These are the questions international founders, investors, counsel and HR leaders put to us most often about the law of the Gelephu Mindfulness City Special Administrative Region (GMC). Each answer is short and anchored to a section of a GMC Act or GFSO rulebook. "$" in GMC law means United States dollars (Companies Act 2025, s. 4A; Income Tax Act 2025, s. 2AA).

What this guide covers

Thirty-three questions across seven clusters, followed by the series articles that go deeper on each.

The jurisdiction

1. Is GMC a separate legal jurisdiction?

Yes, within Bhutan. Royal Charter No. 1 of 2024 makes GMC "a fully independent and autonomous region in the Kingdom of Bhutan" with executive, legislative and judicial authority, including final adjudication (Art. 1).

2. What law applies to a contract or dispute in GMC?

GMC Acts first; then the received common law and equity so far as suited to GMC (Application of Laws Act 2024, s. 3); then the applied statutes in Schedule A and the applied financial services rules in Schedule B as modified (ss. 4, 5). For gaps, the applied general law is presumptive in civil and commercial matters (s. 7).

3. Is the currency US dollars?

Every "$" in the Acts is read as United States dollars (Companies Act 2025, s. 4A; Income Tax Act 2025, s. 2AA; Employment Act 2025, s. 2AA), and tax computations must be denominated in USD (Income Tax Act, s. 62A).

4. Who makes GMC laws?

The GMC Authority, under Article 4(2) of the Charter and with the assent of the Druk Gyalpo. Every Act recites this on its face.

Companies and entities

5. How many shareholders and directors does a GMC company need?

One member (Companies Act 2025, s. 20A) and one director ordinarily resident in GMC; the sole director may be the sole member (s. 145(1)).

6. Who counts as an "ordinarily resident" director?

A person resident in GMC or holding a valid work visa or work pass (s. 145(1A)).

7. Is there a minimum share capital?

The Companies Act 2025 does not state one, and shares have no par value (s. 62A). Regulated firms face capital set by GFSO under the prudential rulebooks.

8. Can we move our existing company into GMC?

Yes. A foreign corporate entity may apply for transfer of registration (s. 358), and registration "does not create a new legal entity" or affect its property, rights or obligations (s. 361(2)). Deregistration evidence from the old jurisdiction is due within 60 days (s. 359(6)).

9. What vehicles exist besides a company?

LLPs with separate legal personality (LLP Act 2026, s. 4), limited partnerships with general and limited partners (LP Act 2026, s. 3), general partnerships (Partnership Act 2026, s. 1) and registered business names (Business Names Registration Act 2026, s. 5).

10. Does a partnership or sole trader need a local person?

A business name needs an authorised representative ordinarily resident in GMC where the proprietors or partners live abroad (Business Names Registration Act 2026, s. 11); an LLP needs a resident manager (LLP Act 2026, s. 29); the Registrar may require a local manager for an LP whose general partners are all abroad (LP Act 2026, s. 28).

11. What does it cost and how long does it take to register a company through GCRO?

US$2,000 to register a private company limited by shares and US$2,000 annual renewal (guarantee company US$500/US$250; branch US$2,000/US$2,000; sole proprietorship US$250/US$125), about one week from complete documents.

12. Do we have to use a Corporate Service Provider?

Yes. Since 1 November 2025 a GMCA-empanelled CSP is mandatory for every new incorporation, except Bhutanese sole proprietorships.

13. Is the resident director requirement still waived?

No. GCRO's waiver ended on 30 April 2026. Any employee with a valid GMCA employment pass, or a Bhutanese citizen, qualifies; the Registrar may revoke registration where the requirement is unmet.

14. What is the minimum paid-up capital in practice?

US$1, deposited as soon as practicable after incorporation; higher where a regulated activity or tax incentive requires it. Branches need none.

15. Which entity types does GCRO actually register today?

Four: private company limited by shares, branch of a company, public company limited by guarantee and sole proprietorship. The LLP and LP Acts are enacted; confirm availability with GCRO.

Financial services and crypto

16. When do I need a GFSO licence?

When you carry on a Regulated Activity by way of business in GMC (Financial Services Act 2025, s. 16(1)). "By way of business" includes holding yourself out as willing to do so (Schedule 1, Part 1, para. 3).

17. Who can apply?

A body corporate or a partnership, not an individual (s. 27(1); GEN 5.2.2).

18. Which senior roles must be approved?

Senior Executive Officer, Compliance Officer and Money Laundering Reporting Officer at all times, plus a Finance Officer for banks and insurers (GEN 5.5.1(1)).

19. Must the firm be physically in GMC?

A GMC-incorporated Licensed Firm's head office and registered office must be in GMC (GEN 4.5.1(1)), judged by where directors, senior management and day-to-day control sit.

20. Are crypto activities regulated under the same Act?

Yes. Dealing (para. 4), custody (para. 43) and operating an MTF (para. 54) each expressly cover virtual assets, and issuing a fiat-referenced token is a named activity (para. 53B). GFSO has specific rule-making power under s. 5A.

