If your business would be new to the Gelephu Mindfulness City, the Income Tax Act 2025 offers a full tax exemption: the designated officer of the Gelephu Mindfulness City Special Administrative Region (GMC) can exempt the income of an approved founders company from a qualifying business for up to 15 years. The window is fixed, because no company can be approved after 31 December 2030, and the exemption only ever covers the business named in the letter of approval. Basnet Law prepares founders company applications and negotiates the terms of the letter of approval. This page explains how the exemption works and how we take an application through it.
How we help
- Assess whether your industry can be approved as a founders industry: one "not being carried on in GMC on a scale adequate to the economic needs of GMC" with favourable development prospects.
- Define the qualifying business precisely, because the exemption attaches to that business alone.
- Prepare the written application in the prescribed form and particulars, with the economic case the designated officer needs in order to find approval "expedient in the public interest".
- Negotiate the commencement date and period of exemption in the letter of approval, and later amendments or extensions.
- Set up separate accounts for any non-qualifying trade and manage the deemed capital allowance rule.
- Advise on the interaction with strategic and development company status, and on compliance to avoid revocation and additional assessments.
How the founders company exemption works, in plain terms
The Act exempts from tax "the income of an approved founders company derived from the trade or business carried on by that company in a founders industry", subject to prescribed conditions and the 15-year cap. The mechanism has two approvals. First, the designated officer may approve an industry as a founders industry where it is not carried on in GMC at an adequate scale and has favourable prospects. Second, any company carrying on a qualifying business in that industry may apply in writing to be approved as a founders company for that business; the approval is discretionary, may carry conditions, and is evidenced by a letter of approval.
The letter must specify the qualifying business, the date the exemption starts and the period of exemption. The designated officer may later amend the qualifying business, move the start date earlier or later, or extend the period, but the total exemption including extensions "must not in total exceed 15 years". The deadline is fixed: "No company may be approved as a founders company after 31 December 2030".
Exempt income is computed after taking into account the capital allowances the Act provides, whether or not they are claimed. Any separate trade must be accounted for separately for the same accounting period and is taxed normally. Approval may be revoked for a breach of the Act or of an approval condition, and the Comptroller may assess income that ought not to have been exempted. Outside the qualifying business, the company pays the standard 15% rate. The application form, particulars and any prescribed conditions are set by regulations, and we confirm the current requirements at engagement.
Who this is for
- Founders bringing a business line new to GMC in one of its priority industries, from green energy and agri-tech to digital assets, health and education.
- Groups establishing a first-of-kind operation in GMC before the 2030 cut-off.
- Investors comparing a full founders company exemption with the concessionary rate for a strategic and development company.
- Companies already operating in GMC in an industry that may qualify.
How an engagement runs
- Eligibility review: does the industry meet the founders industry test, and is the business separable enough to be a qualifying business? You get a written view before any cost is committed.
- Evidence pack: market data on scale in GMC, development prospects, investment and employment plan.
- Application drafting and submission to the designated officer, with responses to queries until a decision issues.
- Negotiation of the letter of approval terms and conditions.
- Post-approval compliance: separate accounts, condition monitoring, and extension applications where warranted.
Frequently asked questions
What is a founders industry?
An industry the designated officer approves because it is not carried on in GMC on a scale adequate to GMC's economic needs and has favourable prospects for development. The approval must be in the public interest and is at the designated officer's discretion, which is why the economic case we prepare matters.
How long can the exemption last?
The letter of approval sets the period. Including all extensions, it cannot exceed 15 years in total. We negotiate the period and the start date together.
Is there a deadline?
Yes. No company may be approved after 31 December 2030. The exemption period itself can run beyond that date, so a company approved in time can still be given the full 15 years.
Does the exemption cover all the company's income?
No. It covers income from the qualifying business specified in the letter of approval. Other trades are accounted for separately and taxed under the Act, and we set up that separation from the start.
Can we hold both the founders company (13Y) and strategic and development company (43D) approvals?
The Act does not prohibit holding a founders company approval and a strategic and development company approval at the same time, but each attaches to a specified business. We structure the applications so the two businesses are distinct.
Talk to GMC counsel on the ground
Basnet Law Pte. Ltd. is the first law firm incorporated in the Gelephu Mindfulness City. A short conversation early in a matter usually saves time and cost later. Write to basnet@basnetgmc.com or office@basnetgmc.com with a few lines about your plans, and we will tell you plainly what is needed, how long it takes, and whether we are the right fit.
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
