The main difference between EOR and GCC is control and speed: EOR lets you hire in India within days without setting up a legal entity, while GCC gives you full ownership and control but requires 6-18 months for entity setup and significant upfront investment
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Looking to expand into India but unsure whether to use an EOR or set up a GCC? With India hosting 1,700+ global capability centers and the market projected to hit $100 billion by 2030, this decision shapes your speed, control, and total cost.
We've helped hundreds of companies make this choice at Wisemonk. This guide breaks down when to choose an employer of record for fast market entry versus when a captive GCC makes sense, and how to transition between both.
What is an Employer of Record (EOR)?[toc=Employer of Record India]
An Employer of Record (EOR) is a third-party provider that legally employs staff on your behalf in India, handling contracts, payroll, taxes, benefits and compliance, while your company directs their day-to-day work.
EOR gives you fast market entry and access to India's talent pool without the complexity of setting up your own entity.
Refer to this detailed guide on "Employer of Record (EOR) in India" to get a clear understanding of an EOR in India.
Read more: What is the Cost of EOR in India? | EOR Pricing Guide
Now that we've seen how EOR works, let's look at the alternative, building your own presence in India.
What is a Global Capability Center (GCC)?[toc=GCC Setup in India]
A global capability center (GCC) is your own legal entity in India that operates as a fully-owned extension of your company, handling high-value functions like engineering, data science, analytics, or R&D with complete control over IP ownership, culture, and strategic direction.
This captive model requires entity registration, office infrastructure, local leadership, and managing ongoing regulatory compliance yourself.
GCC offers maximum control and full ownership but demands significant upfront investment and long term commitment.
For a detailed guide on GCC setup in India, refer to this guide on "Global Capability Center (GCC) in India: A Complete Guide"
Read more: How much does it cost to set up a GCC in India ?
Now that we understand both models, let's compare them side-by-side to see which fits your expansion needs.
GCC vs. EOR: Comparison[toc=GCC vs EOR]
Here's how the two models stack up across the factors that matter most for your India expansion:
EOR wins on speed and lower risk, GCC wins on complete control and long-term cost structure.
Read more: Employer of Record vs Own Entity in 2026
So when should you actually choose each model? Let's break down the scenarios where each makes the most sense.
When to Choose an EOR?[toc=When Choose EOR]
The EOR model is the smartest path when you need fast market entry with lower risk and minimal upfront investment.
Choose EOR if:
- You need to hire quickly, within days or weeks, not months
- You want to avoid entity setup, legal processes, and regulatory compliance headaches
- Your team will stay small (pilot teams, specialists, or testing the Indian market)
- You're exploring new markets before making a long term commitment
- You value flexibility to scale up, down, or exit with minimal risk exposure
Best for: Startups, global companies testing India expansion, or businesses that want to access talent without heavy foreign investment.
EOR services let you hire quickly and stay agile, perfect when speed matters more than complete control.
Read more: How to Choose an Employer of Record (EOR)?
Many companies also explore offshoring to India as a broader strategy for accessing talent and reducing costs.
But what if India is central to your business goals and you're ready for the long haul?
When to setup a Global Capability Center in India?[toc=When Setup a GCC]
A captive GCC makes sense when India becomes a strategic part of your global footprint with long term commitment.
Choose GCC if:
- You're building a large, stable workforce (50+ employees scaling to hundreds)
- You need full control over IP ownership, cultural integration, and strategic direction
- You want strong India presence and local brand visibility in major tech hubs
- You're ready for entity registration, local leadership, and managing regulatory compliance
- You expect cost advantages at scale that justify the upfront investment
Best for: Established enterprises, global capability centers focused on engineering, data science, or proprietary technology development.
The captive model gives you maximum control and full ownership, ideal when India is core to your operating model.
For companies planning this route, our complete guide on establishing captive centers in India walks through the entire setup process.
Understanding the difference between outsourcing vs offshoring also helps clarify your strategic options.
Many successful companies don't choose one or the other, they use both. Let's see how.
Can you switch from EOR to GCC?[toc=Switch From EOR to GCC]
Absolutely, and many successful companies use this phased approach to reduce early risk while building toward complete control.
You start with the EOR model for fast market entry and test the Indian market with a small team. Once you reach critical mass (usually 30-50 employees) and validate your business goals, you transition to a captive GCC with your own legal entity.
