Build Operate Transfer (BOT) in India: 2026 GCC Guide

Build operate transfer (BOT) in India is a way to set up a global capability centre (GCC) where a local partner builds the centre, runs it for an agreed period, and then hands the team, systems and usually the legal entity to you. You get speed and local know-how at the start and full ownership at the end. The part most BOT providers gloss over is the transfer itself: it is a regulated cross-border acquisition, with FEMA pricing rules, RBI reporting, employee-transfer law and tax consequences. Plan it on day one, not in month eighteen.

Key points

• BOT has three phases: build (entity, office, hiring), operate (the partner runs delivery to your targets) and transfer (ownership moves to you).
• There are three ways to hold the centre during BOT: in your own subsidiary from day one, in a partner-owned company you buy later, or inside the partner's own company. The choice decides how hard the transfer is.
• Buying shares of an Indian company from an Indian resident must be at or above fair value, and Form FC-TRS is due within 60 days.
• India's four Labour Codes, in force since 21 November 2025, govern how employees move on transfer. Under the Industrial Relations Code, transfer without continuity of terms can trigger compensation as if workers were retrenched.
• For a small team that may stay small, an Employer of Record or your own lean entity is often simpler and cheaper than BOT.

What is the build operate transfer model in India?

BOT is a contract model, not a legal form. A specialist partner in India agrees to set up an operation for you, staff it, run it to agreed service levels, and transfer it to you at a defined point or on your call. It sits between two familiar options: outsourcing, where a vendor owns the people and the capability indefinitely, and a captive, where you own everything from the first hire.

The model has become a standard route for mid-sized companies building their first India centre, because it lets a UK, European or US company start without an India HR, legal and finance team of its own. Our guide to global capability centres in India covers the wider GCC decision; this article focuses on BOT specifically.

How do the three BOT phases work?

Build

The partner selects the city and office, incorporates or allocates the entity, sets up payroll, statutory registrations and IT, and hires the first team against your job profiles. Wisemonk, a BOT provider, quotes 8 to 12 weeks for the build phase on its own site. Treat any timeline as a planning range: entity incorporation, bank accounts and senior hires are the usual bottlenecks.

Operate

The partner employs or manages the team and runs HR, payroll, compliance, facilities and often recruitment, while your managers direct the work. You pay a management fee on top of costs. This phase is where you test whether India works for you before taking on the full overhead.

Transfer

Ownership moves to you. Depending on the structure, that means buying the shares of the Indian company, buying the business out of the partner's company, or simply ending the management agreement because you already own the entity. Wisemonk's published range for a full BOT cycle is 6 to 18 months; many contracts give the client a call option exercisable after a minimum period instead of a fixed date.

BOT vs own entity vs EOR vs outsourcing: which fits?

If you are still deciding between a vendor and your own team, our article on Employer of Record in India explains where EOR stops making sense, and GCC setup cost in India breaks down what an owned centre costs to run.

Whose entity? The three BOT ownership structures

This is the single most important design choice in a BOT contract, and the one that page-one BOT guides rarely compare.

Structure A has become popular with companies that want BOT's speed without a share purchase at the end. Structure B is the classic BOT and gives the cleanest legal separation during operate. Structure C looks cheapest at the start and is the hardest to unwind, a point also made in the Legal 500 analysis of GCC structures.

What happens legally on transfer day?

FEMA pricing and RBI reporting

When a person resident outside India, such as your UK or US parent, buys shares of an unlisted Indian company from a resident seller, the price cannot be lower than fair value worked out under an internationally accepted pricing methodology on an arm's length basis and certified by a Chartered Accountant or SEBI-registered merchant banker, under the RBI Master Direction on Foreign Investment in India. The transfer is reported in Form FC-TRS through your authorised dealer bank within sixty days of the transfer of the shares or receipt or remittance of funds, whichever is earlier. If you are entering India for the first time, see FDI in India for UK companies for the wider rules.

Employees

India's four Labour Codes came into force on 21 November 2025, replacing 29 older labour laws. Section 73 of the Industrial Relations Code, 2020 deals with transfer of an establishment: a worker with more than one year of continuous service who is transferred to a new employer is entitled to notice and compensation as if retrenched, at 15 days' average pay for every completed year of service, unless service is continuous and terms are no less favourable after the transfer. In a share purchase (Structure B), the employer does not change, so this rarely bites. In a business transfer (Structure C), it is central: every employee must move with continuity of service, the same or better terms, and recognition of past service for gratuity and leave.

The Labour Codes also extended gratuity to fixed-term employees after one year of continuous service. If your partner hired on fixed-term contracts during the build phase, that accrued liability belongs in the transfer price.

