GCC Compliance Checklist: ROC, FEMA, Tax & Employment from Day One

Why Compliance Is Non-Negotiable for GCCs in India

India's regulatory framework for companies with foreign investment spans five distinct compliance domains: corporate law (Companies Act, 2013), foreign exchange regulations (FEMA), direct and indirect taxation, employment and labour law, and data protection. A Global Capability Center structured as a private limited company — the structure used by over 90% of GCCs — must simultaneously satisfy all five domains from the date of incorporation.

The consequences of non-compliance are material. Late filing of annual returns with the Registrar of Companies (ROC) attracts a penalty of INR 100 per day with no maximum cap. FEMA violations can result in penalties up to three times the transaction amount. Transfer pricing non-compliance triggers penalties of 100-300% of the tax on the adjustment amount. And under the new Labour Codes effective from November 2025, employment law violations can result in fines up to INR 5 lakh and imprisonment.

This checklist organizes every compliance obligation chronologically — from the day your GCC is incorporated through Year One — so that your legal, finance, and HR teams know exactly what to file, when to file it, and what happens if they do not.

ROC and Companies Act Compliance

The Registrar of Companies (ROC) administers compliance under the Companies Act, 2013. All filings are submitted electronically through the MCA21 portal. For GCCs structured as private limited companies, the following obligations apply from Day One.

Incorporation and Post-Incorporation Filings

The SPICe+ form handles company incorporation, PAN, TAN, GST registration, EPFO, and ESIC registration in a single integrated filing. Within 30 days of incorporation, the company must file the following:

• INC-20A: Declaration for commencement of business — must be filed within 180 days of incorporation, confirming that every subscriber to the memorandum has paid the value of shares agreed to be taken
• DIR-12: Appointment of directors — filed at the time of incorporation via SPICe+ but must be separately filed for any subsequent director changes
• ADT-1: Appointment of statutory auditor — must be filed within 15 days of the first AGM or within 30 days of incorporation (for initial auditor)

Ongoing ROC Compliance Calendar

Board Meeting Requirements

A GCC private limited company must hold a minimum of four board meetings per year with no more than 120 days between consecutive meetings. At least two directors must be physically present in India for quorum. Foreign directors can attend via video conferencing, but certain resolutions — such as approval of financial statements and the board's report — require physical presence and cannot be passed via video conference.

The company must maintain minutes of all board meetings, and these must be signed by the chairperson within 30 days. Minutes must be preserved for at least eight years from the date of the meeting.

Beneficial Ownership Disclosure

Under Section 90 of the Companies Act, any individual holding 10% or more beneficial interest in a company must file a declaration (BEN-1). The company must then file BEN-2 with the ROC within 30 days. For GCCs, this typically means the foreign parent company's ultimate beneficial owners must be disclosed. Non-compliance carries a penalty of INR 1 lakh plus INR 500 per day of continuing default.

FEMA and RBI Compliance

Every GCC with foreign investment must comply with the Foreign Exchange Management Act, 1999 and the regulations issued by the Reserve Bank of India. FEMA compliance is administered through the company's Authorized Dealer (AD) bank, which acts as the intermediary for all foreign exchange transactions and RBI filings.

Capital Infusion Reporting

When the foreign parent transfers equity capital to the Indian GCC subsidiary, the following reporting obligations are triggered:

The FC-GPR must be accompanied by a valuation certificate from a SEBI-registered merchant banker or a Chartered Accountant certifying that shares were issued at or above fair market value. For GCCs receiving initial capital, the share price must reflect at least the fair value determined using a DCF or NAV methodology prescribed by FEMA.

Ongoing FEMA Compliance

Beyond capital infusion, GCCs must comply with FEMA for all cross-border transactions including:

• Intercompany service payments: The transfer pricing arrangement between the GCC and parent must comply with FEMA's current account transaction rules. Payments for services must be supported by valid agreements and invoices.
• Royalty and licence fee remittances: If the GCC uses parent company IP under licence, royalty payments must comply with transfer pricing norms and be reported through the AD bank.
• Dividend repatriation: Dividends paid to the foreign parent are freely repatriable, but the company must ensure compliance with Section 123 of the Companies Act (dividends only from profits) and deduct applicable withholding tax before remittance.
• Annual Performance Report (APR): If the Indian entity holds any overseas subsidiaries or investments, an APR must be filed by December 31 annually.

