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Starting A Business In Bhutan

Bhutan, a small, landlocked country nestled between India and China, has gained global recognition for its distinctive development philosophy called Gross National Happiness (GNH). Since transitioning to a democratic constitutional monarchy in 2008, Bhutan has pursued a development strategy deeply rooted in the principles of GNH. The country’s challenging terrain, steep mountains, and deep valleys have resulted in scattered population settlement patterns. 

However, Bhutan has effectively utilized its abundant water resources to harness renewable energy sources, mainly through hydropower development, which has spurred economic growth and facilitated widespread access to affordable electricity. The revenue from selling surplus hydropower to India and promoting tourism has empowered Bhutan to invest significantly in human capital development, leading to improved service delivery, education, and health outcomes. 

While the country offers potential business opportunities, setting up a company in Bhutan can take time and effort. New companies must carefully consider factors such as legal compliance, market research, and competition. 

This blog will provide valuable insights into setting up a company in Bhutan, including the challenges and opportunities that may arise. Whether you are an experienced entrepreneur or a novice looking to start a business in Bhutan, our blog can serve as a valuable resource to help you navigate the unique business landscape of Bhutan.

Business Opportunities in Bhutan

Bhutan, often called the “Land of Happiness,” presents many business opportunities for entrepreneurs and investors. The country’s booming tourism industry, focusing on high-value, low-impact tourism, offers opportunities in tour operations, hospitality, travel agencies, adventure tourism, eco-tourism, cultural tourism, and specialized tours catering to niche markets. 

The country’s commitment to renewable energy and hydropower presents various opportunities in related sectors. Bhutan’s agricultural sector offers prospects in organic farming, food processing, agribusiness, and value-added products, tapping into the growing global demand for organic and sustainable agricultural products.

Bhutan’s rich cultural heritage in handicraft production, design, marketing, and export caters to domestic and international markets. Bhutan’s emphasis on education and skill development presents opportunities for vocational training, language training, e-learning, educational consulting, and curriculum development. 

The country’s growing urbanization and economic development offer opportunities for real estate, construction, architecture, urban planning, and information technology. The expanding financial sector, including banking, insurance, investment advisory, and fintech, also presents business prospects in Bhutan.

However, before starting a business in Bhutan, conducting thorough market research is crucial, as understanding local regulations and cultural nuances and seeking professional advice when considering starting a business in Bhutan. Building partnerships with local stakeholders and understanding Bhutanese values and customs can be essential for success in this vibrant and promising market.

Benefits of Starting a Business in Bhutan

There are several advantages to doing business in Bhutan. If you are moving towards setting up a company in Bhutan, here are some of the benefits on offer:

  • Economic Stability: Bhutan has a stable economy with steady economic growth. The country follows a “Gross National Happiness” philosophy, emphasizing sustainable and equitable economic development, social well-being, and environmental conservation. This provides a stable business environment with a focus on long-term sustainability.
  • Supportive Government Policies: Bhutan has a favorable business environment, with a government that actively promotes and supports entrepreneurship and foreign investment. The Bhutanese government has implemented policies to attract foreign investment, such as offering tax incentives, streamlined business registration processes, and simplified regulations.
  • Strategic Location: Bhutan is located between two economic giants, India and China, making it a potentially advantageous location for businesses looking to tap into these large markets. Bhutan’s proximity to India provides access to a large consumer base, while its strategic location as a transit route between India and China can facilitate trade and commerce.
  • Unique Market Opportunities: Bhutan has a unique market with a growing middle class and increasing demand for goods and services. The Bhutanese economy is largely focused on hydropower, tourism, agriculture, and manufacturing sectors, which offer business opportunities in renewable energy, tourism services, agribusiness, and handicrafts.
  • Skilled and Educated Workforce: Bhutan has a well-educated workforce, with a high literacy rate and an increasing number of Bhutanese youth obtaining higher education. The country’s labor force is known for its strong work ethic, adaptability, and English language proficiency, which can be an advantage for businesses operating in Bhutan.
  • Sustainability and Conservation Focus: Bhutan is known for its commitment to environmental conservation and sustainability. This can appeal to businesses focusing on green initiatives, eco-friendly products, and sustainable practices, as Bhutan’s natural beauty and commitment to protecting the environment align with such values.
  • Unique Cultural Heritage: Bhutan has a rich cultural heritage and is known for its unique Bhutanese culture and traditions, which can offer business opportunities in areas such as cultural tourism, handicrafts, and local arts and crafts.

