A Global Capability Centre (GCC) is a captive team in India that does technology, finance, analytics or operations work for the Singapore group, and the usual form is an Indian subsidiary paid cost plus a mark-up. The legal work is the same as for any subsidiary, but three issues decide success: pricing that survives Indian and Singapore transfer pricing review, export-of-services treatment for GST, and keeping Singapore managers from creating a permanent establishment. Regulated Singapore financial groups also need MAS outsourcing controls.
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Key facts
| Models | Captive subsidiary; build-operate-transfer with a partner; hybrid or shared service with a partner running part of the operation |
|---|---|
| Pricing | Cost plus a mark-up from benchmarking, usually under a services agreement with the Singapore entity |
| GST | Services supplied to a recipient outside India, paid in convertible foreign exchange, can be zero-rated as exports if the conditions are met |
| PE risk | Singapore staff who direct or conclude contracts in India can create a taxable presence |
| Regulation | MAS outsourcing expectations for financial institutions; Indian sector rules if the work touches Indian customers |
| Talent | Large technical hiring pools in several Indian cities; wage inflation and attrition need budgeting |
The three models
| Model | How it works | Best for | Watch for |
|---|---|---|---|
| Captive subsidiary | You own and run the Indian entity | Core functions, long-term, high control | Set-up time and management bandwidth |
| Build-operate-transfer | A partner builds and runs the centre, then transfers it to you | Speed and low initial risk | Transfer terms, tax on the transfer, knowledge ownership |
| Hybrid | You hold the entity; a partner runs part of operations | Mixed models while you build capability | Split responsibilities; data access |
Pricing the centre
- The Indian entity is normally characterised as a low-risk service provider paid cost plus a mark-up.
- The mark-up comes from a benchmarking study of independent companies with similar functions, and is reviewed each year.
- IRAS accepts a published mark-up for routine support services on the Singapore side; India still wants its own benchmarking. See transfer pricing.
- Document the service scope, hours and cost base, and keep time and cost records for audit.
Indian GST on exports of services
A supply of services by the Indian entity to the Singapore group can be zero-rated as an export if the recipient is outside India, the service is delivered there, payment is in convertible foreign exchange and the supplier and recipient are not merely establishments of a distinct person. The last point matters for a branch. A subsidiary is a separate person, so the structure helps. File the right documents and claim input credit refunds.
Avoiding a permanent establishment
- Keep contract-making authority with the Indian entity for Indian customers and with the Singapore entity for Singapore customers.
- Do not let Singapore staff run the Indian team day to day from India beyond defined visit days.
- Keep intercompany agreements, invoices and board minutes consistent with the stated risk profile.
- Review the thresholds in the tax treaty guide: services staff above 90 days (30 days for services to an associated enterprise) are a risk.
Controls for regulated groups
- Document the outsourcing arrangement, the risk assessment and the exit plan for MAS-regulated entities.
- Make sure the Indian entity can give your auditors and regulators access to records and premises.
- Test business continuity from the Indian site.
- Align data security with the data protection programme. See PDPA and DPDP.
A practical start
- Define scope: functions, headcount in years one to three, and the target cost.
- Choose the city, the premises model (managed office, coworking or own lease) and the hiring plan.
- Form the subsidiary and sign the services agreement before work starts.
- Hire leaders first, then the team, with a knowledge transfer plan from Singapore.
- Review the pricing and the tax position after the first year.
Official sources
Check the rules at the primary sources: Income Tax Department (India), Reserve Bank of India, Ministry of Corporate Affairs, IRAS, ACRA and the Singapore Academy of Law (apostilles).
Frequently asked questions
What is a Global Capability Centre?
A captive team in India that performs technology, finance, analytics or operations work for the parent group. The usual form is an Indian subsidiary paid cost plus a mark-up.
How is a GCC priced for tax?
Normally cost plus a mark-up from a benchmarking study, under a services agreement with the Singapore entity, and reviewed each year.
Are GCC services to Singapore exempt from GST in India?
They can be zero-rated as exports of services if the recipient is outside India, payment is in convertible foreign exchange and the other conditions are met.
Does a GCC create a permanent establishment for the Singapore parent?
Not by itself if the Indian entity is a separate low-risk provider, but Singapore staff directing the work or concluding contracts in India can create one.
Does MAS regulate a captive centre in India?
MAS regulates the Singapore financial institution, and expects outsourcing controls over work done by a group company in India.
Should we use build-operate-transfer?
It reduces early risk and time, but check the transfer terms, tax on the transfer and who owns the know-how.
Related guides
Transfer Pricing Between a Singapore Parent and an Indian Subsidiary: What India Requires and Where Singapore Differs
How transfer pricing works between Singapore and India: Indian arm's length rules, Form 48, documentation, master file, safe harbours, IRAS routine support mark-up, APAs and the mutual agreement route.
Read the guide →Moving Personal Data Between Singapore and India: PDPA Transfer Rules and the DPDP Act
How Singapore's PDPA and India's Digital Personal Data Protection Act apply when a Singapore company has an Indian subsidiary: transfer limitation, contracts, breach notice, consent, penalties and a build plan.
Read the guide →Hiring in India as a Singapore Employer: What Changes from Singapore Practice
A comparison for Singapore HR teams hiring in India: employment contracts, provident fund, ESI, gratuity, labour codes, notice and termination, payroll tax and share plans, set against Singapore practice.
Read the guide →Which Structure Should a Singapore Company Use in India? Subsidiary, Branch, Liaison Office, LLP, GIFT City or Employer of Record
A decision guide for Singapore companies: wholly owned subsidiary, branch, liaison office, LLP, GIFT City IFSC unit and EOR, with eligibility tests, tax results and a choice by business model.
Read the guide →Sources
Last updated 21 October 2026. General information only, not legal or tax advice. Indian and Singapore rules change often; confirm current requirements before acting.