Legal and Compliance Checklist for New GCC Setup in India

Learn the essential legal and compliance checklist for setting up a Global Capability Centre (GCC) in India — covering company registration, FDI rules, labour laws, tax, and data protection.

Global Capability Centres (GCCs) are specialised units set up by multinational companies in India to take care of their services like IT, finance, HR, and R&D. In the last couple of years, India has become a prime location for GCCs due to its large talent pool and cost benefits. However, setting up a GCC needs the right attention to legal and compliance requirements. With this guide, learn in detail the essential legal and compliance checklist for new GCC setups. Understand how these compliances can help companies launch their projects smoothly, while avoiding legal issues.

Legal checklist for new GCC setup

Choose the right legal structure

• Register as a Private Limited Company or Limited Liability Partnership (LLP) with India’s Ministry of Corporate Affairs (MCA).
• For the registration of the company, you need to get a Director Identification Number (DIN) and a Digital Signature Certificate (DSC).
• Also, get registrations such as PAN (Permanent Account Number), TAN (Tax Deduction and Collection Account Number), and GST (Goods and Services Tax).
• Regarding foreign investment, do follow the Foreign Exchange Management Act (FEMA) and the Foreign Direct Investment (FDI) policy. Wholly Owned Subsidiary (WOS) is the usual choice, and Joint Ventures (JV) are used in restricted sectors.

Foreign investment and RBI rules

• Make sure to follow the Reserve Bank of India (RBI) guidelines on foreign investments, especially if funds come from sensitive countries or sectors.
• To avoid penalties, ensure to keep track of foreign exchange rules for remittances and investments.

Compliance checklist for new GCC setup

Employment and labour laws

• The company must register under the Shops and Establishments Act applicable in the state where the GCC operates.
• Do follow labour laws such as the Payment of Gratuity Act, Employees’ Provident Fund (EPF) Act, Employee State Insurance (ESI) Act, and the Sexual Harassment of Women at Workplace (POSH) Act.
• To look after harassment complaints, maintain payroll records, file monthly returns, and establish an Internal Complaints Committee (ICC).

Tax and financial compliance

• Pay corporate tax at the applicable rate, which is usually 22% for companies not availing exemptions.
• Keep records to prove that prices in transactions between company branches in different countries are fair and follow rules.
• Follow the Tax Deducted at Source (TDS) rules and file annual income tax returns.
• Submit annual audit reports and filings with the Registrar of Companies (ROC).
• Register for GST and file monthly or quarterly returns, if applicable.

Data protection and cybersecurity

• Follow the Digital Personal Data Protection Act (DPDP), 2023, to protect employee and customer data.
• Follow the Information Technology (IT) Act, 2000, for data security and privacy.
• Do implement cybersecurity policies and make sure cross-border data transfer rules are met.

Intellectual property (IP) and commercial agreements

• Protect trademarks, copyrights, patents, and trade secrets under relevant laws.
• Ensure contracts with employees and vendors specify clear IP ownership and licensing terms to prevent disputes.

Location-specific and industry Regulations

• Depending on the GCC’s industry and location, check if any sector-specific licenses or certifications are needed.
• Consider states offering incentives like tax breaks and regulatory benefits.

Strategic tips for a smooth GCC setup

• Plan entity registration and compliance timelines like company formation (0 to 30 days), employment and payroll setup (15 to 60 days), and data protection (30 to 120 days).
• Set up a dedicated compliance team to conduct regular audits and to stay updated with regulatory changes.
• Take advantage of government incentives and location benefits to reduce costs and increase growth prospects.
• Take help from legal experts to draft clear employment contracts and commercial agreements.

Conclusion

This legal and compliance guide explains the complex process of setting up a GCC in India, with a focus on a compliance and legal checklist for new GCC setup. Make sure to follow this roadmap to ensure your GCC benefits from India’s business environment while avoiding costly legal challenges.

WeWork can help by providing ready-to-use offices, legal partner support, and flexible workspaces across big Indian cities. With the right legal steps and timely compliance, companies can set up their GCCs easily and eventually focus on growth.