A single-family office in the Gelephu Mindfulness City is not licensed. It is incorporated in GMC, it notifies the Gelephu Financial Services Office of what it does, and if it holds at least US$10 million of assets and meets four conditions it is an approved family office with no tax on its investment income for up to 15 years, without filing an incentive application. The family keeps its investment powers even where a trust owns the office, the conditions phase in over three years, and the framework takes effect on or after 1 October 2026.
In short
- A single-family office manages the assets of one family and no third-party money. It is exempt from licensing and only notifies the Gelephu Financial Services Office (GFSO) of its activities. A multi-family office is a licensed business.
- Two trustee refinements: an office with its own dedicated trustee stays exempt; an office that uses the trustee services of a multi-family office needs GFSO approval for that arrangement.
- The exemption has three parts for up to 15 years from the first full financial year: no tax on income from designated investments, no tax for the office's investment manager whether in-house or separate, and no withholding tax on interest paid to non-residents. Dividends carry no withholding tax in any case.
- Four conditions: US$10 million of assets under management, tested once at entry and including enforceable committed capital; management and control in GMC from Year 2 with representatives present at least 30 days a year; two Bhutanese hires and more than US$50,000 of local spending a year from Year 3; and a GMC bank account.
- Compliance is reported once a year in the corporate tax return. The incentive ends only after two consecutive years of non-compliance, from the second year, with no clawback.
- A trust may own the office. Trusts are recognised under the received common law and equity that the Application of Laws Act 2024 makes part of GMC law, the settlor may keep the investment powers, and the trustee may sit abroad.
What a single-family office is
A family office is a privately owned entity set up to manage and coordinate a family's wealth, investments, assets and financial affairs, preserving, growing and transferring that wealth across generations, typically under a professional investment manager.
A single-family office in GMC is a GMC-incorporated entity managing funds on behalf of one ultra-high-net-worth family, often owned by a trust. Unlike a fund, it operates as an internalised investment and governance platform, combining operational control in the family's hands with outsourced specialist services. Its usual functions are asset management, succession and estate planning, family governance, luxury asset administration and philanthropy.
The multi-family office is a different business. It manages the assets of more than one family and is treated as a financial services business. Depending on its activities it may need a Financial Services Licence from GFSO covering dealing in investments, managing assets or managing collective investment funds, and GFSO may ask it to add further regulated activities where its model includes, for example, trustee services. On tax, a single-family office that meets the conditions is approved automatically, while a multi-family office must apply to the Authority.
The regulatory position: notification, not a licence
Because a single-family office manages the assets of one family and does not serve third-party customers or manage third-party funds, it is exempt from licensing in GMC. Its only regulatory obligation is to notify GFSO of its activities. There is no application and no approval to wait for.
Two refinements concern trustees:
- Dedicated trustee: still exempt. A single-family office that engages a dedicated trustee of its own continues to be exempt from licensing.
- Multi-family office as trustee: approval needed. Where the office engages the trustee services of a multi-family office, it requires approval from GFSO for that arrangement.
The annual regulatory submission and audit report that GFSO expects are obligations of licensed entities; a single-family office meets the tax authority through its annual corporate tax return instead.
What the exemption covers
Under sections 13O, 13OA and 13U of the GMC Income Tax Act, a single-family office that meets the qualifying conditions is an approved family office and takes the incentive without applying for it. The incentive runs for up to 15 years commencing from the first full financial year of the office, and it has three parts:
- Income. Tax exemption on all income from designated investments. The list is broad: shares, bonds and money-market instruments, digital assets, real estate investment trusts and exchange-traded funds, derivatives, any immovable property wherever situated, deposits, foreign exchange, loans, commodities, structured products, units in unit trusts and business trusts, partnership and limited liability company interests, receivables and physical precious metals. The one exclusion is a digital token that gives its holder an interest in an underlying asset outside the list.
- The investment manager. Tax exemption for the family office's investment manager, whether the manager is housed within the family office or is a separate legal entity.
- Interest to non-residents. Withholding tax exemption on interest payments the family office makes to non-tax residents of GMC.
The withholding position in full. GMC imposes no withholding tax on dividends, so dividends to non-resident family members carry no withholding obligation. The domestic withholding rate on interest paid to non-residents is 10%, and the incentive replaces it with 0%: the office pays the full amount and files a withholding tax return at the 0% rate with GMCA by the 15th day of the second month following the month of payment. The sale of units or shares and liquidation proceeds are returns of capital, and GMC has no capital gains tax.
No taxable presence for the family. A non-resident who merely invests in, or receives distributions from, a family office in GMC does not create a taxable presence in GMC by doing so. There are no restrictions on the investments a family office may make or on investor profile.
The four qualifying conditions in detail
1. Assets under management: US$10 million, tested once
The family office must have at least US$10 million of assets under management at the point of qualifying for the incentive. Two rules soften the test:
- Committed capital counts. Assets under management include committed capital, so long as the commitment is legally enforceable.
