How to Set Up a GCC in India: A Step-by-Step Guide for UK Companies

A wholly owned subsidiary GCC in Bengaluru typically takes 14 to 18 weeks from board approval to the first employee's start date. That single number is what most UK HR Managers actually need when they start planning how to set up a GCC in India, step by step, and it rarely matches the timeline their lawyers first quote them. We've run entity setup and hiring side by side for dozens of UK headquartered GCCs, and the pattern holds every time: teams that plan incorporation and recruitment together launch on schedule. Teams that plan them one after the other don't.

This guide covers what actually happens, in order, when a UK company builds a Global Capability Center (GCC) in India: the legal entity, the compliance obligations under Indian labour law, the hiring process, the difference between contract and full time roles, and the real cost of running one.

Why Are UK Companies Setting Up GCCs in India Right Now?

The GCC model has moved well past its old back office reputation. A growing share of new centres opening in India today are being led by British firms, insurers, asset managers, and mid market SaaS companies out of London and Manchester that need engineering, data and AI capacity they cannot hire fast enough at home. Most of these builds now include a dedicated AI or platform engineering pod from day one, reflecting how quickly generative AI tooling, cloud native delivery, and agentic automation have become standard parts of a GCC's remit rather than a future add on.

Bengaluru remains the first choice city for a UK GCC because of its concentration of leaders who have already run a captive centre for a foreign parent and understand UK reporting lines. Hyderabad has become the second choice specifically for data engineering and cloud infrastructure talent, with senior compensation running roughly 10 to 15 percent below Bengaluru. Pune is quieter but strong for platform and QA heavy builds, and popular with UK financial services clients because the compliance ecosystem there, auditors, company secretaries and payroll vendors used to foreign parent reporting, is already mature.

Which Indian Cities Have the Compliance Talent a UK GCC Actually Needs?

A GCC is not simply an office with staff. It is a legal entity with its own statutory registrations, its own labour law obligations, and its own reporting cadence back to a UK board, and HR usually ends up owning more of that than IT or Finance initially expects.

Bengaluru has the deepest bench of HR professionals who have specifically run people operations inside a GCC rather than a domestic Indian company, including HR Business Partners comfortable with dual reporting into a UK Head of People. Hyderabad's HR talent pool is smaller but sharper on payroll compliance, largely because of the concentration of GCCs for foreign insurance and reinsurance firms there.

What Indian HR candidates for GCC roles most often lack is experience with the documentation standard a UK audit committee expects: offer letters, background checks and termination files that would survive scrutiny in a UK employment tribunal, not just Indian norms.

We test every GCC HR Lead candidate with a mock termination scenario and ask them to build the documentation trail a UK legal team would want to see. It is the fastest way to separate someone who has run domestic HR from someone who has actually run a GCC people function.

What Employment Law Applies When You Set Up a GCC in India?

Most UK companies incorporate a wholly owned subsidiary under the Companies Act, 2013, as a private limited company, giving the UK parent full equity control and letting the subsidiary hold its own PAN, GST registration and employer identity for payroll. Foreign investment into this entity is governed by the Foreign Exchange Management Act (FEMA), 1999, and for typical GCC activity such as software development, R&D and shared services, 100 percent FDI is permitted under the automatic route, meaning no prior Reserve Bank of India approval is needed. The compliance filings still have to happen on schedule though, and missed filings are the most common paperwork mistake we see UK Finance and HR teams make in year one.

Once the entity is live, day to day employment is governed by the Shops and Establishments Act of the state you register in, alongside the four Labour Codes that consolidated India's federal labour law: the Code on Wages, the Industrial Relations Code, the Code on Social Security, and the Occupational Safety, Health and Working Conditions Code. These set the floor for wages, provident fund and gratuity contributions, working hours and termination notice, and they apply to a GCC exactly as they would to any Indian company.

