A Web3 project is rarely one company. The intellectual property, the people who build the protocol, the entity that issues the token, the treasury that holds it and the vehicle that raises capital carry different risks, different tax profiles and different regulatory perimeters, and putting them in one company mixes liabilities that should stay apart. This guide sets out the structure we build for Web3 projects in the Gelephu Mindfulness City, entity by entity, with the GMC Act each one relies on, and the questions that decide whether a project needs all of them or two.
In short
- Four roles, usually four entities: a holding company for the intellectual property and the founders' equity, a development company that employs the team and contracts with vendors, a token issuer that sells or distributes the token, and a treasury that holds the project's digital assets.
- All four can be GMC private companies under the Companies Act 2025, with one director ordinarily resident in GMC and a registered office in GMC, and no minimum capital.
- Only the token issuer and, if the project runs a platform, an operating company touch the Financial Services Act 2025 perimeter. The holding company and the development company are ordinary companies.
- Tax follows the structure: 15% company tax, no capital gains tax, no withholding on dividends, and 0% for non-citizen founders to 31 December 2030 under the Income Tax Act 2025, with the founders company exemption available on approval.
- Where the project wants community governance, GMC offers companies limited by guarantee, trusts under the received common law and equity, and contractual governance layers; we advise on which fits.
Why one company is the wrong answer
Founders start with one company because it is fast. The problems arrive with the first token sale, the first exchange listing, the first employee dispute and the first investor's due diligence. A token issued by the same company that owns the code and employs the team exposes the code and the payroll to token-holder claims. An exchange asking for a legal opinion on the issuer wants an issuer whose only business is issuing. An investor buying equity wants the intellectual property in the entity whose shares it is buying, not in an entity that also carries regulatory permissions. Separating the roles is not an offshore trick; it is how the liabilities are kept where they belong.
The four entities
1. Holding company: intellectual property and founders' equity
What it does. Owns the protocol's intellectual property, the brand, the domain names and the shares of the other companies. The founders and the equity investors hold shares here.
GMC vehicle. A private company limited by shares under the Companies Act 2025. Capacity and powers derive from section 23, the doctrine of ultra vires is modified by section 25, and directors' authority to bind the company is protected by section 25B, so counterparties do not need to read the constitution to rely on a signature.
Why it matters. Equity fundraising happens at this level. Share classes, vesting, drag and tag rights and investor protections are written into the constitution and a shareholders' agreement governed by the received common law of contract under section 3 of the Application of Laws Act 2024. The Sale of Goods Act 2026 and the Unfair Contract Terms Act 2026 do not bite on a share subscription, but the common law rules on misrepresentation do, which is why the disclosure to investors is checked before signature.
Tax. Dividends from subsidiaries carry no withholding tax, and there is no capital gains tax on a sale of the subsidiaries' shares. A founders company approval under the Income Tax Act 2025 can exempt the holding company's income for up to 15 years, on application before 31 December 2030.
2. Development company: the team and the vendors
What it does. Employs the engineers, signs the vendor and cloud contracts, and licenses the intellectual property from the holding company under a development agreement. It has revenue only if the group pays it for its work, which is why an intra-group services agreement at arm's length is drafted from day one.
GMC vehicle. A second private company. Employment contracts follow the Employment Act 2025; foreign engineers need work passes under the Employment of Foreign Workforce Act 2025, issued by the Controller of Work Passes. The Digital Nomad Visa programme covers remote contributors for twelve months, renewable to twenty-four.
Why it matters. Employment claims, vendor disputes and personal data obligations sit here and nowhere else. If the project fails, the development company can be wound down without touching the token issuer or the treasury.
Tax. Company tax at 15% on the service fee margin. Non-citizen employees pay 0% income tax to 31 December 2030, which changes the economics of relocating a team to Gelephu.
3. Token issuer: the entity that touches the perimeter
What it does. Creates and distributes the token, signs the token sale documents, appoints the exchange and the market maker, and holds the legal opinion that says what the token is.
GMC vehicle. A private company, or where the project wants the issuer to have no shareholders in the ordinary sense, a company limited by guarantee. The choice depends on who should benefit from the issuer's assets and on what the exchanges require.
The perimeter question. The Financial Services Act 2025 lists the Regulated Activities in Schedule 1. Issuing a Fiat-Referenced Token is a named activity. A token that is a specified investment, a security, a unit in a collective investment scheme or a derivative brings dealing, arranging and financial promotion rules into play. A pure utility or governance token may sit outside the perimeter, but the answer is written, not assumed: a token classification opinion under GMC law is what the exchanges, the banks and the regulator will ask for.
Financial promotions. The Act restricts communicating an invitation or inducement to engage in investment activity in the course of business unless the communicator is licensed, the content is approved by a Licensed Firm, or a Schedule 2 exemption applies. Whitepapers, launch announcements, referral programmes and influencer content are reviewed against that test before publication.
Tax. Token sale proceeds are analysed under the Income Tax Act 2025 according to what the token is: a sale of an asset, a prepayment for services, or capital. There is no capital gains tax, and an advance ruling under section 108 is the way to fix the treatment before the sale rather than argue it afterwards.
4. Treasury: holding the project's digital assets
What it does. Holds the project's own token allocation, the stablecoins and any bitcoin or other assets the project keeps, and executes the treasury policy: vesting releases, market-making loans, grants and buybacks.
