How to register a company in Bhutan: A guide for employers

Grow in Bhutan, where happiness and business progress go hand in hand.

Bhutan, known for its breathtaking landscapes and unique development philosophy of Gross National Happiness (GNH), is an emerging destination for businesses expanding in South Asia. With investor-friendly policies, a stable economic environment, and growing tourism, hydropower, and agriculture sectors, Bhutan offers excellent opportunities for entrepreneurs and foreign investors.

Setting up a business in Bhutan has several benefits, including low corporate tax rates for specific industries, full foreign ownership in many sectors, and a streamlined company registration process. However, navigating Bhutan’s labor laws, tax regulations, and administrative procedures requires careful planning and compliance.

In this guide, you’ll discover the process, costs, and advantages of setting up a business in Bhutan. We’ll also explore alternative options, such as working with an Employer of Record (EOR) for a faster, hassle-free market entry.

The business benefits of registering your company in Bhutan

Bhutan’s growing economy and pro-business policies make it an attractive business destination. From tax incentives to simplified regulations, here’s why you should consider setting up in Bhutan:

• Bhutan has favorable tax policies and incentives for foreign businesses, particularly in renewable energy, tourism, and technology.
• Companies in priority industries (technology, agriculture, and sustainable tourism) qualify for further tax breaks and financial support from the Bhutanese government.
• Bhutan allows full foreign ownership in several industries, including technology and IT services, sustainable tourism, renewable energy and hydropower, agro-processing, and education and training services.
• Bhutan has a young, educated workforce with growing IT, finance, and renewable energy expertise.
• Bhutan ranks high in business transparency and regulatory efficiency.

When expanding into Bhutan, businesses have two primary pathways to establish their presence: direct company registration and expanding through an Employer of Record (EOR). In the next section, we explore the difference.

What is the difference between standard company registration and Employer of Record (EOR) in Bhutan?

An EOR can simplify and accelerate your market entry into Bhutan by eliminating the need to register a company here. Before you decide on the best path for your Bhutanese expansion, here is a comparison chart:

Aspect	Standard company registration	Employer of Record (EOR)
Purpose	Establish a legal business entity in Bhutan for long-term operations.	Hire employees and operate in Bhutan without forming a legal entity.
Control	Full control over business operations, hiring, and decision-making.	Limited control—EOR handles legal employment, payroll, and compliance responsibilities.
Cost	Higher upfront costs (registration, legal setup, payroll, and taxes).	Lower costs—fixed monthly fee per employee covers payroll, taxes, and compliance.
Compliance	Must comply with Bhutanese tax laws and labor regulations.	EOR ensures legal and tax compliance and reduces administrative risks.
Setup time	2–3 weeks or more, depending on paperwork and approvals.	A few days—an EOR enables immediate market entry.
Scalability	Requires entity registration for each location; exiting the market can be complex.	Highly flexible—easily hire, expand, or exit without legal complications.

Which strategy is right for your business?

• Choose standard company registration if you want full operational control and a long-term presence in Bhutan.
• Opt for an EOR if you need fast, risk-free market entry, want to hire employees quickly, and prefer to avoid legal and administrative complexities.

How an EOR simplifies Bhutan company registration

Setting up a local entity in Bhutan means navigating local tax regulations, labor laws, payroll processing, and compliance—all of which can delay market entry and increase operational overheads.

An Employer of Record (EOR) legally hires employees for you in Bhutan and is responsible for payroll, compliance, and tax withholdings.

Here’s how an EOR makes it easier to expand into Bhutan:

• Fast and hassle-free market entry: Expand into Bhutan without entity registration and start operations within days instead of weeks or months.
• Effortless payroll and tax management: Ensure accurate salary processing, tax deductions, and social security contributions in compliance with Bhutanese regulations.
• Lower risk and legal exposure: Avoid legal pitfalls by adhering to Bhutan’s employment laws, tax codes, and labor protections without internal HR complexities.
• Significant cost savings: Eliminate the high upfront costs of company registration, legal fees, payroll administration, and ongoing compliance.
• Workforce scalability and flexibility: Easily hire, expand, or downsize without the commitment and liabilities of a full legal entity.
• Seamless talent acquisition: Retain talent with locally compliant and competitive benefits tailor-made for your Bhutanese workforce.
• Risk mitigation and legal protection: Reduce compliance risks, employee disputes, and penalties with proper employment classification and tax filings.

An EOR is an excellent option for businesses that want to swiftly hire in Bhutan while avoiding risks and complexity. However, if your company must sell directly in Bhutan, hold business licenses, or receive FDI incentives, then registering your company is essential. Let’s explore how you can do this.

A step-by-step guide to registering a company in Bhutan

Expanding your business to Bhutan offers access to a stable economy, a growing skilled workforce, and government incentives for tourism, renewable energy, and technology. While the company registration process is relatively straightforward, businesses must carefully navigate the legal requirements, tax obligations, and compliance standards.

Here’s a step-by-step guide to setting up a company in Bhutan:

Step 1: Choose your business structure

Before registering, you need to select the legal entity structure that would suit your business goals and comply with Bhutan’s regulatory requirements:

• Private Limited Company (Pvt. Ltd.): Most common structure; requires at least one director and shareholder.
• Public Limited Company: Suitable for large businesses seeking public investment.
• Sole proprietorship: Best for individual entrepreneurs.
• Foreign branch office: Extension of a foreign company operating in Bhutan.

Step 2: Reserve a business name

• Check availability through the Registrar of Companies (ROC).
• Ensure the name is unique and compliant with Bhutanese regulations.