21. Can we market to GMC from abroad without a licence?

The Financial Promotion Restriction in s. 18 applies to a communication from outside GMC if it is "capable of having an effect in GMC" (s. 18(3)), unless approved by a Licensed Firm or exempt under Schedule 2.

22. Can we sell a licensed firm?

Changes of control are governed by Part 10 of the Act (s. 105) and GEN 8.8; prior engagement with GFSO is required.

Tax

23. What is the corporate tax rate?

15% on every dollar of chargeable income of a company or body of persons (Income Tax Act 2025, s. 43(1)(a)).

24. What is the personal tax rate for foreigners?

0% for an individual who is not a citizen of Bhutan, resident in GMC or not, on chargeable income derived on or before 31 December 2030 (s. 43(1)(ba)).

25. What incentives exist for new businesses?

Approved founders companies may be exempt for up to 15 years in total (s. 13Y(8)); strategic and development companies may pay not less than 5% (s. 43D(1)). No approval under either after 31 December 2030 (ss. 13Y(5), 43D(4)).

26. Is there capital gains tax?

No separate capital gains tax. Gains on ordinary or preference shares held at 20% or more for at least 24 months are exempt (s. 13W(1A)).

27. Are advance rulings available?

Section 108 is enacted but commences on a date to be appointed by Gazette notification (s. 1(3)(y)).

28. Which fund and family office exemptions are live?

Sections 13O, 13OA, 13U and 13T are on the statute book but commence only on Gazette notification (s. 1(3)).

Immigration and employment

29. Can a foreigner work in GMC?

Yes, with a work pass. Employing a foreign employee without a valid pass is prohibited (Employment of Foreign Workforce Act 2025, s. 5(1)); self-employed foreigners need one too (s. 10(1)).

30. What must an employer keep?

A register of foreign employees, in the form the Controller determines, open to inspection (s. 8).

31. What is the minimum notice period?

From one day for under 26 weeks' service to four weeks for five years or more, unless the contract states a longer period, which must be equal for both parties (Employment Act 2025, s. 10(2)–(3)).

32. Can an employer deduct from salary?

Only as the Employment Act authorises (ss. 26–32), and never from a foreign employee's salary as consideration for employment (Foreign Workforce Act, s. 22A).

Contracts

33. Can we exclude liability in our standard terms?

Only if reasonable under the Unfair Contract Terms Act 2026 (ss. 3, 11), and never for death or personal injury from negligence (s. 2). The Act applies to contracts made on or after 15 June 2026 (s. 30). Implied terms as to title, description and quality come from the Sale of Goods Act 2026 (ss. 12–14).

Where to read more

• Is GMC a Separate Jurisdiction? and Which Law Applies in GMC? — questions 1 to 4.
• How to Incorporate a Company in GMC and Redomiciliation to GMC — questions 5 to 15.
• The Complete Guide to GFSO Licensing and The GMC Digital Asset Framework — questions 16 to 22.
• The GMC Tax Regime in Full and The Founders Company Exemption — questions 23 to 28.
• GMC Work Passes and Hiring in GMC — questions 29 to 32.
• Commercial Contracts in GMC — question 33.

Frequently asked questions about this page

Are these answers legal advice?

No. They are general information on GMC law as at the date of publication. Facts change the answer; contact us for advice on your position.

Why do some answers say "not yet commenced"?

Because the Income Tax Act 2025 lists in s. 1(3) provisions that operate only from a date appointed by Gazette notification. We say so rather than describe them as live.

Where are fees and timelines?

Not in the Acts. Fees, capital, pass categories and levy rates are set by regulations, the Registrar, the Controller and GFSO. Company registration fees, timing and capital are as published by GCRO and revised from time to time; other figures we confirm on request.

You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.

References

• Royal Charter No. 1 of 2024, Arts. 1, 4
• Application of Laws Act 2024, ss. 3, 4, 5, 7
• Companies Act 2025, ss. 4A, 20A, 62A, 145, 358, 359, 361
• LLP Act 2026, ss. 4, 29; LP Act 2026, ss. 3, 28; Partnership Act 2026, s. 1; Business Names Registration Act 2026, ss. 5, 11
• Financial Services Act 2025, ss. 5A, 16, 18, 27, 105; Schedule 1, Part 1 para. 3, Part 2 paras. 4, 43, 53B, 54; Schedule 2
• GEN Rulebook 2026, 4.5, 5.2, 5.5, 8.8
• Income Tax Act 2025, ss. 1(3), 2AA, 13O, 13OA, 13T, 13U, 13W, 13Y, 43(1)(a), 43(1)(ba), 43D, 62A, 108
• Employment of Foreign Workforce Act 2025, ss. 5, 8, 10, 22A
• Employment Act 2025, ss. 2AA, 10, 26–32
• Sale of Goods Act 2026, ss. 12–14; Unfair Contract Terms Act 2026, ss. 2, 3, 11, 30
• GCRO FAQ for GMCA Entities (3 June 2026, v0.2), Gelephu Corporate Registration Office