IP, contracts and data

Every deliverable created during operate should already be assigned to you under the BOT contract, not merely licensed. On transfer, check that software licences, office leases and vendor contracts are assignable or in the right entity's name, and that data processing arrangements still work under India's Digital Personal Data Protection Act, 2023.

Worked example: a share-purchase transfer

A UK software company has run a 45-person engineering centre through a partner-owned Indian private limited company (Structure B) and exercises its call option.

1. Valuation. A Chartered Accountant values the company at ₹3.2 crore on an internationally accepted method. Under the FEMA pricing rule, the UK parent cannot pay the resident seller less than that figure. If the contract formula would give a lower price, the formula has to give way.
2. Completion. The share purchase agreement is signed and the UK parent remits the consideration on 2 March.
3. Reporting. Form FC-TRS is due within 60 days, so by 1 May at the latest. Stamp duty on the share transfer is paid, and directors, bank signatories and the registered office are changed with the Registrar of Companies.
4. Afterwards. The Indian company is now foreign-owned: annual FDI reporting starts, and every charge between it and the UK parent is a related-party transaction under transfer pricing rules.

How is a BOT centre taxed during and after the transfer?

GST on the BOT fee. During operate, the partner invoices you for its services. Where the partner supplies services on its own account to a client outside India and the conditions for export of services are met, including the place of supply being outside India and payment in convertible foreign exchange, the supply can be zero-rated. Our guide to export of services under GST explains the conditions and the LUT.

Transfer pricing after transfer. Once you own the entity, it is a captive service provider to your group, usually remunerated on a cost-plus basis. The mark-up has to be defended each year with documentation, or covered by India's safe harbour rules where they apply. See our transfer pricing services in India.

Permanent establishment. Your managers directing an Indian team does not by itself create a taxable presence for your foreign company, but secondees spending long periods in India, or Indian staff negotiating and concluding contracts for the parent, can. Some of India's treaties, including the India–UK DTAA, contain a service PE clause. Our article on when expansion creates tax presence sets out the tests.

BOT contract checklist

• Which ownership structure (A, B or C) applies, and in whose name every registration, lease and bank account sits.
• Call option: earliest exercise date, notice period, and whether you can exercise early for cause.
• Transfer price formula, with an express clause that FEMA fair value prevails if higher.
• Who pays for the valuation report, stamp duty and any regularisation of past compliance gaps.
• IP assignment of all work product from day one.
• Employee terms: no hiring on terms you would not match after transfer; non-solicit protection for the partner limited to its own staff.
• Accrued gratuity, leave and bonus liabilities: how they are measured and funded on transfer.
• Monthly compliance reporting from the partner (payroll, PF, ESI, professional tax, GST, TDS), with audit rights.
• Exit if the centre does not perform: wind-down costs and who keeps the team.

How much does BOT cost?

BOT pricing usually has three parts: a one-off build fee, a monthly management fee charged as a mark-up on cost or per head during operate, and a transfer or buy-out fee. Published figures come from providers and vary widely with team size and city, so compare quotes on a like-for-like basis: the full cost per head per month during operate, plus the total exit cost on transfer, including valuation, stamp duty and any accrued employee liabilities. The underlying run cost of the centre itself is the same whichever model you choose; we break it down in GCC setup cost in India, and benefits budgeting is covered in employee benefits in India for foreign companies.

When should you not use build operate transfer?

• The team will stay small. For ten or fifteen people, the BOT fee and the transfer process cost more than an EOR or a small subsidiary with outsourced payroll and accounting.
• The work is regulated or data-sensitive from day one. If your regulator or customers expect you to own and control the entity immediately, start with Structure A or your own subsidiary.
• You already have India experience. If your group has run an Indian entity before, you are paying for a capability you have.
• The partner insists on Structure C. Transferring a division out of the partner's own company is the costliest exit, with the most employee and re-registration risk.

The Greenwolf view

We start from what the India centre is for: cost, capability, or market access, and how central it will be in three years. Tax and legal design follow those functions. For most mid-sized UK and European companies, we prefer a structure where the client owns the Indian entity from day one and a partner provides set-up and operations under contract: it gives BOT's speed while removing the share purchase, valuation and FC-TRS steps from the end. Where a partner-owned SPV is genuinely better, we build the transfer mechanics, price floor and employee terms into the contract before the first hire.

Planning an India centre? Greenwolf Advisors sets up and maintains the Indian entity, structures BOT and assisted-captive contracts, handles FDI and FC-TRS reporting, and puts transfer pricing in place from the first invoice. See our global capability centre in India services and the UK–India corridor, or talk to our team.

This article is general information, not advice for a specific case.