This hybrid model lets you avoid heavy upfront investment early on while building operational readiness. When you're ready, proper transition planning helps move employment contracts and ensure local compliance as your entity comes live.
Some companies take this further with a Build-Operate-Transfer (BOT) model. Here, a specialized partner builds and operates your India entity initially, then transfers full ownership once you reach sustainable scale. This approach combines EOR's speed with GCC's long-term control while minimizing setup complexity.
Best of both worlds: You get the speed of EOR services now and the full control of the GCC model later, whether through direct transition or BOT.
Read more: How to Switch Employer of Record in 2025? Step-by-Step
The phased approach is becoming the standard playbook, start lean, scale smart, then own your infrastructure when it makes financial sense.
How to choose between EOR and GCC?[toc=How to Choose]
Use this quick checklist to figure out which expansion model aligns with your business goals and risk tolerance.
Ask yourself:
Speed: How quickly do you need to start operations in India? If it's weeks, not months, the employer of record wins. If you can wait 6-18 months for entity setup, a GCC works.
Team Size: What's your expected headcount in 1-3 years? Small teams (under 30) work better with EOR services. Large teams (50+) justify the cost structure of your own entity.
Control Needs: How important is complete control over employment contracts, company culture, and IP protection? If it's critical, the captive model is the right model. If moderate control works, stick with EOR.
Investment Capacity: How much can you invest upfront? EOR requires minimal capital, just per-employee fees. GCC needs significant foreign investment for legal setup, office space, and local leadership.
Exit Strategy: Do you want flexibility to exit easily? The EOR agreement lets you walk away cleanly. A local entity takes years to wind down and increases risk exposure.
Your answers reveal whether you need the agility of an employer of record (EOR) or the stability justify of building your own legal employer.
Get starter with Wisemonk EOR[toc=Wisemonk EOR]
Wisemonk simplifies your India expansion whether you need fast market entry through EOR services or want to build your own GCC. We handle everything from employment contracts and local compliance to entity setup and talent acquisition across major tech hubs.
Start with our employer of record at $99/month per employee, or build your global capability centre with full support for legal setup and operational readiness. We've helped 300+ global companies with $20M+ in monthly payroll, and many successful companies use our phased approach, starting with EOR and transitioning to their own entity when ready.
Ready to expand into India? Contact Wisemonk today and get started in days, not months.
Frequently asked questions
What are the downsides of relying on EORs long-term, and how do their costs compare to GCCs at scale?
EOR costs become expensive at scale, fees typically run 10-15% of payroll, which adds up fast with larger teams. Once you hit 40-50+ employees, a GCC becomes more cost-effective despite higher upfront investment, plus you gain complete control over IP ownership and company culture.
What challenges do firms face transitioning from EOR to GCC?
The biggest challenges are transferring employment contracts without disrupting operations and managing the 6-8 month entity setup timeline while maintaining business continuity. You'll also need to establish local leadership, set up payroll systems, and ensure all employees transition smoothly without gaps in compliance or benefits.
What are the typical steps to transition from EOR to GCC?
Start by registering your legal entity in India (6-18 months), then gradually transfer employees from EOR contracts to your own payroll while setting up HR systems, compliance processes, and local infrastructure. Most companies keep the EOR active during transition to avoid any employment gaps, then fully migrate once the entity is operational.
How does the choice of location within India affect the transition from EOR to GCC?
Major tech hubs like Bengaluru, Hyderabad, and Pune offer better talent pools and mature infrastructure, making GCC setup faster with government incentives and established vendor ecosystems. Tier-2 cities offer 20-30% lower costs but may require more time to build local teams and navigate less developed business infrastructure.
How much does it cost to set up a GCC in India?
Initial GCC setup costs range from $50,000-$150,000 including entity registration, legal compliance, office space, and infrastructure. Ongoing annual costs add another $100,000-$200,000 for a 50-person team, but per-employee costs drop significantly compared to EOR as you scale.
What is the minimum team size to justify setting up a GCC in India?
Most companies find a GCC financially viable at 40-50+ employees, where the per-employee cost structure beats EOR fees. Below 30 employees, EOR services typically offer better ROI unless you have specific IP protection or control requirements that justify earlier entity setup.
Can I use both EOR and GCC simultaneously in India?
Yes, many companies run hybrid models, using their GCC for core teams while keeping EOR for pilot projects, short-term hires, or testing new locations. This gives you flexibility to scale different functions at different speeds while maintaining compliance across both models.
