Mexico and Colombia as strategic destinations.

BY LARRY PASCAL AND
SERGIO GUERRERO

Global Capability Centers (GCCs) have emerged as an important model for multinational enterprises seeking to establish operations that perform strategic, core business functions, such as software engineering, data analytics, artificial intelligence, and advanced R&D, rather than traditional outsourcing services. With an estimated GCC global market size in 2026 of $650 billion, it is clear that multinational companies now consider GCCs as part of their strategic innovation growth with a broad access to specialized talent pools all over the world.

In response, Latin America, and in particular Mexico and Colombia, has positioned itself as an increasingly compelling region for GCC development, driven by geographic proximity to the United States, competitive talent pools, favorable regulatory incentives, and a maturing business environment.

Mexico: A Consolidated GCC Hub

Mexico has firmly established itself as the leading GCC destination in Latin America. According to Mordor Intelligence Research and Advisory report on Mexico GCC market, the Mexican market size is estimated at approximately $5.9 billion in 2026. As of 2024, over 150 multinational corporations are operating GCCs in Mexico, employing more than 180,000 people, with projections estimating the Mexican GCC workforce could exceed 250,000 by 2030. GCC expansion in Mexico is mostly focused on technology, financial services, and manufacturing. Key cities such as Guadalajara, Monterrey, Mexico City, and Querétaro each offer distinct specializations, from semiconductors and IT to automotive engineering and shared services.

Mexico’s strategic advantages include time-zone alignment with the United States, integration into the USMCA trade framework, expanding bilingual STEM talent, and real-time operational synergy with U.S. markets. From an investment standpoint, Mexico’s “Plan México” nearshoring decree, effective January 2025, offers accelerated depreciation rates of up to 89% on new fixed assets, along with additional deductions for training and innovation expenses, available to both domestic and foreign companies across all sectors. 

Colombia: An Emerging GCC Destination

Colombia has recently gained relevance as a complementary GCC destination in Latin America. The country offers a strategic geographic position with time-zone overlap with the U.S. East Coast, a young and growing workforce with strong English-language adoption in key urban centers such as Bogotá and Medellín, and increasingly competitive labor costs. Colombia’s technology sector has recently seen significant growth, with the IT services market expanding steadily as global companies establish shared services and technology operations in the country.

From a foreign investment perspective, Colombia provides a stable legal framework for foreign direct investment, including national treatment protections and free repatriation of capital and profits. The country offers targeted tax incentives in free trade zones (Zonas Francas), where qualifying companies may benefit from a reduced corporate income tax rate of 20% (compared to the general rate of 35%), as well as exemptions from customs duties and VAT on imports of equipment and raw materials. Additional incentives are available for investments in technology, innovation, and the creative industries. Colombia has also strengthened its intellectual property protections and data privacy regime so as to align them more  with international standards, making it an increasingly viable option for operations handling sensitive data and proprietary technology.

The Build-Operate-Transfer (BOT) Model

A common and increasingly popular entry strategy for GCC development across Latin America is the Build-Operate-Transfer (BOT) model. The BOT model serves as a structured risk-mitigation vehicle, where a specialized local provider (a) builds the infrastructure, forms the legal entity that will own the assets and render the services, and hires the local workforce, (b) operates the GCC until internal processes and teams have been well developed (typically 3-5 years), and then (c) transfers full ownership to the client through a pre-agreed asset or share purchase structure. This approach is particularly valuable in jurisdictions like Mexico and Colombia, where employment law and regulatory compliance requirements may increase early-stage risk for first-time multinational companies considering entering such markets.

Moreover, market practice shows that clients are increasingly pushing for shorter operation phases and quicker transfer of GCC ownership to them, reflecting the model’s evolution from a longer-term outsourcing solution into a controlled, shorter-term  market entry mechanism. A well-structured BOT agreement should address, among others, clear phase milestones and completion criteria, governance and decision-making protocols, talent and employment transition mechanics, IP ownership, and clear exit and transfer readiness benchmarks.

Key Challenges in Developing a GCC in Latin America

While Mexico and Colombia offer their respective advantages, companies must navigate several challenges common to the region. Employment law complexity remains a primary concern. Both Mexico and Colombia maintain employee protective labor frameworks with mandatory benefits, strict severance requirements, and restrictions on subcontracting and outsourcing models, requiring careful structuring from the outset. Excessive client control over hiring or operations during the BOT phase may result in joint-employer liability in either jurisdiction. Data protection compliance is another critical area, as both countries have enacted comprehensive privacy regimes that impose local accountability on data controllers regardless of governing law. Intellectual property protection in civil-law systems requires IP assignment provisions specifically tailored to local legal requirements. Additionally, rising labor costs and increasing competition for skilled talent in areas such as AI, cybersecurity, and data science are reshaping the labor costs across both markets. Finally, political and trade dynamics, including potential shifts in U.S. trade policy and ongoing treaty renegotiations, introduce elements of uncertainty that companies should consider into long term investment planning.

Conclusion

Finally, engaging experienced international counsel from the earliest stages of a project, particularly on labor structuring, tax planning, and IP protection, and using a “best practices” and not merely “mere legal requirements” approach are important considerations for a successful project development and GCC rollout and implementation.

Larry Pascal and Sergio Guerrero are attorneys at Haynes Boone, an international law firm with 20 offices worldwide including the US, the UK, Mexico, and the People’s Republic of China.

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