GMC vehicle. A private company with a narrow constitution, a treasury policy adopted by the board and multi-signature or custodial arrangements documented as board resolutions. Where the assets are held by a third party, that party's Providing Custody permission under the Financial Services Act 2025 is checked, because custody of virtual assets belonging to another is a Regulated Activity.
Why it matters. Holding the treasury away from the issuer means that a claim against the issuer does not reach the project's reserves, and holding it away from the development company means that payroll disputes do not either.
Tax. No capital gains tax on disposals. Interest paid to non-residents carries 10% withholding, reduced to 0% for approved funds, family offices and managers, which matters where the treasury lends. Where the treasury is large enough to be run as a fund, the fund exemptions under sections 13O, 13OA and 13U become available on approval.
The optional layers
Operating company. If the project runs a platform, an exchange, a wallet or a payments product, that business needs its own licensed entity with the permissions mapped to Schedule 1: operating a Multilateral Trading Facility, Providing Custody, Dealing in Investments, Providing Money Services. The Gelephu Financial Services Office targets in-principle approval within two to three months on average, and firms licensed in an established financial centre can use the accelerated review pathway.
Fund vehicle. Where the project raises a fund rather than equity, a variable capital company under the Fund Rulebook, with a licensed or foreign-recognised manager on a four-week no-objection, is the vehicle. Fund and manager tax exemptions apply on approval.
Governance and community layer. GMC has no DAO statute, and it does not need one for most projects. A company limited by guarantee gives a membership body without shareholders. A trust under the received common law and equity holds assets for a defined purpose or class of beneficiaries with trustees who owe fiduciary duties. A contractual governance framework binds token holders to the rules they vote on. We choose the layer according to what the community is supposed to control and who is supposed to be liable when it does.
Foreign entities. Groups that already have an offshore foundation or a holding company elsewhere can keep it and register a GMC entity beneath it, or transfer the existing company into GMC under Part 10A of the Companies Act 2025 with its history intact.
The sequence we follow
- Map the project to the four roles. Which entity owns what, who is employed where, what the token is, and where the treasury sits. Most of the structure follows from that map.
- Classify the token in writing. The perimeter opinion decides whether the issuer needs a licence, whether an operating company is needed, and what the marketing rules are.
- Incorporate in order. Holding company first, then the development company and the treasury, then the issuer, so that shares, intellectual property assignments and licences flow the right way from the start.
- Paper the group. Intellectual property assignment to the holding company, development agreement, intra-group services agreement, treasury policy, token allocation and vesting schedules, board resolutions for wallet controls.
- Apply for the tax positions. Founders company approval where the group qualifies, an advance ruling on the token sale, and the fund exemptions if a fund vehicle is used.
- Bank the group. DK Bank onboarding for each entity, with the group chart, the opinions and the source-of-funds file prepared once and reused.
- Bring in the people. Work passes for the team, employment contracts under the Employment Act 2025, and the Digital Nomad Visa for contributors who stay remote.
Frequently asked questions
Do I need four companies from day one?
No. A project at the idea stage needs the holding company and the development company. The issuer is incorporated when the token is designed and the treasury when there are assets to hold. Incorporating them later is straightforward; moving intellectual property or a token out of the wrong company later is not.
Can the founders be non-residents?
Yes. Shareholders may be of any nationality. Each company needs at least one director ordinarily resident in GMC under section 145 of the Companies Act 2025 and a registered office in GMC. We advise on filling the resident role.
Does a governance token need a licence in GMC?
It depends on what the token is and what is done with it. A token that is not a specified investment and is not a fiat-referenced token can sit outside the Regulated Activities, but marketing it is still subject to the financial promotion rules if it amounts to an invitation to engage in investment activity. The classification opinion answers both questions.
Where should the intellectual property sit if we have investors in another country?
In the GMC holding company, licensed to the development company, unless the investors' documents require otherwise. Holding the intellectual property in the entity whose shares are sold is what equity investors expect, and GMC's absence of capital gains tax and dividend withholding makes an exit clean.
How is a token sale taxed in GMC?
Under the Income Tax Act 2025 according to the character of the transaction. There is no capital gains tax. Where the sale is trading income, the company rate is 15%, subject to any founders company exemption. An advance ruling under section 108 fixes the treatment in advance.
Can we use a foundation instead of a company for the issuer?
GMC does not have a foundation statute. The company limited by guarantee and the common law trust cover the cases a foundation is usually used for, and both are recognised by exchanges and banks when explained in the legal opinion.
Can an existing offshore structure move to GMC?
Yes. A company from another jurisdiction can transfer its registration into GMC under Part 10A of the Companies Act 2025, or a GMC entity can be added beneath the existing structure.
Related guides
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
- Application of Laws Act 2024, s. 3
- Companies Act 2025, ss. 23, 25, 25B, 145, Part 10A
- Financial Services Act 2025, s. 16, Schedule 1, Schedule 2
- Income Tax Act 2025, ss. 13O, 13OA, 13U, 108
- Employment Act 2025; Employment of Foreign Workforce Act 2025, ss. 5, 7
- Fund Rulebook (Funds) 2026; GEN Rulebook 2026
