Regulations Governing Global Capability Centers (GCCs) in India

Global Capability Centers (GCCs) in India must comply with a wide array of legal and regulatory requirements spanning company formation, foreign investment, labor laws, taxation, intellectual property, and data protection[1][4][5]. There is no single overarching law specifically regulating GCCs, but their operations are governed by a combination of central and state legislation and sectoral frameworks[5][4].

Key regulations and requirements include:

Corporate Structuring: GCCs may be set up as wholly owned subsidiaries, joint ventures, or limited liability partnerships. The Companies Act, 2013, governs company formation and ongoing compliance

Foreign Investment (FDI): Most sectors relevant for GCCs (such as IT/ITeS and R&D) permit up to 100% FDI under the automatic route, with certain exceptions for investments from countries bordering India which require government approval as per Press Note 3 (2020 Series)

Taxation: GCCs are subject to Indian corporate tax laws, transfer pricing regulations, goods and services tax (GST), and advance pricing agreements for cross-border transactions[

Labor Laws: Key labor laws include the Minimum Wages Act, Employees’ Provident Funds and Miscellaneous Provisions Act, and those related to social security, health insurance, and working conditions. All employees, domestic and foreign, are regulated under these laws and specific provisions exist for hiring foreign nationals[5].

Intellectual Property (IP): Indian IP laws must be followed for patents, copyrights, and trademarks, with additional compliance for technology licensing under the Indian Contract Act, 1872[1][6].

Data Protection: The Digital Personal Data Protection Act, 2023, introduces more stringent data privacy requirements, supplementing older SPDI (Sensitive Personal Data or Information) Rules. GCCs handling personal data must comply with both Indian and international data protection laws such as the EU’s GDPR[

Special Economic Zones (SEZs) and International Financial Services Centres (IFSCs): These offer regulatory incentives including tax exemptions, labor law relaxations, and simplified licensing. The SEZ Act (2005) and relevant IFSC regulations apply for centers established in these zones[5].

Environmental Laws: Compliance with environmental regulations is also required depending on location and operational footprint[4].

Engagement with local advisors is advised to ensure full compliance due to the complexity and frequent updates in the regulatory landscape[2][4]. Failure to comply with these regulations can result in penalties or disruptions to GCC operations.

Sources

[1] Legal and Regulatory Compliance for Setting Up a Global Capability ... https://www.linkedin.com/pulse/legal-regulatory-compliance-setting-up-global-center-gcc-gunturu-ucijc

[2] Guide to Setting Up Global Capability Centers (GCCs) in India https://ksandk.com/company-incorporation/global-capability-centers-india/

[3] Strategic GCC setup for businesses in India - Trilegal https://trilegal.com/gcc-navigating-regulatory-landscape-for-gccs-in-india/

[4] [PDF] Global Capability Centers - Nishith Desai Associates https://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research_Papers/Global-Capability-Centers.pdf

[5] Legal & Regulatory Compliance to Set Up a GCC in India https://inductusgcc.com/legal-regulatory-compliance-to-set-up-a-gcc-in-india/

[6] How to Set Up a Global Capability Center in India | Key Steps https://tekwissen.com/blog/global-capability-center/setting-up-globalcapability-center-in-india/

[7] Global Capability Centers in 2025: Key Legal and Strategic ... https://www.pillsburylaw.com/en/news-and-insights/global-capability-centers-2025-legal-strategic-considerations.html

[8] Global Capability Centers | All you need to know about GCCs - Zinnov https://zinnov.com/centers-of-excellence/global-capability-centers-101-all-you-need-to-know-about-gccs-blog/

[9] Optimal locations for Global Capability Centres (GCCs) in India https://corporate.cyrilamarchandblogs.com/2024/05/optimal-locations-for-global-capability-centres-gccs-in-india-where-to-set-it-up/

[10] In what ways do Global Capability Centers handle regulations in ... https://community.nasscom.in/communities/gcc/what-ways-do-global-capability-centers-handle-regulations-different-regions