FEMA penalties are severe: up to three times the amount of the contravention, or INR 2 lakh where the amount is not quantifiable, whichever is higher. The FEMA compounding process allows companies to regularize contraventions by paying a compounding fee, but the process is time-consuming and the fees can be significant. For comprehensive FEMA management, see our FEMA & RBI compliance services.

Tax Compliance: Income Tax, TDS, and Transfer Pricing

India's tax compliance framework for GCCs involves three major streams: corporate income tax, tax deducted at source (TDS), and transfer pricing documentation. Each has its own filing calendar and penalty structure.

Corporate Tax and Advance Tax

A GCC subsidiary structured as a private limited company pays corporate tax at the rate of 22% plus applicable surcharge and cess, resulting in an effective rate of 25.17% (under Section 115BAA). The 15% rate under Section 115BAB (effective 17.16%) applied only to new manufacturing companies that commenced production by 31 March 2024 and is closed to new entrants; in any case it does not apply to a typical IT/ITeS GCC.

Advance tax must be paid in quarterly instalments:

Failure to pay advance tax on time attracts interest under Section 234B (1% per month on shortfall from assessed tax) and Section 234C (1% per month for deferment of individual instalments).

TDS Compliance

GCCs must deduct tax at source on payments including employee salaries, rent, professional fees, contractor payments, and — critically — all payments to the foreign parent company under Section 195. Key TDS deadlines:

• TDS payment: By the 7th of the following month (April-February); March TDS by April 30
• TDS return (Form 24Q/26Q/27Q): Within 31 days of the end of each quarter
• Form 16/16A: TDS certificates to be issued within 15 days of the TDS return due date
• Form 15CA/15CB: Required for all cross-border remittances — 15CB is a CA certificate and 15CA is the online declaration

For payments to the foreign parent (intercompany services, royalties, dividends), the GCC must obtain a Form 15CB certificate from a Chartered Accountant before each remittance and file Form 15CA electronically. If a DTAA benefit is being claimed to reduce withholding tax, the GCC must hold a valid Tax Residency Certificate (TRC) from the parent company's jurisdiction.

Transfer Pricing Documentation

GCCs conducting intercompany transactions with their foreign parent must maintain comprehensive transfer pricing documentation demonstrating that all transactions are at arm's length. The documentation requirements depend on the aggregate value of international transactions:

Most GCCs will at minimum need a Transfer Pricing Study Report. The safe harbour rules updated for AY 2025-26 and AY 2026-27 allow a unified 15.5% cost-plus markup for IT and ITeS services, with the eligible threshold raised to INR 2,000 crore. GCCs within this threshold can opt for safe harbour to virtually eliminate transfer pricing disputes. For guidance on structuring your intercompany arrangement, see our transfer pricing services.

GST Compliance

A GCC providing services to its foreign parent company qualifies as an exporter of services under the GST framework, provided the payment is received in convertible foreign exchange and the place of supply is outside India. Export of services is zero-rated — no GST is payable on the output, and input tax credit on domestic procurement can be claimed as a refund.

GST Filing Calendar

GCCs should proactively file Letter of Undertaking (LUT) in Form RFD-11 before the start of each financial year to export services without payment of IGST. Without an LUT, the GCC would have to pay IGST on exports and then claim a refund — tying up working capital for months.

Late filing of GSTR-3B attracts a late fee of INR 50 per day (INR 25 each under CGST and SGST), capped at INR 10,000 per return. Additionally, interest at 18% per annum is levied on any late payment of GST liability.

Employment and Labour Law Compliance

India implemented four new Labour Codes on November 21, 2025, consolidating 29 older statutes. GCCs must comply with these codes from the date they hire their first employee.

Statutory Employee Benefits

Under the new Labour Codes, fixed-term employees must receive identical wages and benefits as permanent employees, and gratuity is now payable after just one year of service rather than the previous five-year threshold. This is particularly relevant for GCCs that use contract staffing for initial scaling.

