As multinational companies (“MNCs”) increasingly look to India to build strategic capabilities beyond cost optimization, setting up a Global Capability Centre (“GCC”) has evolved from a back-office necessity into a strategic priority. That shift has accelerated further in 2026, with GCCs increasingly taking ownership of AI-led mandates for generative AI labs, model deployment, and end-to-end product engineering. This expanded scope makes the structuring choices discussed below matter more, not less: this piece covers the foundational WOS/JV and BOT/self-reliant decisions.
Setting up a GCC involves two distinct sets of decisions: the legal and ownership structure and the setup approach. On the ownership front, organizations must choose between a Wholly Owned Subsidiary (“WOS”), where the investor company holds 100% equity and retains complete control, or a Joint Venture (“JV”), where ownership is shared with a local partner who brings market knowledge, regulatory familiarity, and shared financial risk. Separately, on the execution front, companies must decide how the unit will actually be built and run: through a Build-Operate-Transfer (“BOT”) model, where a third-party partner establishes and manages the GCC initially, with an option to transfer full control to the investor company after a defined period, or through a self-reliant approach, where the investor company independently manages every aspect of the setup from day one including talent acquisition, infrastructure and compliance. While WOS and JV determine who owns the entity, BOT and self-reliance models determine who builds and operates it, and organizations often combine these choices in different ways depending on their risk appetite, timeline, and long-term strategic goals.
The first decision: Legal Structuring
WOS and JV are the two dominant ownership routes for a GCC, and are the focus of this piece, but they are not the only ones. An LLP is occasionally used, though FDI into LLPs is more restricted and available only under the automatic route in sectors. Separately, a GIFT City IFSC unit has emerged as a distinct route for BFSI and financial-services GCCs, given the tax and regulatory dispensations available there.
An MNC may establish a GCC as a WOS in India by subscribing to 100% of the equity instruments of an Indian company, subject to the foreign direct investment (“FDI”) regulations under Foreign Exchange Management Act, 1999 (“FEMA”). The principal regulations are the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 (“NDI Rules”) and the Reserve Bank of India’s Master Direction on Foreign Investment in India. Rule 6 of the NDI Rules permits a person resident outside India to subscribe to, purchase or sell equity instruments of an Indian company.
Separately, a WOS in an automatic-route sector with no FDI-linked performance conditions may also issue equity against pre-incorporation expenses (up to 5% of authorised capital or USD 500,000, whichever is less) under Schedule I of the NDI Rules. The WOS would be incorporated and governed by the Companies Act, 2013 (“Companies Act”) and the rules made thereunder.
Subject to state specific policies with respect to GCCs, an MNC may also use any of its existing WOS in India to house a GCC and access incentive schemes, provided the WOS meets specific eligibility criteria established by state policies. Additionally, it is possible to access state GCC incentive schemes through an already established unit, but it will typically be evaluated as an "expansion" rather than a new unit, and the incentive quantum will be tied to incremental jobs/investment specifically created for the GCC, as can be seen in Haryana GCC Policy, 2026. State selection itself, weighing incentive quantum against talent availability, infrastructure, and timelines across states such as Telangana, Karnataka, Tamil Nadu, and Odisha, or GIFT City for BFSI GCCs, is a distinct decision layer running alongside the choices addressed in this piece.
Alternatively, an MNC may establish a GCC as a JV in India by subscribing to a portion of the equity instruments of an Indian company, jointly with an Indian resident partner, subject to the same FDI regulations. As with a WOS, the JV would be incorporated and governed by the Companies Act and the rules made thereunder and the principal regulations governing such investment remain the NDI Rules and the RBI's Master Direction on Foreign Investment in India, and Rule 6 of the NDI Rules similarly permits a person resident outside India to subscribe to, purchase or sell equity instruments of an Indian company, whether wholly or in conjunction with a resident partner.
The defining advantage of a WOS is complete operational control: the GCC can be structured purely around the investor's own priorities, move quickly, and retain full ownership of intellectual property, processes, and talent decisions. The trade-off is that the investor alone carries the burden of navigating India's regulatory and operational landscape.
A JV, by contrast, trades some of that autonomy for the local partner's market knowledge and regulatory familiarity, with decisions on scope, direction, and resourcing shared - and occasionally contested - between both stakeholders. In effect, it exchanges strategic independence for on-ground expertise and shared risk.
Additionally, the parties may also agree on a pre-determined period post which the GCC unit would be transferred in its entirety to the investor. Such conversions are a recognised route in practice.
The Second Decision: Operational Structuring
Under a BOT model, a third-party partner establishes and manages the GCC on the investor's behalf during the initial phase - talent acquisition, infrastructure, and compliance - while the investor retains an option to take full control after a defined period. This gets the GCC operational quickly by drawing on the partner's existing local expertise. A BOT partner that negotiates or concludes contracts on the investor's behalf can also expose the investor to permanent establishment risk under India's tax treaties, and the eventual transfer of operations typically attracts transfer pricing scrutiny - both worth flagging to tax counsel early in structuring the arrangement. As an example, the Odisha GCC Policy, 2025 expressly recognises the BOT model as a valid route for setting up GCCs.
A self-reliant approach, by contrast, puts the entire setup - talent, infrastructure, vendors, compliance - directly in the investor's hands from day one, with no partner's processes to later unwind. The trade-off is a longer timeline and a steeper learning curve, since the investor carries the full regulatory and operational burden without a partner's pre-existing local expertise.
Convergence of the two decisions
In practice, the JV and BOT models often converge rather than operate as entirely separate choices. Where a company has already deployed the JV model, opting for a BOT-style approach for its GCC setup tends to make practical sense, since the groundwork of identifying and engaging a local partner, along with the trust, familiarity, and working relationship that comes with it has effectively already been established through the JV. The MNC can leverage the same partner's market familiarity to stand up the GCC quickly, without having to separately vet and onboard a third party purely for the BOT arrangement. In this sense, a BOT setup layered onto an existing JV relationship allows the investor to extend the benefits of collaboration and local expertise it has already secured, while still preserving the option to transition to full control over the GCC once it is established and stable, effectively combining the familiarity of an existing partnership with the long-term autonomy that the BOT model is designed to eventually deliver.
Unlike a JV, a WOS setup does not come pre-linked to either the BOT or the self-reliance model since the MNC will hold 100% ownership from the outset, therefore retaining the flexibility to choose either operational approach on its own terms, without an existing local partner's involvement shaping that decision. An investor company that wants to move quickly and draw on external on-ground expertise can engage a third-party partner under a BOT arrangement to establish and initially manage the WOS, before transferring full operational control once the unit is stable. Alternatively, an MNC confident in its ability to navigate India's regulatory landscape independently with staffing and infrastructure setup can adopt the self-reliance approach, building and operating the WOS entirely in-house from day one. The limitation, however, is that unlike a JV, a WOS setup opting for BOT must identify, vet, and onboard a third-party partner from scratch, with no pre-existing familiarity or working relationship to draw on. This means that while a WOS offers greater flexibility in choosing its execution model, that choice comes without the head start in partner trust and local knowledge that a company relying on a JV partnership would already have in hand.
Conclusion
Ultimately, there is no universally correct mode for setting up a GCC with the right combination of ownership structure and execution approach depending on the MNC's risk appetite, timeline, familiarity with the Indian market, and long-term strategic intent. As GCC mandates increasingly extend into AI-led product and platform ownership, that alignment will only grow more consequential – a theme this series will take up next.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
