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The Global Capability Centres (“GCC(s)”) ecosystem in India has evolved considerably over the last decade and today represents one of the most important pillars of India’s commercial real estate, technology, and employment sectors. India continues to witness significant growth and expansion of GCCs, with multinational corporations increasingly viewing India not merely as a cost-efficient destination, but as a strategic hub for innovation, technology, analytics, research, and global business operations.
Broadly, GCCs in India may be categorised into two segments: (i) entities that have been operating in India for several years, in some cases for over a decade; and (ii) entities that have recently established or are in the process of establishing operations in India.
Recognizing the economic significance of GCCs, several states such as Haryana, Karnataka, Maharashtra, Tamil Nadu and Telangana have introduced GCC focused policies and investment initiatives aimed at improving infrastructure, streamlining approvals, generating employment, and attracting foreign investment. Chennai, Bengaluru, Gurugram, Hyderabad, Mumbai and Pune continue to remain leading GCC hubs due to their mature commercial ecosystems and talent availability.
As GCCs continue to expand across India, one of the most significant developments has been the transformation of workplace models. Traditionally, GCCs relied on long-term commercial leases involving significant upfront investment, fit-out costs, and lock-in commitments. However, serviced offices, coworking spaces, and managed office solutions have increasingly emerged as preferred alternatives, particularly for new entrants and entities seeking scalable operations.
The growing preference for serviced office models is driven by their operational flexibility and “plugand-play” infrastructure, which allows GCCs to commence operations with minimal lead time and reduced capital expenditure. Managed workspace operators typically provide bundled services including furnished workspaces, IT infrastructure, utilities, meeting facilities, security, and facility management support, thereby offering a convenient "one-stop-shop" solution for occupiers. This flexibility is particularly attractive to foreign entities seeking operational agility while retaining the ability to adapt quickly to changing business requirements.
Notwithstanding the commercial advantages, serviced office and managed workspace arrangements present several legal and regulatory considerations.
One of the key issues pertains to the legal characterisation of such agreements. Unlike traditional lease agreements, serviced office arrangements are often structured as service agreements, business centre agreements, or managed office agreements, where the operator provides bundled infrastructure and support services alongside the right to use designated premises.
This has resulted in differing interpretations between service providers and regulatory authorities. While service providers often contend that such arrangements are purely contractual service relationships that do not create any leasehold or licensing rights in favour of the occupier, regulatory authorities typically examine the substance of the arrangement rather than its form, and may characterise it as a leave and license arrangement where the occupier is granted exclusive occupation or dedicated use of specific premises or workstations, irrespective of the nomenclature adopted by the parties.
This distinction assumes considerable importance from a registration, stamp duty, and compliance perspective. In certain jurisdictions, including Maharashtra and Andhra Pradesh, authorities have in some instances treated such arrangements as being akin to a lease or a leave and license arrangements and have sought payment of stamp duty and registration with registrar of assurances. Consequently, the absence of uniform treatment across jurisdictions continues to create uncertainty for occupiers and service providers alike.
The issue often becomes particularly relevant in the context of GST registrations and other regulatory filings, where authorities often require documentary evidence establishing the registered place of business. In practice, occupiers have occasionally encountered requests for duly stamped and registered occupancy documents. In Maharashtra, for example, businesses have faced situations where GST authorities sought registered documentation despite the underlying arrangement being structured as a managed workspace or service agreement.
In such cases, parties are often required to engage with registration and revenue authorities to clarify the nature of the arrangement and determine the appropriate stamp duty treatment. Questions frequently arise as to whether the arrangement should be classified as a service agreement, a leave and license arrangement, or, in certain circumstances, whether stamp duty implications comparable to a lease transaction may apply. Given that certain states mandate registration of leave and license arrangements, an incorrect assessment of the legal nature of the arrangement may lead to practical compliance challenges.
Accordingly, from a legal drafting and risk allocation perspective, careful consideration must therefore be given to the nature of rights being granted under serviced office arrangements. Clauses relating to possession, exclusivity, access rights, term, termination, lock-in obligations, usage restrictions, and operational control require nuanced drafting to ensure alignment with the intended commercial structure while also mitigating unintended regulatory characterisation risks.
Another important consideration relates to the nature of rights created in favour of the occupier. Unlike conventional leases, managed workspace arrangements are generally structured to avoid creating proprietary or possessory interests in the premises. While the managed workspace structure enhances operational flexibility, some occupiers perceive it as offering comparatively weaker legal protection in the event of disputes relating to occupation, access, termination, or business continuity.
In such circumstances, occupiers are often required to rely primarily on contractual remedies rather than property-based rights. Given the time, cost, and complexity associated with dispute resolution proceedings, certain businesses continue to prefer traditional leasing structures for long-term strategic operations notwithstanding the advantages offered by flexible managed office arrangements.
Beyond real estate considerations, data privacy and information security have emerged as critical concerns for GCCs operating from serviced office environments. GCCs, particularly those operating in sectors such as technology, healthcare, banking, financial services, legal operations, and consulting, routinely process substantial volumes of sensitive business information and personal data. Given that serviced office environments often involve shared infrastructure, common access areas, integrated IT systems, third party facility management personnel, and multi-tenant operations, concerns relating to data security and confidentiality assume heightened importance.
The enactment of the Digital Personal Data Protection Act, 2023 (“DPDP Act”) has further amplified the need for robust contractual and operational safeguards. The DPDP framework imposes obligations concerning lawful processing of personal data, implementation of reasonable security safeguards, prevention of data breaches, and protection of personal information processed within organisational ecosystems. Consequently, GCCs are increasingly seeking enhanced contractual protections from serviced office operators, including comprehensive confidentiality obligations, data protection undertakings, cybersecurity protocols, restricted access controls, audit rights, incident reporting mechanisms, and vendor compliance assurances.
In practical terms, serviced office arrangements for GCCs now extend beyond mere commercial occupancy negotiations and increasingly involve detailed evaluation of information security standards, data governance protocols, cross-border operational requirements, and regulatory compliance frameworks. International corporations establishing GCCs in India are particularly focused on ensuring that their India operations align with global internal compliance standards and data governance policies.
The Indian GCC sector is expected to continue its strong growth trajectory over the coming years, driven by India’s skilled talent pool, digital infrastructure, favourable business environment, and expanding innovation ecosystem. Simultaneously, the legal frameworks governing commercial occupancy, workplace models, data protection, and regulatory compliance are expected to evolve alongside the sector.
As GCCs increasingly adopt flexible operational models, stakeholders must ensure that commercial agility is balanced with appropriate legal structuring and compliance safeguards. The emergence of serviced office models has undoubtedly transformed the manner in which GCCs establish and scale operations in India, however, these arrangements also necessitate careful evaluation from real estate, regulatory, taxation, and data protection perspectives. Accordingly, a comprehensive legal assessment at the structuring stage remains critical for GCCs seeking to establish sustainable and compliant operations in India.
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