Understanding various options available to create an India GCC

Expanding your business to India can be a great way to tap into a growing talent pool and reduce operational costs. However, when it comes to building a team in India, the process can seem daunting. Whether you're establishing a Global Capability Center (GCC) or simply hiring a local team, it's important to understand the various options available for setting up operations in India.

In this blog, we will explore four main options for hiring a team in India, helping you make an informed decision based on your business needs, legal requirements, and growth goals.

1. Forming a Subsidiary in India

Setting Up a Local Entity

One of the most common methods for establishing a presence in India is by setting up a subsidiary. A subsidiary is a separate legal entity registered under Indian laws, which can employ staff, manage local operations, and conduct business activities.

Key Benefits:

• Full control: You have full ownership and control over the operations, team, and decision-making processes.
• Local presence: A subsidiary gives your company a recognized presence in the Indian market, which can help with credibility and business development.
• Flexibility in team management: You can directly hire employees and implement your company culture and processes.

Challenges:

• Compliance: Setting up a subsidiary requires navigating India’s complex legal and regulatory environment, including tax filings, labor laws, and corporate compliance.
• Initial costs: The setup process can be expensive, involving legal fees, registration, and overhead costs.
• Ongoing management: Managing a subsidiary requires a dedicated team to handle local compliance, HR, and financial reporting.

2. Employer of Record (EoR) Platform

Simplifying Team Management with EoR Solutions

Another option is partnering with an Employer of Record (EoR) platform like Rapid or UR. An EoR acts as the legal employer of your team in India, handling all administrative tasks, compliance, payroll, and taxation. This allows your company to hire employees in India without having to establish a subsidiary or deal with the complexities of local employment laws.

Key Benefits:

• Speed and simplicity: With an EoR, you can quickly hire employees without setting up a formal legal entity in India.
• Compliance assurance: The EoR takes care of all compliance-related aspects, including local labor laws, taxes, and insurance, ensuring that your company operates within Indian regulations.
• Cost-effectiveness: You don’t have to bear the expenses and administrative burden of setting up a subsidiary.

Challenges:

• Less control: While the EoR handles compliance, your company may have less control over the legal and administrative aspects of your team.
• Dependence on third-party: You rely on the EoR for HR and compliance matters, which may limit flexibility in certain situations.

3. Hiring Contractors or Consultants

Flexibility with Contractors

Hiring contractors or consultants in India can be a more flexible and cost-effective option, especially if you need to scale your team up or down quickly. Contractors are not full-time employees, but rather independent workers who are typically paid on a project basis or hourly rate.

Key Benefits:

• Lower costs: Contractors don’t require the same benefits and statutory compliance as full-time employees, making them a more affordable option.
• Flexibility: Contractors can be hired for short-term projects or on an as-needed basis, allowing you to scale your team based on business requirements.
• Quick onboarding: Hiring contractors is faster than setting up a full-time team, making it ideal for urgent or specialized projects.

Challenges:

• Limited control over work: Since contractors are not full-time employees, you may have less control over their work hours and the quality of their output.
• Compliance risks: While contractors don’t fall under the same employment regulations as full-time employees, you still need to ensure compliance with Indian tax laws and avoid misclassification risks.
• Limited commitment: Contractors are typically not as committed to the company’s long-term vision and may not be as invested in the company’s culture.

4. Outsourcing to a Software Development Agency

Leveraging Specialized Talent Through Outsourcing

If your focus is primarily on software development or tech services, you can consider outsourcing your requirements to a software development agency in India. These agencies typically have pre-built teams of developers, designers, and project managers who can work on your project on a contract basis.

Key Benefits:

• Speed to market: Outsourcing allows you to quickly launch products and services without having to build a full team from scratch.
• Access to specialized skills: Agencies have skilled teams with expertise in various technologies and methodologies, ensuring high-quality deliverables.
• Lower overhead: Outsourcing eliminates the need to manage a full-time workforce and the associated administrative tasks.

Challenges:

• Less control: When outsourcing, you may have less direct control over the day-to-day operations and quality assurance.
• Communication barriers: Depending on the agency, there could be language or cultural differences that may impact communication and collaboration.
• Dependency on external party: Outsourcing your development needs means relying on an external party to execute your vision, which can sometimes lead to delays or misunderstandings.

Conclusion

When considering building a Global Capability Center (GCC) or hiring a team in India, it’s essential to evaluate the options that best align with your business goals, timeline, and available resources.

• If you need full control and long-term presence, forming a subsidiary might be the best route.
• For companies seeking compliance and operational efficiency without the complexity of setting up a subsidiary, partnering with an Employer of Record (EoR) platform is an attractive option.
• If you need flexibility and cost-effectiveness, hiring contractors or consultants can be a viable solution.
• For specialized tech development, outsourcing to a software agency can give you access to top-tier talent.

By carefully evaluating each option, you can choose the best strategy for creating your India GCC, ensuring your company’s successful expansion and long-term growth in the region.