Requirements for Starting a Business in Bhutan

Companies must follow the correct procedures if they want to start a business in Bhutan. The Bhutan company incorporation requirements are as follows:

Name of the company

  • For Bhutan business incorporation, select a unique name for your company that is not already registered or reserved by another entity in Bhutan. The name should comply with the guidelines provided by the Registrar of Companies, such as avoiding offensive or misleading names.

Minimum members

  • The minimum number of individuals required for Private Companies is two; for Public Companies, it is three (excluding government-owned public companies). There is no real maximum limit on the number of individuals for Public Companies, while Private Companies are limited to a maximum of 50 individuals for Bhutan’s new company incorporation.

Tax registration

  • Tax registration is a crucial step when registering a new company in Bhutan. The new company must obtain a Tax Identification Number (TIN) from the Department of Revenue and Customs (DRC) under the Ministry of Finance. This TIN is used for various tax-related purposes, including filing tax returns, paying taxes, and compliance with Bhutan’s tax laws and regulations. The company must provide relevant information and complete the necessary forms required by the DRC to obtain the TIN. It is essential to comply with all tax registration requirements and fulfill ongoing tax obligations to ensure smooth and legal operations of the new company in Bhutan.

Types of Business Structures in Bhutan

In Bhutan, several business structures are available for entrepreneurs planning to start a business in Bhutan, each with its benefits and requirements. Here are the options for business to do in Bhutan:

Sole proprietorship

  • This is a simple form of business where a single individual owns and operates the business. 
  • The owner is personally responsible for all aspects of the business, including its debts and liabilities. 
  • A sole proprietorship is relatively easy and cost-effective, but the owner has unlimited liability.


  • A partnership is basically a business structure where two or more individuals or entities join to run a business. 
  • Partners share the business’s profits, losses, and responsibilities according to the partnership agreement. 
  • Partnerships can be general or limited, with different levels of liability for each partner.

Private limited company

  • Private companies cannot offer shares to the public.
  • A minimum of two directors is mandated for a private company.
  • To convert a private company into a public company, the following steps must be taken:
    1. All requirements should be met.
    2. Articles of Incorporation should be amended as required
    3. A special resolution must be passed
    4. Complying with applicable additional requirements
    5. Companies should then apply for re-registration.
  • The term ‘Private Limited’ has to be added to the end of a company name.

Public limited company

  • In accordance with the restrictions set by the Regulatory Authorities and Stock Exchange, public firms are permitted to offer shares to the general public.
  • A minimum prescribed allotted share capital is required for a public company.
  • A public company must have at least three directors.
  • A company secretary is mandatory for a public company.
  • Public companies are required to add the word ‘Limited’ at the end of their company name.
  • Suppose a public company wishes to be re-registered as a private company. In that case, it must pass a special resolution, change its Articles of Incorporation, and comply with any additional requirements before applying for re-registration.

Branch office of foreign companies

  • A foreign company in Bhutan is one that has been incorporated outside the country. 
  • The beneficial owner registers the transfer and ownership of shares of a foreign company in their own name.
  • The Registrar of Companies reviews and registers such ownerships and transfers.
  • Foreign companies have the option to conduct business in Bhutan through a Permanent Establishment (PE), or they may engage in partnership with local entities in Bhutan.

Company Registration Process

For company registration in Bhutan, businesses must complete some steps. Here are the steps to incorporate a company in Bhutan:

  • Business Name Reservation: The first step of the company registration process in Bhutan is to choose a unique name for your company and reserve it with the Companies Registry Office. This can be done online or through a physical application.
  • Preparation of Incorporation Documents: Once the business name is reserved, you must prepare the necessary incorporation documents. These documents include the Memorandum of Association (MOA) and Articles of Association (AOA), which outline the company’s objectives, share structure, and rules of operation..
  • Notarization and Legalization of Documents: The MOA and AOA documents must be notarized and legalized by the Ministry of Foreign Affairs in Bhutan or the Bhutanese Embassy/Consulate in the company’s country of origin.
  • Submission of Documents: The notarized and legalized MOA and AOA, along with other required documents such as the application form, identification proof of directors/shareholders, and address proof, need to be submitted to the Companies Registry Office.
  • Review and Approval: The Companies Registry Office reviews the submitted documents for compliance with the Companies Act and other relevant laws. If the documents are in order, the Registrar of Companies issues a Certificate of Incorporation.
  • Payment of Registration Fees: Upon approval, you must pay the required registration fees to the Companies Registry Office.
  • Business License and Tax Registration: After obtaining the Certificate of Incorporation to start a business in Bhutan finally, you need to obtain a business license from the local government authorities and register for taxes, including Value Added Tax (VAT), Corporate Income Tax (CIT), and other applicable taxes.

