Are you looking to expand your business by leveraging offshore capabilities? This step-by-step guide provides a clear roadmap to establishing a global capability center in the Philippines, one of the most strategic locations for scaling operations. By following this approach, you can enhance your business operations and gain a competitive advantage in the industry while also achieving substantial cost savings.
Related post: Why the Philippines Is the Top Destination for Global Capability Centers in 2025
What is a Global Capability Center and Why Choose the Philippines?
A global capability center is more than just an outsourcing hub; it’s an integrated offshore operation that serves as an extension of your organization. Contrary to traditional outsourcing, a GCC allows for greater control over your processes, operations, and intellectual property, while still taking advantage of global cost and talent efficiencies.
One country that continues to grow as an ideal location for GCCs is the Philippines. With the GCC market projected to reach USD 67.97 billion by 2032, the country is playing a central role in this growth. These are the several factors that make the nation a standard choice for companies looking to establish a GCC:
- A large, and highly educated pool of English-speaking professionals
- Lower labor and operational costs
- Strategic location in the Asia-Pacific region
- Strong government support and incentives for foreign investors
- Reliable and advanced digital infrastructure
- Cultural alignment with Western business values and practices
Together, these advantages make the Philippines not only a smart financial choice, but also a strategic one for long-term global expansion.
Step-by-Step Guide to Setting Up a Global Capability Center in the Philippines
To help you navigate your global capability center journey in the Philippines, here’s a cohesive guide that outlines each critical phase of the setup process:
Step 1: Strategic Planning and Assessment
Start by aligning the GCC initiative with your overall business objectives. A solid foundation begins with clarity:
- Define the strategic purpose of your GCC (e.g., cost reduction, innovation, scalability)
- Identify core functions to offshore (e.g., IT, customer support, finance).
- Choose the right operating model, whether it’s a captive center, build-operate-transfer (BOT), or hybrid.
- Establish measurable KPIs to track performance.
- Conduct a cost-benefit analysis to validate the investment.
Step 2: Legal and Regulatory Compliance
Next, navigate the legal framework to ensure smooth and compliant operations in the Philippines:
- Select the appropriate legal structure (wholly owned subsidiary, branch office, etc.).
- Register with the Philippine Economic Zone Authority (PEZA) to access incentives.
- Adhere to the Foreign Investments Act of 1991 and local corporate regulations.
- Obtain the necessary permits and licenses.
- Understand taxation policies and available fiscal incentives.
Step 3: Location Selection
The right location sets the tone for your GCC’s long-term success. Evaluate your options strategically:
- Consider key business hubs such as Metro Manila, Cebu, Clark, and Davao.
- Examine infrastructure reliability, including internet connectivity and transportation.
- Analyze real estate costs and the availability of suitable office space.
- Factor in quality-of-life considerations, especially for relocating staff.
Step 4: Infrastructure Setup
Once a location is chosen, it’s time to build a reliable infrastructure that supports operational resilience:
- Secure office space, preferably in PEZA-accredited zones for added incentives.
- Install effective internet and power systems to ensure uptime.
- Deploy IT infrastructure and cybersecurity systems.
- Set up cloud connectivity or establish on-site data centers.
- Design a comfortable, ergonomic, and collaborative work environment.
Step 5: Talent Acquisition and Management
People are the heart of any GCC. Building a strong, engaged workforce is key:
- Partner with an Employer of Record (EOR) or employee management provider to streamline hiring, onboarding, and compliance, especially in unfamiliar markets.
- Craft a recruitment strategy tailored to local market dynamics.
- Collaborate with universities and recruitment firms to source talent.
- Offer competitive compensation and benefits packages.
- Establish ongoing training and development initiatives.
- Create retention programs that nurture loyalty and reduce attrition.
Step 6: Technology Integration
Ensure your GCC is technologically aligned with global operations:
- Implement the required software systems and platforms.
- Integrate with your headquarters’ existing tech stack.
- Establish secure data transfer and storage protocols.
- Roll out collaboration tools for real-time communication.
- Automate repetitive tasks to increase efficiency where feasible.
Step 7: Operational Framework Implementation
With the groundwork in place, finalize your GCC’s operating model:
- Develop and document standard operating procedures (SOPs).
- Set up governance structures and reporting lines.
- Implement communication protocols to bridge time zones.
- Monitor performance through strong measurement tools.
- Build business continuity and disaster recovery plans to safeguard operations.
By following this structured approach, you’ll be well-positioned to launch a top-tier, scalable and resilient global capability center in the Philippines.
Conquer Every Challenge with Confidence in Your Philippine GCC Expansion
Expanding your GCC in the Philippines brings remarkable advantages, but navigating the complexities requires strategic foresight. Here’s how you can confidently address some of the most common challenges:
Cultural Integration
Bridging cultural differences is key to building trust and synergy between teams. Provide structured cultural training for both your Philippine staff and global counterparts to foster mutual respect and understanding. Additionally, regular opportunities for cross-cultural collaboration can strengthen relationships and promote a unified organizational culture.
