The scenarios below show how Basnet Law Pte. Ltd., the first incorporated law firm in the Gelephu Mindfulness City Special Administrative Region (GMC), approaches a matter: identify the statutory path, cite it, and separate what the Act settles from what it delegates. Every scenario is an illustrative scenario, not a real matter. Names, facts and outcomes are invented for explanation only; no client, result or timeline is implied. "$" means United States dollars throughout (Companies Act 2025, s. 4A).

Scenario 1 — Redomiciliation with a strategic and development company application

Illustrative scenario, not a real matter. A technology holding company incorporated outside GMC wants to move into GMC without breaking its contracts, and to seek a concessionary tax rate.

Statutory path. Reserve the name (Companies Act 2025, s. 357), apply for transfer of registration with the certified constitutional documents and the proposed GMC constitution (s. 358(2)), and obtain the notice of transfer of registration (s. 359(3)). Registration "does not create a new legal entity" and does not affect the company's property, rights or obligations (s. 361(2)); deregistration evidence from the old jurisdiction is due within 60 days, extendable (s. 359(6)–(7)). Appoint a director ordinarily resident in GMC (s. 145). In parallel, apply in writing for approval as a strategic and development company (Income Tax Act 2025, s. 43D(2)); the letter of approval specifies the qualifying business, the rate of not less than 5%, the commencement date and the relief period (s. 43D(5)). No approval after 31 December 2030 (s. 43D(4)). Sections 34G and 34H are reviewed for the transition year.

Scenario 2 — A centralised virtual asset exchange licence stack

Illustrative scenario, not a real matter. An operator wants to run a spot exchange for virtual assets with its own custody and fiat on-ramp.

Statutory path. Test each function against the General Prohibition (Financial Services Act 2025, s. 16). The matching engine is operating an MTF on which virtual assets are traded (Schedule 1, para. 54(1)(a)); a pure order router where orders "are merely transmitted but do not interact" falls outside (para. 55). Holding client assets is providing custody (para. 43(1)(a)). Fiat conversion is providing money services (para. 52) unless a necessary part of another Regulated Activity (para. 53). Trading against clients is dealing as principal (para. 4). The applicant must be a body corporate (s. 27(1); GEN 5.2.2) with head office in GMC (GEN 4.5.1(1)) and a Senior Executive Officer, Compliance Officer and Money Laundering Reporting Officer approved before trading (GEN 5.5.1(1)). Token admission follows GFSO's Accepted Virtual Asset criteria (s. 5A(1)(b)). Capital and fees are set by GFSO.

Scenario 3 — A founder relocating with a work pass and 0% personal tax

Illustrative scenario, not a real matter. A non-Bhutanese founder incorporates a GMC company and moves to Gelephu.

Statutory path. Incorporate with one member (Companies Act 2025, s. 20A). The founder needs a work pass: as an employee of the company under s. 7 of the Employment of Foreign Workforce Act 2025, or as a self-employed foreigner under s. 10. The pass makes the founder "ordinarily resident" for the resident director requirement (Companies Act 2025, s. 145(1A)). The pass is tied to the stated employer and occupation (s. 12(1)), and the company keeps the s. 8 register. As an individual who is not a citizen of Bhutan, the founder's chargeable income derived on or before 31 December 2030 is taxed at 0% (Income Tax Act 2025, s. 43(1)(ba)); the company's income is taxed at 15% (s. 43(1)(a)). The founder's salary is in USD (Employment Act 2025, s. 2AA).

Scenario 4 — A family holding structure using a limited partnership

Illustrative scenario, not a real matter. An international family wants a GMC vehicle in which family members invest without managing.

Statutory path. Form a limited partnership with a general partner (unlimited liability) and limited partners whose liability is capped at their agreed contribution (Limited Partnerships Act 2026, s. 3). Limited partners must not take part in management (s. 6), but the First Schedule safe harbours allow them to advise, attend meetings and vote on dissolution, asset sales and admission of partners. A general partner lodges the registration statement (s. 11); if every general partner is outside GMC without a work visa or pass, the Registrar may require a local manager (s. 28). For tax, Income Tax Act 2025, s. 36C applies. The s. 13T and s. 13OA exemptions are enacted but commence only on Gazette notification (s. 1(3)); the structure is designed to use them when commenced, without relying on them now.

Scenario 5 — An employer hiring foreign staff and the s. 8 register

Illustrative scenario, not a real matter. A GMC subsidiary hires ten foreign engineers and two Bhutanese staff.

Statutory path. Check each foreign hire's passport (Employment of Foreign Workforce Act 2025, s. 5(5)) and obtain a work pass before the start date (s. 5(1)). Keep the register of foreign employees in the Controller's form, open to inspection (s. 8). Pay any levy imposed by Gazette order (s. 11). Draft contracts at or above the Employment Act 2025 floor (s. 8) with equal notice periods (s. 10(2)) and hours within 8 a day and 44 a week (s. 38(1)). Never deduct from a foreign employee's salary as consideration for employment (s. 22A). On any departure, obtain tax clearance before final payment (Employment Act 2025, s. 24) and apply to cancel the pass (Foreign Workforce Act, s. 9(2)).

Scenario 6 — A foreign firm's trading software and the perimeter

Illustrative scenario, not a real matter. A software vendor outside GMC licenses order-management software to GMC Licensed Firms and asks whether it needs a GFSO licence.

Statutory path. The question is whether the vendor carries on a Regulated Activity by way of business in GMC (Financial Services Act 2025, s. 16; Schedule 1, Part 1, para. 3). Arrangements not causing a deal (para. 17), enabling parties to communicate (para. 18), order routing where orders do not interact (para. 55) and supply of services (para. 76) are examined, together with the non-GMC person exclusions (paras. 71, 79). Marketing into GMC is checked against the Financial Promotion Restriction, which reaches communications from outside GMC that are "capable of having an effect in GMC" (s. 18(3)).

Frequently asked questions

Are these real cases?

No. Each is a hypothetical constructed to show the statutory path. We do not publish client matters or results.

Why do the scenarios stop short of fees and timings?

Because the Acts leave them to regulations, the Registrar, the Controller and GFSO. We confirm current figures in an engagement.

Can a scenario combine with an advance ruling?

Not yet. Section 108 of the Income Tax Act 2025 commences only on Gazette notification (s. 1(3)(y)).

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

References

• Companies Act 2025, ss. 4A, 20A, 145, 357, 358, 359, 361
• Income Tax Act 2025, ss. 1(3), 13OA, 13T, 34G, 34H, 36C, 43(1)(a), 43(1)(ba), 43D, 108
• Financial Services Act 2025, ss. 5A, 16, 18, 27; Schedule 1, Part 1 para. 3, Part 2 paras. 4, 17, 18, 43, 52, 53, 54, 55, 71, 76, 79
• GEN Rulebook 2026, 4.5.1, 5.2.2, 5.5.1
• Employment of Foreign Workforce Act 2025, ss. 5, 7, 8, 9, 10, 11, 12, 22A
• Employment Act 2025, ss. 2AA, 8, 10, 24, 38
• Limited Partnerships Act 2026, ss. 3, 6, 11, 28, First Schedule