POSH Act Compliance

The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 — commonly known as the POSH Act — requires every organization with 10 or more employees to constitute an Internal Complaints Committee (ICC). GCCs must:

• Constitute an ICC with a senior woman employee as presiding officer, at least two employee members, and one external member
• Conduct annual POSH awareness training for all employees
• File the annual POSH compliance report with the District Officer by January 31 each year
• Display information about the ICC and the complaint process in a conspicuous place at the workplace

Penalties for POSH non-compliance include fines up to INR 50,000 for the first offence, higher fines for repeat offences, and potential cancellation of the business licence.

Shops and Establishment Registration

Every commercial establishment in India must register under the relevant state's Shops and Establishments Act within 30 days of commencing operations. The registration must be renewed periodically (annually or every 3-5 years depending on the state). Failure to register attracts penalties ranging from INR 5,000 to INR 50,000 depending on the state.

Year-One Compliance Timeline for a New GCC

Here is a consolidated timeline of every compliance obligation for the first 12 months after a GCC is incorporated in India:

Common Compliance Failures and Their Consequences

Based on our experience with GCC clients, here are the most frequently missed compliance items and their real-world consequences:

Top 5 Compliance Failures

1. Missing FC-GPR deadline: Many GCCs receive capital from the parent but fail to file FC-GPR within the 30-day window. Regularization requires FEMA compounding — a process that takes 6-12 months and costs INR 50,000 to several lakhs in compounding fees, plus professional fees.
2. No transfer pricing documentation: GCCs that operate for 12+ months without preparing a transfer pricing study face penalties of 2% of the value of international transactions (minimum INR 1 lakh). When audited, the absence of documentation shifts the burden of proof to the taxpayer.
3. Late annual filings (AOC-4/MGT-7): The INR 100/day penalty has no cap. A company that misses both filings by 6 months accumulates approximately INR 36,000 in penalties. More critically, directors of non-compliant companies can be disqualified under Section 164(2).
4. Skipping POSH compliance: Failing to constitute an ICC is not just a legal violation — it creates significant liability if a harassment complaint arises. Courts have imposed exemplary damages on companies without functional ICCs.
5. Not filing Form 15CA/15CB for cross-border payments: Every remittance to the foreign parent — whether for services, royalty, or dividend — requires Form 15CA/15CB. Non-filing attracts a penalty of INR 1 lakh per default under Section 271-I.

Building Your Compliance Infrastructure

A GCC with 100+ employees typically engages the following external professionals to manage compliance:

• Statutory auditor (CA firm): Annual audit, tax return, transfer pricing study — INR 5-12 lakh per year
• Company secretary (CS): ROC filings, board meeting compliance, annual returns — INR 2-5 lakh per year
• FEMA advisor: FC-GPR, FLA returns, cross-border remittance advisory — INR 1-3 lakh per year
• Labour law consultant: EPF/ESI registration, POSH compliance, state-specific registrations — INR 1-2 lakh per year
• Total annual compliance cost: INR 9-22 lakh (approximately USD 10,500-26,000)

For end-to-end compliance management covering all five domains, our annual compliance services provide a single point of accountability with monthly reporting dashboards and proactive deadline tracking.

Key Takeaways

• GCC compliance spans five domains: ROC/Companies Act, FEMA/RBI, income tax and transfer pricing, GST, and employment law — with over 40 recurring obligations per year.
• FEMA penalties are the most severe: Up to three times the transaction amount for unreported foreign investment transactions, with compounding as the only regularization path.
• Transfer pricing is the highest-risk area: The safe harbour option at 15.5% cost-plus (up to INR 2,000 crore) can virtually eliminate disputes for most GCCs — but only if elected proactively.
• Employment law changed fundamentally in November 2025: Four new Labour Codes replaced 29 old laws, introducing gratuity after one year, equal benefits for fixed-term workers, and restructured EPF/ESI obligations.
• Total annual compliance cost is INR 9-22 lakh: A worthwhile investment considering that non-compliance penalties can run into crores for serious FEMA or transfer pricing violations.