How Much Does it Cost to Incorporate a Company in Bhutan?

The cost of incorporating a business in Bhutan includes a legal stamp fee of BTN 60 for every BTN 10 of capital invested. There is a name reservation fee of BTN 2,000 for registering the business’s name. For public companies, there is a fee of BTN 7,000. 

There is a registration fee of BTN 8,000 for large-scale industries that start a business in Bhutan. Moreover, large-scale industries with authorized share capital above BTN 100 million must also pay a business license fee of BTN 4,000. These fees are part of the overall cost of setting up a company in Bhutan and should be considered by aspiring entrepreneurs and investors.

Are Foreigners in Bhutan on Certain Passes Allowed to Start a Business in Bhutan?

Here are the requirements for doing  business in Bhutan for foreigners:

  1. Business Visa: Foreign investors who wish to start a business in Bhutan may need to obtain a Business Visa. This type of visa allows foreign nationals to enter Bhutan for business purposes, including setting up and running a business. The Business Visa is usually issued for a specific period of time and may require renewal.
  2. Work Permit: Foreign investors who plan to work and manage their business in Bhutan actively may need to obtain a Work Permit. This permit is typically required for foreign nationals who the companies will employ in Bhutan and engage in business activities. Work Permits are actually issued by the Ministry of Labor and Human Resources in Bhutan and have specific requirements, including evidence of relevant skills, qualifications, and experience.
  3. Other permits: To start a business in Bhutan, you typically need to obtain an economic development permit from the government, allowing you to operate your business legally without risk being raided or arrested. Once you have the permit, you are also required to file a business plan with the government.

There are several types of permits available for different types of businesses in Bhutan. Obtain these permits to avoid difficulties in Bhutan business incorporation.

The first type is an agricultural permit, which allows you to grow crops and sell them directly to the public. The second type is an industrial/manufacturing permit, which permits you to operate a manufacturing plant or workshop in your designated business district. The third type is trade-processing permits, available only to companies involved in trade-related activities such as manufacturing, trading, or service operations.

Government Assistance for Foreign-owned Businesses

Foreign investors who plan to start a business in Bhutan are provided with a host of incentives:

  • Five to ten years of tax exemptions based on the economic sector
  • Customs duty and sales tax exemptions on raw materials, primary packaging materials, and importing of machinery.
  • Companies engaged in manufacturing and IT/ITES services can enjoy a tax exemption on convertible currency earnings for a period of ten years.
  • Businesses can benefit from tax rebates of 15% on the upgradation of environmental sustainability, reinvestment allowances, and business predictability, maximizing the value of their investments.

How Can Multiplier Help?

When starting a business overseas, thorough planning, research, and financial considerations are essential. However, partnering with a reputable Professional Employer Organization (PEO) and Employer of Record (EOR) company like Multiplier can simplify the process. Multiplier offers various HR, payroll, and compliance solutions to businesses across various industries and locations.

Businesses can confidently entrust their HR responsibilities to our team of experts by choosing Multiplier. We manage global employee teams, streamline onboarding processes for new hires, and handle payroll, eliminating the need to establish a subsidiary. Our qualified professionals can assist in recruiting workers from around the world and facilitate international business expansion. With Multiplier’s day-to-day HR support, businesses can focus on growing their company while we take care of the administrative aspects.

Frequently Asked Questions

The time required to register a business in Bhutan may vary depending on various factors, including the type of business entity, the completeness of the required documents, and the efficiency of the registration process.

Yes, there are restrictions on importing and exporting goods for setting up a company in Bhutan. Bhutan follows a unique approach to trade and has specific regulations, including import and export restrictions and duty and taxation in place to protect its environment, culture, and traditions.

According to the Foreign Direct Investment (FDI) policy, foreign investors must have a local Bhutanese partner to start a business in Bhutan.

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