Data

Global Capability Centers (GCCs) have reshaped how multinational companies operate worldwide.

Once dismissed as mere "back offices", these units have evolved into hubs of innovation, excellence, and strategic growth. So what do they actually do?

GCCs are wholly owned captive centers established by multinational corporations in key overseas locations. These sites leverage geographic advantages and cost efficiencies to deliver high value work. So to put it simply, they are nothing but offshore centres that cater to multiple jurisdictions. Unlike traditional outsourcing, GCCs are 100% owned and controlled by the parent company, guaranteeing alignment with their global standards for governance, quality, and risk management.

Today, GCCs drive core functions like:

• Research & Development
• AI capability building
• Finance and compliance management
• Critical IT operations and infrastructure

Over the last five years, cities like Bangalore, Pune, Hyderabad and Gurgaon have seen a steep rise in these GCCs. We have also seen GCCs being set up in Ahmedabad, Coimbatore and Chennai. GCCs are proving to be truly industry agnostic, with legal and compliance hiring mandates emerging across diverse sectors beyond just traditional Banking & Finance and Information Technology.

We are seeing strong demand from manufacturing companies setting up legal operations for supply chain contracts and regulatory compliance, pharmaceutical firms building IP and regulatory affairs teams, gaming companies navigating complex IP and content licensing, and media businesses handling digital rights and platform agreements. This broad sectoral spread reflects the evolution of GCCs where every industry needs sophisticated in-house legal capability to support innovation, global expansion, and regulatory navigation. 

On one end, McDonald's has established its largest GCC outside the United States in Hyderabad - a 1.56 lakh sq ft facility housing 1,500+ employees focused on global analytics, HR, finance, and technology. On the other end, gaming giant Flutter Entertainment has invested $3.5M in its Hyderabad GCC, now surpassing 1,000 employees delivering data engineering, game integrity, and customer operations. From burgers to gaming, GCCs are proving that India's offshore capabilities are now essential for every industry.

Before delving deeper, it is imperative to understand the different GCC models. Here are some common structures illustrated with examples:

1. Build operate transfer model 

A US tech giant partners with an Indian IT firm to quickly scale their analytics team to 500 people. After 3 years of smooth operations, they take full ownership without building from scratch.

2. Special Economic Zone Area 

A German pharmaceutical  company sets up R&D in Hyderabad SEZ, importing lab equipment duty-free and enjoying 100% tax exemption for 5 years while developing 20+ new drug formulations.

3. Wholly owned subsidiary

A London based bank establishes a 100% owned subsidiary in Pune for risk analytics, directly transferring 150 specialists from London HQ with complete control over operations.

4. Branch Office 

A Singapore hedge fund opens a Mumbai branch for market research, getting RBI approval for 2 years to test India operations before committing to a full subsidiary.

By 2030, the GCC market is projected to reach $99 to $105 billion and within five years, the potential market size is estimated to be close to $110 billion based on reports by Nasscom-Zinnov (Thomson Reuters).

However, the GCC journey has been far from smooth and will remain challenging. The primary obstacle? A complex maze of cross-border compliance requirements.

Raj Kapoor settled into his new role as Head of Compliance at a buzzing Bengaluru GCC, reflecting on how his 3,000 member strong team delivered advanced analytics for their US headquarters. Global Capability Centers like his (wholly-owned offshore arms of multinational giants) had come a long way from humble back-office roots.

But as 2025 dawned, Raj sensed a storm brewing. The DPDP Act kicked in, requiring strict data consent records and local storage rules for massive data flows. Global minimum tax changes shook up pricing agreements overnight, and new AI ethics standards demanded close review of every model. Routine work suddenly became a delicate balance between global goals and local requirements.

