The Gelephu Mindfulness City has its own statutes, its own regulators and its own vocabulary. Investors, founders, fund managers and their advisers meet these terms in expressions of interest, licence applications, tax approvals and engagement letters, and most of them carry a precise statutory meaning that differs from the everyday use of the same word. This glossary, maintained by Basnet Law Pte. Ltd., the first law firm incorporated in GMC, defines each term in plain language and anchors it to the GMC Act or rulebook it comes from. It is organised by subject: the jurisdiction, companies and registration, financial services and licensing, digital assets, funds and family offices, tax, employment and immigration, land and banking, and contracts. Where a term has a defined meaning in an Act, the definition below follows the Act. Last reviewed: September 2026.
The jurisdiction
Gelephu Mindfulness City (GMC). A Special Administrative Region of the Kingdom of Bhutan established by Royal Charter No. 1 of 2024, with full executive and legislative powers and an independent judiciary. About one million acres, roughly 4,000 square kilometres, on Bhutan's southern plains bordering Assam, India.
Royal Charter No. 1 of 2024. The founding instrument of GMC, granted by His Majesty the King. Article 1 establishes the region and its powers and provides for final adjudication by GMC courts.
Gelephu Mindfulness City Authority (GMCA). The body that administers the region under the Charter, exercising the executive functions of GMC and hosting the registration, financial services and economic development offices.
Application of Laws Act 2024. The Act that determines what law applies in GMC. Section 3 makes the received common law and equity of established common law jurisdictions part of GMC law so far as suited to GMC. Sections 4 and 5 apply the statutes in Schedule A and the financial services rules in Schedule B with modifications. Section 5A applies Bhutan sales tax laws through Schedule C. Section 7 makes the applied general law presumptive in civil and commercial matters.
Received common law and equity. The body of judge-made law and equitable principles that applies in GMC under section 3 of the Application of Laws Act 2024. GMC courts and practitioners can rely on common law precedent from any common law jurisdiction, subject to GMC enactments.
Schedule A. The list of applied statutes from an established international financial centre that operate in GMC with the modifications stated in the Act. The list has been amended by the 2025 and 2026 amendment Acts as GMC enacted its own statutes in their place.
Schedule B. The list of applied financial services rules and rulebooks that operate in GMC alongside the Financial Services Act 2025, including the prudential, conduct and client-asset rules a licensed firm must follow.
Schedule C. The Bhutan sales tax laws applied to GMC under section 5A of the Application of Laws Act 2024.
GMC Act. A statute enacted for GMC under the Charter. Thirteen are in force: the Application of Laws Act 2024 and its amendments; the Companies Act 2025; the Customs Act 2025; the Employment Act 2025; the Employment of Foreign Workforce Act 2025; the Financial Services Act 2025; the Income Tax Act 2025; the Business Names Registration Act 2026; the Limited Liability Partnerships Act 2026; the Limited Partnerships Act 2026; the Partnership Act 2026; the Sale of Goods Act 2026; and the Unfair Contract Terms Act 2026. A GMC Act prevails over applied law.
Companies and registration
Gelephu Corporate Registration Office (GCRO). The registrar of companies, partnerships and business names in GMC. It assesses expressions of interest against the priority industries and incorporates entities under the Companies Act 2025.
Expression of interest (EOI). The first stage of the two-stage registration process, in which the proposed business, its ownership and its fit with the priority industries are presented to GCRO before incorporation.
Priority industries. The eight sectors GMC has designated for investment: Spiritual; Health and Wellness; Education and Knowledge; Agri-Tech and Forestry; Green Energy and Technologies; Finance and Digital Assets; Aviation and Logistics; Tourism.
Corporate service provider (CSP). A provider empanelled by GCRO through which incorporation filings are made. Incorporation through an empanelled corporate service provider has been mandatory since 1 November 2025.
Companies Act 2025. GMC's company law. It provides for private and public companies, capacity and powers (section 23), the modified doctrine of ultra vires (section 25), the abolition of constructive notice (section 25A), directors' authority to bind the company (section 25B), the resident director requirement (section 145), transfer of registration (Part 10A) and foreign company registration (section 368).
Private company limited by shares. The standard GMC vehicle: one shareholder, one director ordinarily resident in GMC, a registered office in GMC and no minimum share capital.
Director ordinarily resident in GMC. The at-least-one director whom section 145 of the Companies Act 2025 requires every company to have, resident in GMC in the ordinary sense, with the personal responsibilities of any director.
Registered office. The address in GMC at which a company is registered and at which notices are served. Every GMC company must have one.
Constitution. The document that governs a company's internal affairs, filed at incorporation. Under section 25A, third parties are not deemed to have notice of its contents.
Transfer of registration (redomiciliation). The process under Part 10A of the Companies Act 2025 (sections 357 to 359) by which a company incorporated elsewhere becomes a GMC company with its history, contracts and assets intact.