Step 3: Prepare and submit required documents

To register your company, you’ll need:

• Articles of Incorporation and Memorandum of Association
• Identification documents for shareholders and directors
• Business address proof
• Initial capital investment details (if applicable)

You will need to notarize and legalize all documents by the Ministry of Foreign Affairs in Bhutan or the Bhutanese Embassy/Consulate in the company’s country of origin.

Step 4: Obtain a company registration certificate

• Issued by the Ministry of Economic Affairs (MoEA) upon approval.

Step 5: Register for taxes and compliance

• Obtain a Taxpayer Identification Number (TIN).
• Register for Corporate Income Tax and VAT (if applicable).
• Ensure compliance with labor laws and employee social security contributions.

Step 6: Open a corporate bank account

• Required for managing business finances.
• Some recommended banks include Bhutan National Bank, Bank of Bhutan, and Druk PNB.

Step 7: Obtain necessary business licenses and permits

• Certain industries, such as tourism and manufacturing, may require additional approvals.

Step 8: Set up payroll and HR compliance

• Ensure employees are legally contracted with appropriate benefits and salaries.
• Minimum wage compliance and employee rights must be adhered to.

The next crucial step is to evaluate the costs involved. Let’s break down the expenses associated with company registration.

How much does it cost to register a company in Bhutan?

Understanding the true cost of registering a business in Bhutan is crucial for proper financial planning. Below are the key expenses involved in setting up and maintaining a company in Bhutan.

• Registration and initial setup costs

• Company registration fee: $100–$500 (varies by business type and industry)
• Notary and legal fees: $500–$2,000 (for document verification, translations, and legal consultation.
• Business name reservation: $50–$150
• Company seal and documentation: $50–$200

• Minimum share capital requirements

Most companies in Bhutan have no fixed minimum share capital requirement (except finance, telecom, and insurance). Consult the Company Registry Office for precise information.

• Annual maintenance and compliance costs

Once registered, businesses must comply with Bhutanese regulations, which come with recurring costs.

• Business address and office rental: $1,000–$5,000 per year (varies based on location and type)
• Annual business license renewal: $200–$1,000 (varies by industry)
• Accounting and bookkeeping services: $100–$500 per month
• Corporate tax compliance and filing: $500–$2,000 per year
• VAT registration and compliance: $200–$1,000 per year (if applicable)

• Payroll, taxes, and social contributions

If you hire employees in Bhutan, you must comply with payroll laws, tax regulations, and social security contributions.

• Corporate tax: 30% (lower for SMEs and tax-exempt sectors)
• Value-Added Tax (VAT): 10% (applies to most goods and services)
• Employee social contributions: Employers must contribute to pension, insurance, and welfare funds (varies based on salary structure)
• Payroll processing fees: $50–$200 per employee per month (if outsourced)

While setting up a business in Bhutan is cost-effective compared to many countries, the hidden costs of compliance, payroll, and legal fees can add up. Companies looking for a low-risk, cost-efficient expansion strategy can benefit from an EOR, which provides a streamlined solution—allowing businesses to operate in Bhutan without the financial and administrative burden of entity registration.

Comparing costs: Legal entity registration vs. Employer of Record (EOR)

Below is a side-by-side cost comparison to help you determine the most suitable expansion strategy for your business in Bhutan.

Cost category	Standard company registration	Employer of Record (EOR)
Setup and registration fees	$1,000–$5,000 (includes legal, notary, and registration fees)	$0 (No registration needed)
Share capital requirement	Varies by industry; most sectors have no fixed requirement	$0 (No capital required)
Business address and office	$1,000–$5,000 per year	Included in EOR service
Legal and compliance costs	$500–$2,000 per year	Included in EOR service
Payroll and HR administration	$50–$200 per employee per month	Included in EOR service
Corporate tax (30%)	Must file and pay	Handled by EOR provider
Accounting and bookkeeping	$100–$500 per month	Included in EOR service
VAT and tax filing	$200–$1,000 annually	Included in EOR service
Employee benefits and social security contributions	Paid and managed by the employer	Handled by EOR provider
Scalability and market exit	High costs & legal complexity	Easy entry and exit without liabilities

Note: The costs above are indicative and may vary based on your business needs. To get a clearer estimate tailored to your expansion plans, talk to our experts.

Choose Multiplier for your Bhutan expansion

Expanding your business into Bhutan can mean exciting opportunities, but complex legal, tax, and compliance challenges. With Multiplier’s Employer of Record (EOR) solution, you can hire top talent, manage payroll, and stay compliant—without the hassle of setting up a legal entity. Our platform makes global expansion efficient and effortless for companies of every size.

Why choose Multiplier as your EOR partner for Bhutan?

• Local hiring expertise: Easily hire top talent in Bhutan with fully compliant employment contracts, local tax filings, and smooth onboarding processes.
• Effortless payroll management: Ensure accurate, on-time salary payments, automated tax deductions, and social security contributions while staying 100% compliant with Bhutanese payroll laws.
• Comprehensive HR solutions: Manage onboarding, expense tracking, time-off requests, and employee benefits—all in one user-friendly platform.
• Compliance assurance: Navigate Bhutan’s labor laws, tax codes, and social security regulations with ease, avoiding penalties and administrative burdens.
• Attractive benefits packages: Offer locally tailored healthcare, pension plans, and perks to attract and retain top talent in Bhutan.
• Reliable support: Get 24/7 expert customer support and enjoy the security of ISO-certified compliance and enterprise-grade data protection.

Let Multiplier handle the complexities of your Bhutan expansion, and you focus on what matters—scaling your business successfully.

Take the first step toward EOR-supported expansion—book a demo.