- The test is applied once. The requirement only has to be met at the point of qualifying. The office is not re-tested as markets move, and the assets at entry fix the set of conditions it must then satisfy.
2. Management and control: from Year 2, with 30 days of presence
The family office must be managed and controlled in GMC from Year 2, and its representatives must be resident in GMC or the rest of Bhutan for at least 30 days per year.
Any part of a day counts as a full day, so a representative who lands in GMC at 11pm has spent one day in GMC. Thirty days is reachable through a handful of visits, and the first year carries no requirement at all.
3. Local hiring and spending: from Year 3, maintained throughout
The family office must meet the local hiring and spending requirements by Year 3 and maintain them throughout the incentive period:
- Hire at least two Bhutanese residing in GMC in front or middle office roles.
- Spend more than US$50,000 in GMC annually, including salaries. Local spending means operating expenses incurred locally and paid to a local recipient: salaries, rental of offices, administrative and professional costs paid locally, and donations to an approved charity in GMC. The salaries of the two Bhutanese hires count towards the figure.
The Year 3 start gives a family office time to ramp up its activities in GMC, and no capital deployment requirement is imposed.
4. Bank account: a GMC-licensed bank
The family office must maintain a bank account with a GMC-licensed bank. This condition has no phase-in and is met at incorporation.
Annual reporting and the two-year grace rule
An approved family office reports its achievements against the four conditions each year in its corporate tax return. That single filing is the whole compliance mechanism.
If a condition is missed, the consequence is measured:
- One year of non-compliance: the incentive continues. An office that fails a condition in Year 7 continues to enjoy the incentive in Year 7.
- Two consecutive years: termination from the second year. If the office still fails in Year 8, the incentive is terminated with effect from Year 8.
- No clawback. The incentive enjoyed in the first seven years is not recovered.
A family therefore has a full year to repair a shortfall, and nothing reaches back into closed years.
Holding the family office through a trust
The framework anticipates a single-family office owned by a trust, because a trust delivers succession and estate planning and asset protection. A properly structured trust holds the family's global asset base outside any individual's estate, so the assets pass under the trust's own governance rather than through lengthy and costly probate, and they are far harder for a future creditor or a party to a marital dispute to reach.
Legal basis. Trusts are recognised in GMC through Section 3 of the Application of Laws Act 2024, which makes the received common law and equity part of GMC law. A trust divides property into a legal interest held by the trustee and an equitable interest held for the beneficiaries, so the trust assets sit apart from the trustee's own estate.
The three certainties. An express trust is properly constituted when it satisfies:
- Certainty of intention: clear evidence that the settlor intended to create a trust.
- Certainty of subject matter: the trust assets are clearly defined.
- Certainty of objects: the beneficiaries are identifiable or ascertainable.
Retained investment powers. Where GMC law is the governing law, the settlor may retain, or grant to someone else, the investment or asset management powers over the trust without invalidating it, provided the trust is properly constituted and satisfies the three certainties. In practice the family, or an investment committee it chooses, keeps control of how the money is invested while the trustee holds legal title and succession runs through the trust deed.
Trustee abroad, GMC law at home. The construction of trusts is flexible, including the ability to have the trustee in one jurisdiction while employing the trust law of another. Trusts may be established in GMC with GMC law as the governing law for single-family office structuring, succession and estate planning, and asset protection.
The planned GMC Trustees Act. The Authority is considering a GMC Trustees Act, modelled on an established trustees statute rooted in English trust law and equitable principles, to give families and trustees a familiar statutory framework for trust administration, trustee duties and governance.
Home-country advice. Non-GMC tax residents may face home-country tax and reporting consequences from transferring assets into the structure, and the Authority advises consulting tax advisers before the transfer. Basnet Law coordinates that advice with counsel in the family's home jurisdiction.
Capital mobility, banking and custody
No exchange control outside the Ngultrum. GMC does not impose foreign exchange controls other than on transactions involving Bhutanese Ngultrum. A family office that does not transact in Ngultrum faces no foreign exchange rules and no profit repatriation restrictions, other than the ordinary requirements on retained profits under the Companies Act.
DK Bank. DK, the main GMC-licensed bank, offers multi-currency corporate accounts in US dollars, pounds sterling, euro, yen, Australian dollars, Hong Kong dollars, Singapore dollars, Indian rupees and Ngultrum, with Fedwire access for US dollars and local real-time gross settlement for Singapore dollars and rupees. It opens offshore corporate accounts for jurisdictions such as the Cayman Islands and the British Virgin Islands, declining those on major sanctions lists, receives and sends selected stablecoins such as USDC and USDT with liquidity providers for on- and off-ramping, provides custody in the customer's name for fixed income and equities listed on major global exchanges, and facilitates trading in treasury bills and government and corporate bonds. Further capabilities are being built.
The bank account condition, custody of a listed portfolio and receipt of digital assets can therefore all be handled at one institution.
