Captive vs build-operate-transfer for a GCC in India

What is the difference between a captive centre and build-operate-transfer?

In a captive model, the parent sets up its own Indian subsidiary, hires the team, leases the space and builds the processes itself. You own and control the centre from day one. In build-operate-transfer (BOT), a partner builds and runs the centre for an agreed period, and ownership then transfers to the parent.

These are commercial models, not legal categories. Providers describe them differently.

How do the two models compare?

When does a captive centre suit you?

A captive centre suits you if intellectual property sensitivity is high, or if your company already runs international operations and has leaders who can direct an Indian build. It is also the clearer choice if you know from the start that the centre will be a permanent, growing part of the group and you want full control of hiring, culture and processes.

It does not suit you if your leadership has little time to manage a new entity, or if you need results before you can justify a full standalone build.

When does build-operate-transfer suit you?

BOT suits a group with limited GCC experience, tight leadership bandwidth or a wish to launch with lower upfront cost. The partner carries the early build, and you take over once the centre is stable.

It does not suit you if the work involves highly sensitive IP that cannot sit under a partner’s control, or if you are not ready to negotiate the transfer terms in detail. The contract needs to settle IP ownership, data handling, staff transfer and the price and timing of the handover before the build starts.

What about hybrid or EOR-first approaches?

Some groups start with a partner-run team while their own entity is being readied. Descriptions of this hybrid approach vary by provider, and it is not a defined legal category, so treat it as a plan for phasing, not a legal structure.

For very small early teams, an Employer of Record (EOR) can be a starting point, with an entity set up later. The EOR versus subsidiary comparison covers when each makes sense. A GCC of any scale, or one with contract authority or IP ownership, will need a subsidiary.

What legal and tax points apply either way?

Settle these before you choose:

• Legal vehicle. The centre normally ends up as a wholly owned Indian subsidiary. See the wholly owned subsidiary page.
• The transfer step in BOT. If the handover is a sale of shares by a resident to a non-resident, FEMA reporting applies (FC-TRS within 60 days), as do valuation, pricing and tax rules for the transfer.
• Permanent establishment. Neither model removes the question. It depends on conduct, such as who concludes contracts.
• Transfer pricing. A GCC serving its parent has international transactions, so a transfer-pricing report on Form 48 applies. See the transfer pricing guide.
• Employment. The four Labour Codes came into force on 21 November 2025, and final central rules were notified on 8 May 2026. State rules are still being notified. Check the mechanics of employee transfer in a BOT with a labour lawyer. See the hiring guide.

How can ProLead help with either model?

We have done both in the past.

• Captive. ProLead can incorporate your Indian subsidiary like any other subsidiary, then support its registrations, FEMA filings and ongoing compliance. See the wholly owned subsidiary page.
• Build-operate-transfer. ProLead can be the partner that builds and runs the centre for the agreed period, and at a later point transfer it to the parent.

To discuss which model fits, book a free consultation.

Note: Rules and forms change often. This page is general information, not legal or tax advice. Check the current position with a practising Chartered Accountant or Company Secretary before you act.

General information only, not legal or tax advice. Rules and forms change, so confirm the current position with a practising Chartered Accountant or Company Secretary before you act. See our disclaimer.