This is also where the difference between contract hiring and full time hiring matters most for HR planning. A contract hire, engaged through an EOR or staffing partner, is on that partner's statutory registrations, so provident fund, gratuity and termination process sit with the partner, not your entity. A full time hire sits directly on your GCC's own PF and ESI codes, which gives you more control over performance management and career progression but only becomes possible once your entity's registrations are active.

Most UK HR teams use contract hiring for the first cohort while incorporation is in progress, then convert core roles to full time once the entity can legally employ them.

Which GCC Setup Model Should a UK Company Choose?

Before building a headcount plan, decide which entry model the GCC will use, because it changes who is legally the employer, how fast hiring can start, and how much HR infrastructure needs to be built rather than rented.

Model	Legal Employer	Time to First Hire	Upfront Cost	HR Control	Best For
Wholly Owned Subsidiary (WOS)	Your own India entity	14 to 18 weeks	High, incorporation, registrations, office lease	Full control, full liability	Teams planning 50 or more headcount within two years
Build Operate Transfer (BOT)	A local partner, transferred to you later	4 to 6 weeks	Moderate, partner setup fee only	Partial, increasing over time	Teams testing India before committing capital
Employer of Record (EOR)	The EOR provider	2 to 3 weeks	Low, no entity needed	Limited day to day, EOR handles compliance	Pilot teams under 20 people

Most GCCs we help build actually run two models in sequence. EOR contract hiring covers the first 10 to 15 roles while the WOS incorporation is underway, then everyone transfers onto the subsidiary's own payroll once its PF and ESI codes are active.

That transfer point, moving statutory registrations from an EOR to your own entity, is the single most process heavy HR task in the whole build and needs its own four to six week runway, separate from any hiring push.

What Does the GCC Setup Process in India for UK Companies Look Like Step by Step?

Our standard build runs on a fixed sequence. Weeks one and two cover scoping: headcount plan, city selection, entity versus EOR decision. Weeks three to eight run entity incorporation and statutory registrations in parallel with EOR based contract hiring for the first cohort. Weeks six to twelve are the core hiring sprint for engineering, AI and HR leadership roles. Weeks twelve to eighteen close out with the EOR to entity transfer and the first statutory filing cycle.

HR and recruitment sit on the same weekly stand up throughout, because the two workstreams affect each other constantly. A delayed PF registration, for example, directly blocks onboarding paperwork for anyone hired that month.

For leadership vetting specifically, we run two stages: a functional interview with a UK based panel member, usually the client's own Head of People or COO, and a compliance scenario round testing candidates against real Indian labour law situations rather than generic HR competency questions.

A recent example from our work at AnjuSmriti Global: a London headquartered specialty insurer, roughly 180 employees globally, engaged us to set up a 35 person Bengaluru GCC covering claims operations and data engineering. They had planned to wait for full incorporation before hiring anyone, which would have pushed their board committed launch date back by nearly two months. We proposed a contract hiring bridge instead, hiring the first 12 people, including the India HR Lead, before incorporation was even complete.

The near miss came when the client's UK legal team drafted those contracts using UK notice period clauses, which conflicted with Karnataka's Shops and Establishments Act minimums. We caught it in contract review before any offer went out and rewrote the notice and termination terms so they were compliant on both sides. The GCC hit its launch date, all 12 contract hires converted cleanly onto the new entity's payroll eleven weeks later, and the client avoided a compliance breach in its very first month of India operations.

What Does It Cost to Set Up and Run a GCC in India?

For an HR Manager building the business case, the board wants total cost of ownership, not just base salary, and this is where UK companies most often underestimate their India budget by 20 to 30 percent.

Bengaluru salary bands for the roles most GCC HR functions hire first, in Indian Rupees, annual, with approximate GBP conversion at £1 equal to ₹105:

• HR Generalist, mid level: ₹9 to 14 lakh (£8,600 to £13,300)

• India HR Lead or HR Business Partner, senior: ₹22 to 32 lakh (£21,000 to £30,500)

• India Country HR Head, lead level: ₹45 to 65 lakh (£43,000 to £62,000)

On top of base salary, budget an additional 25 to 30 percent for statutory employer contributions such as provident fund and gratuity accrual, plus 8 to 12 percent agency or EOR fee depending on which model is running in year one.