Foreign company. A company incorporated outside GMC that carries on business in GMC and registers under section 368 of the Companies Act 2025, with an authorised representative in GMC under section 370.
Authorised representative. The person in GMC responsible for a registered foreign company (Companies Act 2025, section 370) or a registered business name (Business Names Registration Act 2026, section 11).
Business name. A trading name registered under the Business Names Registration Act 2026 by a person or entity carrying on business under a name other than its own.
Limited liability partnership (LLP). A body corporate with the internal flexibility of a partnership, formed under the Limited Liability Partnerships Act 2026, with a resident manager under section 29.
Limited partnership. A partnership of one or more general partners with unlimited liability and one or more limited partners, formed under the Limited Partnerships Act 2026, with a local manager under section 28 where the general partners are abroad. Used for fund vehicles and joint ventures.
Partnership. A general partnership governed by the Partnership Act 2026.
Financial services and licensing
Gelephu Financial Services Office (GFSO). The single regulator of banking, capital markets, payments, insurance, funds and digital asset activities in GMC under the Financial Services Act 2025.
Financial Services Act 2025. The Act that licenses and regulates financial services in GMC. It contains the General Prohibition (section 16), the licence application power (section 27), the Regulator's power to have regard to foreign regulators (section 29), the list of Regulated Activities in Schedule 1 and the financial promotion exemptions in Schedule 2.
General Prohibition. Section 16: no person may carry on a Regulated Activity by way of business in GMC, or purport to do so, unless licensed or exempt. An agreement made in breach is unenforceable against the other party.
Regulated Activity. An activity listed in Schedule 1 of the Financial Services Act 2025, such as accepting deposits, dealing in investments, arranging deals, managing assets, operating a trading facility, providing custody, providing money services or issuing a fiat-referenced token, when carried on by way of business in GMC.
By way of business. The threshold that brings an activity within the General Prohibition. Occasional, non-commercial or purely internal activity may fall outside it; the test is applied to the facts.
Exclusion. A provision in Schedule 1 that takes an activity outside a Regulated Activity, for example an order-routing system that is not a Multilateral Trading Facility, transactions within a group, or dealings by non-GMC persons through a Licensed Firm.
Financial Services Licence. The authorisation GFSO grants under section 27 of the Financial Services Act 2025 to carry on specified Regulated Activities, subject to conditions.
Licensed Firm. A person holding a Financial Services Licence.
In-Principle Approval (IPA). GFSO's conditional approval of a licence application, issued on average within two to three months, listing the conditions, typically incorporation, capital, office, staff and bank account, that must be met before the licence is issued.
Approved Person. An individual approved by GFSO under GEN 5.6 to perform a controlled function at a Licensed Firm, such as a director, senior executive, compliance officer or money laundering reporting officer.
Controller. A person who holds or controls a specified proportion of the shares or voting power of a Licensed Firm. Changes of control require GFSO's approval.
GEN Rulebook 2026. The general rulebook applied to Licensed Firms, covering licence applications (GEN 5.2), Approved Persons (GEN 5.6), head-office requirements, mandatory appointments, financial promotions, complaints and changes of control.
Non-GMC Firm. A firm regulated by a regulator outside GMC. Under section 29 of the Financial Services Act 2025 GFSO may have regard to the opinion of that regulator, weighted by the nature and scope of its supervision.
Accelerated review pathway. The GFSO process for firms already licensed in an established international financial centre, in which the home licence and supervisory record are taken into account to shorten review.
Recognised Foreign Jurisdiction. A jurisdiction whose fund managers may manage a GMC fund on a no-objection from GFSO rather than a full licence, under the Fund Rulebook.
No-objection. GFSO's confirmation, targeted within four weeks, that it does not object to a fund or a foreign-recognised manager operating in GMC.
Financial promotion. An invitation or inducement to engage in investment activity communicated in the course of business. Restricted by the Financial Services Act 2025 unless the communicator is licensed, the content is approved by a Licensed Firm or a Schedule 2 exemption applies.
Prudential rulebooks. The Schedule B rules that set capital, liquidity and client-asset requirements for each category of Licensed Firm. Minimum capital is set there, not in the Act.
Digital assets
Virtual Asset. A digital representation of value that can be traded or transferred and used for payment or investment. Named on the face of the Financial Services Act 2025 in the custody, trading facility and arranging activities.
Accepted Virtual Asset. A virtual asset that meets the criteria set in the Regulator's Rules for use by Licensed Firms.
Virtual asset service provider (VASP). A business that carries on a Regulated Activity in relation to virtual assets, such as an exchange, a custodian, a broker or a dealer, and holds or needs a GFSO licence.
Multilateral Trading Facility (MTF). A facility on which financial instruments, virtual assets or spot commodities are traded by multiple parties whose orders interact. Operating one is a Regulated Activity. An order-routing system where orders are merely transmitted is excluded.
