, and keeping parent staff from creating a permanent establishment.

What is specific to Japanese companies

Japanese groups increasingly use India for IT and engineering support for global operations.

Our services

How SU and Company helps

We set up and run capability centres and sector-specific entities.

  • Sector FDI conditions and approvals
  • Capability centre structuring and cost-plus model
  • GST export set-up and refunds
  • Payroll for fast-growing teams
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Questions

Can a capability centre start under an employer of record?

Yes, for a short period, but a subsidiary is needed for scale, IP and transfer pricing clarity.

General information as at 5 November 2026, not advice for a particular case. Indian and Japanese rules change often; confirm the current position before acting. Japanese law points should be confirmed with a Japanese adviser.

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