Timing: 1 October 2026
The Guidelines take effect on or after 1 October 2026, and the 15-year period runs from the office's first full financial year. The sequence follows the phase-in: incorporate, open the bank account, notify GFSO and hold US$10 million of assets or enforceable commitments in Year 1; management and control and 30 days of presence in Year 2; two Bhutanese hires and US$50,000 of local spending by Year 3.
How the engagement runs
- Confirm the office is single-family. We confirm the office manages one family's assets and no third-party money, so the route is notification and the incentive is automatic, and we prepare the GFSO approval if a multi-family office will act as trustee.
- Design the trust and the holding chain. Where a trust will own the office, we settle it on the three certainties, fix GMC law as the governing law, place the trustee, and reserve the investment powers to the settlor or the family's investment committee.
- Incorporate through GCRO and open the bank account. We incorporate through the Gelephu Corporate Registration Office and open the DK Bank account in parallel, since the account is one of the four conditions.
- Notify GFSO. We file the notification of the office's activities in GMC, which completes the regulatory step.
- Record the asset position at entry. We document the assets under management and any legally enforceable committed capital at the point of qualifying, so the US$10 million test is evidenced once.
- Build the compliance calendar. We set the Year 2 management and control arrangements and day count, the Year 3 hiring and spending plan, the annual tax return reporting, and the 0% withholding return for interest paid to non-residents.
- Coordinate home-country advice. Before assets transfer into the structure, we work with the family's home-jurisdiction advisers on the tax and reporting consequences.
Frequently asked questions
Regulation
Does a single-family office need a licence from GFSO?
No. Because it manages the assets of one family and no third-party funds, it is exempt from licensing and only has to notify GFSO of its activities. A multi-family office may need a Financial Services Licence depending on its activities.
What happens if the family office uses a trustee?
An office with its own dedicated trustee remains exempt from licensing. An office that engages the trustee services of a multi-family office needs GFSO approval for that arrangement.
The exemption
Does the family office have to apply for the tax incentive?
No. A single-family office that meets the qualifying conditions is considered an approved family office and takes the incentive without applying for it. Only multi-family offices, funds and investment managers apply to the Authority.
Is there withholding tax on dividends or interest paid to family members abroad?
There is no withholding tax on dividends in GMC. The domestic withholding rate on interest paid to non-residents is 10%, but an approved family office is exempt, pays the full amount and files a withholding tax return at 0% with GMCA by the 15th day of the second month following the month of payment.
The conditions
When is the US$10 million asset test measured, and does committed capital count?
Once, at the point of qualifying. Committed capital counts so long as it is legally enforceable, and the office is not re-tested as the portfolio moves.
How are the 30 days counted?
Representatives must reside in GMC or the rest of Bhutan for at least 30 days per year from Year 2, and any part of a day counts as a full day. A representative arriving at 11pm has spent one day in GMC.
What counts as local spending?
Operating expenses incurred locally and paid to a local recipient: salaries, rental of offices, administrative and professional costs paid locally, and donations to an approved charity in GMC. The threshold is more than US$50,000 a year including salaries, from Year 3 onwards, alongside at least two Bhutanese hires in front or middle office roles.
What if a condition is missed in a later year?
The incentive is terminated only after two consecutive years of non-compliance, from the second of those years. An office that misses in Year 7 keeps the incentive for Year 7; if it misses again in Year 8, the incentive ends from Year 8, with no clawback for the first seven years.
The trust
Can the settlor keep control of investments in a trust-owned family office?
Yes. Where GMC law governs the trust, the settlor may retain, or grant to someone else, the investment or asset management powers without invalidating the trust, provided it satisfies the three certainties.
Can the trustee be outside GMC?
Yes. The trustee may sit in one jurisdiction while the trust employs the law of another. Trusts may also be established in GMC with GMC law as the governing law, and a GMC Trustees Act is under consideration to give trustees a statutory framework for administration, duties and governance.
The bottom line
The single-family office regime in GMC removes the licence and the incentive application and replaces them with a notification and four conditions that a family with US$10 million of assets can meet on a three-year ramp. The 15-year exemption covers investment income, the manager and interest paid abroad, the two-year grace rule protects against a single bad year, and the trust rules let the family hold the office for succession while keeping the investment decisions. From 1 October 2026 the work for a family is to decide the holding structure, incorporate, open the account and notify GFSO.
Related guides
Sources
- Gelephu Mindfulness City Authority, GMC Guidelines on Regulatory Requirements and Tax Incentives for Family Offices, released 20 September 2026, effective on or after 1 October 2026.
- Gelephu Mindfulness City Authority, FAQs: Family Offices, Funds and Investment Managers, released 20 September 2026, with the Annex of designated investments.
- GMC Income Tax Act, sections 13O, 13OA and 13U (tax incentive scheme for family offices).
- Application of Laws Act 2024, Section 3 (received common law and the principles and rules of equity).
- Companies Act (requirements on retained profits).
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