A senior HR Lead role showing ₹28 lakh (£26,700) on an offer letter typically costs the entity closer to ₹36 to 38 lakh (£34,300 to £36,200) fully loaded, and that gap is what most UK Finance teams miss when comparing an India hire directly against a UK salary line.

Most clients working with AnjuSmriti Global reinvest the savings from this cost gap into a second hiring wave six to nine months after go live, usually to build out the India HR function itself so it stops depending on the UK team for day to day compliance decisions.

Conclusion

Two shifts are visible in live mandates right now that matter to any UK company working through how to set up a GCC in India step by step over the coming year. First, more mid market firms are skipping the year long EOR test phase and going straight to a WOS with a compressed ten week incorporation timeline, because the process itself has become faster and more predictable.

Second, HR teams are increasingly building the India compliance function before the first engineering hire rather than after, largely because the labour code consolidation leaves less room for delay. GCCs themselves are also shifting from cost centres toward innovation hubs, with AI, automation and platform engineering pods now standard in most new builds rather than an afterthought.

If your board is asking for a realistic build plan, our team can walk you through what a phased entity and hiring timeline looks like for your specific headcount target.

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FAQs

1.Do UK companies need a wholly owned subsidiary to set up a GCC in India?

No. A wholly owned subsidiary gives full control but takes 14 to 18 weeks to incorporate. Many UK companies start with an Employer of Record or a Build Operate Transfer partner to hire within two to six weeks, then convert to a subsidiary once headcount and budget justify the entity cost and longer term control.

2.What is the difference between contract hiring and full time hiring for a GCC in India?

Contract hires sit on an EOR or staffing partner's statutory registrations, so compliance and payroll responsibility stays with that partner. Full time hires sit directly on your own entity's PF and ESI codes, giving more control over career progression, but only once your entity is legally registered to employ staff in India.

3.Which Indian city is best for a UK company setting up a GCC?

Bengaluru leads for engineering leadership and GCC-specific HR talent. Hyderabad suits data engineering and cloud roles with slightly lower senior compensation. Pune fits platform and QA heavy teams, particularly financial services GCCs, thanks to a mature local compliance ecosystem of auditors and payroll vendors already used to foreign parent reporting.

4.What Indian labour laws apply to a UK owned GCC?

The Companies Act, 2013 and FEMA, 1999 govern incorporation and foreign investment. Day to day employment falls under the state Shops and Establishments Act and the four Labour Codes covering wages, industrial relations, social security and occupational safety, which apply to a foreign owned GCC exactly as they would to any Indian company.

5.How much does it cost to run an HR function inside an India GCC?

Budget base salary plus 25 to 30 percent for statutory employer contributions like provident fund and gratuity, plus 8 to 12 percent agency or EOR fee in the early phase. A senior HR Lead offered ₹28 lakh typically costs the entity closer to ₹36 to 38 lakh once fully loaded.

6.How long does it take to get PF and ESI registration for a new GCC entity?

PF and ESI registration typically takes two to four weeks once a Company Secretary files the application, running alongside other incorporation steps. Hiring does not have to wait for this if the first cohort is bridged through an EOR, but direct entity hires cannot legally start until the codes are active.

7.Can a UK employment contract template be reused for GCC hires in India?

Not without significant rework. Indian contracts need statutory language covering provident fund enrolment, gratuity eligibility after five years and state specific professional tax deductions, none of which appear in a standard UK template. We rebuild from an India compliant base and layer in UK specific clauses like confidentiality and IP assignment afterward.

8.What happens to contract employees once our GCC entity is fully incorporated?

Each employee's statutory registrations need to be formally transferred from the EOR's codes to your entity's own PF and ESI codes, with updated offer letters and continuity language so accrued gratuity time is not lost. This transfer takes four to six weeks and should not be scheduled during a major hiring push.