Time Zone Coordination
Managing operations across time zones requires careful planning. Start by establishing clear communication protocols and, where applicable, implement follow-the-sun workflows to maintain seamless handoffs. Furthermore, flexible work arrangements can also support real-time collaboration and ensure your team members stay aligned despite geographic distance.
Data Security and Compliance
Protecting sensitive data and staying compliant with international standards is critical when operating offshore. Invest in strong cybersecurity systems and implement comprehensive governance frameworks tailored to local and global regulations. Additionally, the Philippines’ strengthened data privacy laws further enhance its credibility as a secure and reliable destination for offshore operations.
Talent Retention
Hiring the right people is just the beginning, keeping them engaged is what drives long-term success. Offer structured career growth opportunities, competitive compensation, and a positive work environment that reflects local values. In addition, recognition programs tailored to cultural nuances can deepen employee loyalty and reduce turnover.
Infrastructure and Technology Readiness
Operational success depends heavily on reliable infrastructure and technology. Evaluate the availability of stable internet connectivity, consistent power supply, and access to modern office facilities in your target location. Collaborating with an established EOR can also streamline operations by offering compliant employment solutions, which accelerates your GCC’s launch from day one.
Key Practices for Global Capability Centers in the Philippines
Launching a GCC in the Philippines presents exciting opportunities, requiring a deliberate approach and consistent alignment with broader business goals. Below are key practices that can further help drive success:
1. Start with a Clear Vision and Strategy
Success begins with clarity. Define the purpose of your GCC, the value it brings to your global operations, and how its objectives align with your company’s overall mission. A well-structured strategy not only sets direction but also ensures that resources, processes, and people are focused on measurable outcomes.
2. Foster Strong Relationships
Equally important is building meaningful relationships between headquarters and your GCC team. Establish trust and encourage open communication, which leads to smoother collaboration. Coupled with regular engagement, both virtual and in-person, this helps create a sense of shared ownership and accountability.
3. Enable Effective Knowledge Transfer
To empower your GCC, you’ll need to create systems that facilitate the seamless exchange of knowledge. Structured onboarding, transparent documentation, mentorship programs, and collaborative platforms can help ensure that expertise is consistently shared across teams and time zones.
4. Leverage the Right Technology
Technology is a vital enabler of efficiency and coordination. Adopt digital tools that support remote collaboration, workflow automation, and performance tracking. When implemented thoughtfully, these tools can also speed up decision-making, and support your teams stay aligned.
5. Track Progress and Adapt
Lastly, make performance monitoring a continuous practice. Define key metrics that reflect both operational and strategic success, and use data to identify opportunities for refinement. A GCC that evolves with business needs is empowered to improve and will remain a valuable, future-ready asset.
Your GCC Journey Starts Here in the Philippines
Building a global capability center in the Philippines is more than a cost-saving move; it’s a strategic investment in long-term performance. With a talent pool known for its professionalism, adaptability, and English proficiency, along with a business climate that supports foreign investment and innovation, the country offers an ideal foundation for global operations. The guide from this blog walks you through every stage of the setup process, from choosing the right location and navigating local regulations to assembling a high-performing team. It can ultimately help your business establish a GCC that drives growth and global competitiveness.
Related post: GCC vs BPO: Why Building a Global Capability Center in the Philippines Offers More Value
Frequently Asked Questions (FAQs)
Q1: What is a global capability center and how does it differ from traditional outsourcing?
A global capability center is an offshore entity that functions as an extension of the parent organization, unlike traditional outsourcing where processes are handed off to a third-party provider. GCCs provide greater control over operations, processes, and intellectual property while still leveraging offshore advantages like cost savings and talent access.
Q2: How long does it typically take to set up a global capability center in the Philippines?
Setting up a global capability center in the Philippines usually takes several months, from initial planning to operational launch. The timeline can vary depending on factors such as the complexity of operations, regulatory approvals, facility readiness, and recruitment requirements. Adopting a phased implementation approach can help expedite the initial deployment while allowing for gradual scaling over time.
Q3: What are the typical cost savings when establishing a GCC in the Philippines?
Companies typically achieve considerable cost savings when establishing a GCC global capability center in the Philippines compared to comparable operations in Western countries. These savings come from lower labor costs, reduced real estate expenses, and various government incentives. The exact savings also depend on the functions being performed, scale of operations, and location within the country.
Q4: How many global capability centers are there in the Philippines?
The Philippines is home to a significant number of GCCs, making it one of the world’s top destinations for shared services and outsourcing operations. These centers are run by multinational companies across industries such as technology, finance, healthcare, and professional services. The country’s highly skilled workforce and competitive costs have made it a prime location for GCCs, contributing significantly to both local and global economies.
Q5: What does a global capability center do?
A GCC acts as an offshore extension of a company’s operations, handling key business functions like IT support, finance and accounting, human resources, customer service, and data analytics. By leveraging local expertise, GCCs help multinational companies streamline operations, drive innovation, and scale effectively while minimizing costs and maintaining high service standards.
Your growth journey begins with a solid foundation. With One CoreDev IT®, we support businesses in establishing Global Capability Centers in the Philippines, connecting them with top-tier Filipino professionals and providing efficient, cost-saving solutions. Let’s build something remarkable together, reach out to us today!
