Creating a Global Capability Centre (GCC) in India

India has become an increasingly popular destination for companies looking to establish Global Capability Centres (GCCs), thanks to its talented workforce, cost efficiency, and growing business-friendly environment. However, setting up a GCC in India is not a one-size-fits-all process. It's important to consider the best approach based on your company's goals, size, and long-term strategy. In this blog, we'll explore the four most common ways to hire a team in India, their benefits, and the challenges to consider, so you can make an informed decision.

Establishing a Subsidiary

Setting up your own subsidiary in India has long been a popular choice for companies looking to establish a strong, long-term presence. With this model, you get full control over your operations, your brand, and your team. However, it comes with its challenges.
You’ll need to navigate the complex landscape of Indian tax laws, compliance requirements, and the process of registering a company. The setup time can range from 6 to 18 months, meaning it could take a while before you’re able to hire your first employee. Additionally, the subsidiary must remain profitable from day one due to strict transfer pricing regulations, making it a high-stakes model.
Exiting the country can also be time-consuming, with some businesses taking between 3 to 4.5 years to wrap up operations. While this route works well for larger teams (100+ employees), the costs and administrative burdens may not be worth it for smaller teams.

Leveraging an Employer of Record (EOR)

The Employer of Record (EOR) model, such as Rapid, has emerged as an efficient and flexible way to hire in India without the complexity of setting up a subsidiary. With an EOR, your partner handles all the local compliance, taxes, and employee benefits, allowing you to onboard talent quickly and without the headaches of managing the legal side.
This model is especially appealing for companies that want the flexibility to hire remote, hybrid, or in-person teams in India, all while retaining control over intellectual property and data. The best part? You avoid the risks and complexities associated with transfer pricing and employee liabilities.
EOR platforms like Rapid also allow you to maintain your company culture and offer a customized experience for your India team. This flexibility, along with low administrative overheads, makes the EOR model one of the fastest-growing ways to build teams in India.

Hiring Contractors

Contractor arrangements are often used by companies that prefer a more flexible, low-commitment approach. While this method can reduce overheads and speed up hiring, it comes with some drawbacks.
The talent pool for contractors may be smaller, as many professionals prefer full-time employment with benefits. Contractors also miss out on the usual perks like health insurance, provident fund, and leave, which can affect long-term loyalty and engagement.
Additionally, hiring contractors can trigger risks like permanent establishment (PE) taxation and contractor misclassification, both of which can lead to legal complications. If you choose this model, it's important to fully understand the potential risks and make sure you have proper agreements in place to mitigate them.

Partnering with an Outsourcing Agency

Outsourcing can be a great option if you need a highly specialized team for a short-term project. An outsourcing agency handles the recruitment and management of the team, saving you time and effort.
However, this option limits your control over the talent pool and processes. You'll typically be presented with a small selection of candidates, and the agency manages how the team works. The cost can also be higher due to markups, making it less suitable for long-term or large-scale projects.
Outsourcing is best for short-term, well-defined projects but is less ideal if you're looking to build a stable, long-term team in India.

Finding the Right Path for Your GCC

Choosing the right method for hiring a team in India depends largely on your business needs and goals. Whether you're setting up a large-scale operation through a subsidiary, looking for flexibility with an EOR, or considering contractors or outsourcing for specific projects, each option has its own advantages and challenges.

At the end of the day, setting up a GCC in India is an exciting opportunity that can help your business tap into a growing market and access top-tier talent. If you're looking for more details and insights to help you decide which approach is right for you, make sure to check out our YouTube video. We go deeper into each option, providing valuable advice and real-world examples to help guide your decision-making process.

Let us be your partner in navigating the complexities of building a successful team in India!