Just like this story, the cross-border compliance landscape for GCCs in India is multifaceted, requiring adherence to a complex web of domestic and international regulations. Based on my research and ongoing market observations, here are some examples:

• Corporate Structure & Entity Formation: Navigate Companies Act 2013 and FEMA 1999 requirements.
• Data Privacy: Comply with GDPR, India's DPDP Act, and cross-border data transfer rules.
• Tax & Transfer Pricing: Adhere to strict rules on intercompany transactions, GST, and income tax.
• Foreign Exchange & AML: Manage FEMA/RBI reporting, PMLA protocols, KYC, and FIU-IND suspicious transaction reporting.
• Labor & Import/Export: Ensure Provident Fund compliance and Customs Act adherence. For GCCs, it is essential to navigate the specific labour regulations of each state. 
• POSH Compliance: Establish Internal Complaints Committee (ICC) per 2013 Act for workplace sexual harassment prevention.
• IP Protection: Register assets under Patents Act 1970, Trademarks Act 1999, and Copyright Act 1957.
• Environmental Obligations: E-Waste Management/Battery waste management rules under the Environment Protection Act 1986.
• Other Essentials: Follow Real Estate regulations, fulfill CSR liability, and ensure Competition Act 2002 compliance via CCI.

From my interactions and research, I've noticed a lot of effort also goes into bridging cultural and operational gaps between global teams. It takes time to find the right talent, adapt to communication styles, and keep GCCs and HQs strategically aligned. This means clearly sharing the core corporate strategy while building a real understanding of business goals, operational priorities, risk appetites, and exactly how the GCC fits into the bigger picture. The aspiration is to create a cohesive, globally integrated team environment where cultural diversity acts as a strength rather than a barrier. 

GCCs  are moving beyond basic compliance checklists, transforming into smart central hubs that blend advanced technology with on the ground expertise to handle cross-border compliances smoothly.

Here's a closer look at some of the common strategies:

1. Technology
   GCCs are using AI and Technology to spot risks early, automate reports, and react fast to new regulations. Real-time digital dashboards track rules across countries, creating clear audit trails for headquarters. For tough laws like India's DPDP Act and the EU's GDPR, they are building strong cybersecurity from day one.

2. Flexible Ways to Set Up Shop

• Build-Operate-Transfer (BOT): Partner with local experts for the tricky startup phase (legal, tax, labor laws), then transfer full control to the parent company once it's stable.
• Wholly Owned Subsidiaries (WOS): The top choice for major operations, giving parents complete oversight, especially for sensitive IP work.

3. Blending Local Know How with Global Standards
   Top GCCs create dedicated teams to watch policy changes, like RBI's updated risk guidelines, and plan ahead for impacts. They hire specialists such as Data Protection Officers (DPOs) and Head of Compliance. The key is applying worldwide policies but customizing them for local details in tax, labor, and environmental rules.

4. Staying One Step Ahead on Risks
   Frequent audits, both in-house and by outsiders, catch issues in IP protection or data handling early. Many start small with pilot teams (50-100 people) to perfect governance before going big as Centers of Excellence. 

5. Hiring the right talent 

Strategic hires such as Data Protection Officers (DPOs), regulatory specialists, and compliance leads are crucial for GCCs. These professionals are key to early risk identification and effective navigation of complex Indian regulations, including the DPDP Act and RBI guidelines. 

GCCs that invest early in senior governance and compliance leadership are significantly better positioned to scale without friction - both operationally and reputationally.

They ensure that global headquarters (HQ) strategies are successfully implemented in India by bridging cultural differences, harmonizing HQ expectations with local sensitivities, and preventing expensive compliance failures in areas like tax, labour and data protection. 

Ultimately, fostering a culture of compliance and accountability seals the deal. Leaders must set the "tone at the top" with zero tolerance for shortcuts, while compliance officers team up with executives to roll out strong programs, conduct regular check-ins, and drive ownership at every level. This mindset doesn't just check boxes; it will be a key factor in determining a GCC's success and sustainability in an environment where governance capability is fast becoming a competitive differentiator.

1. TOI. “McDonald’s opens 1st India global capability centre (GCC) in Hyderabad — It's largest office outside US.” The Times of India [Hyderabad], 30 October 2025. 
2. Thomson Reuters. “India's global centre market to grow to $105 billion by 2030, says Nasscom-Zinnov report.” Reuters, 11 September 2024.