GCC - Global Capacity Center, basically instead of outsourcing to WITCH or EPAM, a company creates an entire office abroad that owns profit-loss, product roadmap, has executives present, and is a direct part of the company.
NCG - New College Grad
You ain't dense btw, it's a good question. Keep asking questions!
The big issue with outsourcing to WITCH or EPAM was you were essentially paying $30k-50k per head but getting the lowest tier of talent becuase those companies would pay around $5k-15k salaries to maximize their margins.
As such, companies decided to just open offices in India, Poland, Czechia, etc to poach talent in those countries because people are only productive if well remunerated, and remove the middle man out of it.
Ofc, the traditional Indian outsourcing companies like TCS [0] and HCL [1] have also begun pivoting away from Software outsourcing towards becoming end-to-end chip design companies, Infosys pivoting to becoming an end-to-end MedTech company [2], and Wipro becoming an aviation and defense manufacturer [3][4] because of a mix of Indian government subsidizes and Taiwanese, Japanese, and American FDI.
You can consider it a branch. It has all sorts of advantages like tax avoidance (you pay them the expenses - salaries and office cost - and zero profits to pay taxes on), you can fire them all if you want, especially if it is fairly small and replaceable. And you can sell the dream of promotion space in a large company, but they will almost never get that. And you cut the middleman and keep the money.
> sorts of advantages like tax avoidance (you pay them the expenses - salaries and office cost - and zero profits to pay taxes on)
Nope.
Subsidiaries need to pay domestic taxes which in a lot of cases are significantly higher than those in the US. That said, countries like Czechia, Poland, and India help by covering the cost of each employee per head depending on amount spent.
> you can fire them all if you want
Nope.
In my past experience, we need to follow domestic labor laws and they do not budge on hiring or firing in Czechia, Poland, Israel, or India. Ofc, the financial hit of hiring the wrong person is much lower there than in the US, and unlike the US those jurisdictions provide a single window or tribunal dedicated to disputes foreign investors may face.
Same with the UK and the film industry.
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Basically, American jurisdictions became significantly non-responsive to services businesses after COVID and the 2020 election because white collar industries just didn't matter politically speaking (they represented a fraction of hiring and jobs in most competitive seats).
The same kinds of hand-holding support I mentioned above used to be provided by jurisdictions like NC, the Bay Area, NY, TX, etc, but local politicians don't care anymore and local and state governments are severely backlogged and attritted significant amount of personnel who understood business promotion.
NCG - New College Grad
You ain't dense btw, it's a good question. Keep asking questions!