Organised Trading Facility (OTF). A trading facility other than an MTF on which orders interact on a discretionary basis. Operating one is a Regulated Activity.
Providing Custody. Safeguarding financial instruments, virtual assets or spot commodities belonging to another. A Regulated Activity that expressly covers virtual assets.
Fiat-Referenced Token (FRT). A virtual asset that references a fiat currency and is designed to maintain a stable value against it. Issuing one is a named Regulated Activity, read together with Providing Money Services.
Accepted Fiat-Referenced Token. A fiat-referenced token that satisfies the reserve, redemption and disclosure criteria in the Regulator's Rules and Directions.
Providing Money Services. Payment, remittance, currency exchange and related services carried on by way of business, a Regulated Activity that payment and stablecoin firms commonly hold alongside token issuance.
Perimeter opinion. A written legal opinion on whether a business model falls inside or outside the Regulated Activities, which permissions it needs and which exclusions apply.
Token classification opinion. A written opinion on how a token is characterised under GMC law, addressed to the issuer and, on request, to exchanges, launchpads or counterparties.
Funds and family offices
Fund Rulebook. The rulebook applied to funds and fund managers in GMC, governing registration, the manager, the custodian, disclosure and the no-objection routes.
Variable capital company (VCC). A corporate fund vehicle whose capital varies with subscriptions and redemptions, which may be structured as an umbrella with segregated or incorporated cells.
Cell. A ring-fenced portfolio within a VCC whose assets and liabilities are separated from those of other cells.
Fund manager. The person that manages a fund's assets, licensed by GFSO or operating on a no-objection from a Recognised Foreign Jurisdiction.
Single-family office. A vehicle managing the wealth of one family. Operates on notification to GFSO rather than a licence.
Multi-family office. A firm managing the wealth of more than one family. Requires a GFSO licence.
Section 13O, 13OA and 13U exemptions. The income tax exemptions for approved funds, family office vehicles and their structures under the Income Tax Act 2025, granted for 15 years on approval.
Tax
Income Tax Act 2025. GMC's tax statute. Company rate 15%; non-citizen individuals 0% to 31 December 2030; no capital gains tax; no withholding on dividends; 10% withholding on interest to non-residents, reduced to 0% for approved funds, family offices and managers; approval-based reliefs; advance rulings under section 108.
Founders company. A company approved under the Income Tax Act 2025 for an exemption from company tax for up to 15 years. Approval only, and no new approvals after 31 December 2030.
Strategic and development company. A company approved for a concessionary rate of not less than 5% for up to 20 years under the Income Tax Act 2025, with the same approval cut-off.
Advance ruling. A binding ruling from the tax authority under section 108 of the Income Tax Act 2025 on how the Act applies to a proposed arrangement.
Withholding tax. Tax deducted at source on payments to non-residents. In GMC there is none on dividends and 10% on interest, with a 0% rate for approved funds, family offices and managers.
Double taxation agreement (DTAA). A treaty allocating taxing rights between two countries. The Bhutan and Singapore agreement was signed on 12 May 2026.
Currency of account. In the Income Tax Act 2025, "$" means United States dollars. GMC has no foreign exchange controls other than for the Ngultrum.
Employment and immigration
Employment Act 2025. GMC's employment statute, governing contracts, hours, leave, termination and dispute resolution for employees in GMC.
Employment of Foreign Workforce Act 2025. The Act under which work passes for foreign employees and founders are issued, administered by the Controller of Work Passes.
Work pass. The permission a foreign national needs to work in GMC, issued under the Employment of Foreign Workforce Act 2025, sections 5 and 7.
Controller of Work Passes. The officer who issues, renews and revokes work passes.
Digital Nomad Visa. The sandbox programme, run with Nomad Club, admitting remote workers to GMC for twelve months, renewable to twenty-four.
Land, banking and institutions
Economic Development Group (EDG). GMC's one-stop shop for land, long-term leases, site clearances and incorporation coordination.
Long-term lease. The form in which land is held in GMC. There is no freehold; sites are leased from the Authority through the Economic Development Group.
DK Bank. The first GMC-licensed bank, operating in nine currencies and offering digital asset services.
Customs Act 2025. The Act governing the import and export of goods into and out of GMC.
Contracts
Sale of Goods Act 2026. GMC's statute on contracts for the sale of goods, in force for contracts made on or after 15 June 2026 (section 63).
Unfair Contract Terms Act 2026. GMC's statute limiting exclusion clauses and unfair terms, in force for contracts made on or after 15 June 2026 (section 30).
Engagement letter. The written agreement between a client and Basnet Law Pte. Ltd. that fixes scope, fee, timing and reliance before work starts. An attorney-client relationship begins with it, not with an enquiry.
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
