His Majesty King Jigme Khesar Namgyel Wangchuck announced the Gelephu Mindfulness City on 17 December 2023. The Royal Charter was granted on 10 February 2024. In the two and a half years since, a Special Administrative Region of approximately 4,046 square kilometres in southern Bhutan has acquired its own companies law, its own tax law, its own financial services regulator and its own corporate registry. This guide explains what it is, who runs it, which law applies inside it, and what is already operating.
In short
- GMC is a Special Administrative Region in Gelephu, Sarpang District, on Bhutan's southern border with the Indian state of Assam. The official area figure is approximately 4,046 square kilometres. The city describes its constitutional arrangement as one country, two systems.
- The Royal Charter of 10 February 2024 gives GMC executive, legislative and independent judicial authority, including final adjudication, and establishes the GMC Authority as the highest decision-making body, chaired by the Druk Gyalpo.
- The masterplan is by Bjarke Ingels Group with Arup, Cistri and MQDC: eleven mandala-inspired neighbourhoods, low-rise and walkable, on renewable power. The airport's reported first phase capacity is about 1.3 million passengers a year.
- Eight priority industries: spiritual; health and wellness; education and knowledge; agri-tech and forestry; green energy and technologies; finance and digital assets; aviation and logistics; and tourism. The stated target is 100,000 jobs by 2030.
- Legally, the city runs on the Charter, the Application of Laws Act 2024 and sixteen enacted instruments, administered through the Gelephu Corporate Registration Office and the Gelephu Financial Services Office.
What GMC is
GMC is a Special Administrative Region of the Kingdom of Bhutan, created by Royal Charter. The Charter describes it as a fully independent and autonomous region within the Kingdom, with executive, legislative and independent judicial authority including the power of final adjudication.
The site is Gelephu, in Sarpang District, in the subtropical south on the Indian border. That location is the strategic point: Bhutan's population centres are in the Himalayan interior, while Gelephu sits on the plain, adjacent to a market of more than a billion people.
The governing philosophy is Gross National Happiness, Bhutan's framework for measuring development by wellbeing rather than output alone. Prime Minister Tshering Tobgay has put it directly: happiness and well-being of people must be the purpose of capitalism. That is why the city is being built at low density around walkability and water rather than as a tower cluster.
Who runs it
The Charter establishes the GMC Authority as the highest decision-making body. It has corporate legal personality and is chaired by the Druk Gyalpo. The Authority is charged with establishing the region's administrative and regulatory bodies, including a central bank, an independent judiciary and a legal system based on common law principles, and it may enact laws, which require Royal Assent. Its enumerated powers include fiscal, customs and tariff benefits, the grant of licences, entry into free trade agreements, the establishment of funds, and dealing in digital assets. Security is provided under the Armed Forces of Bhutan, and the Charter may be amended only by Royal Decree.
Two operating bodies matter most to businesses. The Gelephu Corporate Registration Office is the one-stop digital service portal for business registration, filing and company information. The Gelephu Financial Services Office is the independent regulator of all financial services and virtual asset activities. An Economic Development Group acts as a one-stop shop for investors, covering land identification, lease guidance, incorporation, regulatory clearances and government coordination.
The masterplan and what is being built
The masterplan was prepared by Bjarke Ingels Group with Arup, Cistri and MQDC. Its organising idea is eleven neighbourhoods on a mandala-inspired pattern, separated and connected by the rivers running down from the mountains, with inhabitable bridges carrying buildings across the water. The built form is low-rise and walkable, powered by renewable energy, with agriculture and forest kept inside the urban fabric.
Eight priority industries define what the city is recruiting for: spiritual; health and wellness; education and knowledge; agri-tech and forestry; green energy and technologies; finance and digital assets; aviation and logistics; and tourism. The list is not decorative. It is the screen applied to expressions of interest submitted to the corporate registry, so the industries determine who gets a login. The stated employment target is 100,000 jobs by 2030.
Construction of the city is under way. Gelephu International Airport is the anchor infrastructure, with a reported first phase capacity of about 1.3 million passengers a year and expansion plans towards around 5.5 million. High-speed rail links to India are planned. A domestic Nation Building Bond was launched in 2025 to fund the airport and wider infrastructure, and public demand was sufficient that calls were made to extend the subscription period.
Site preparation for the airport was carried out substantially by the Zhabtog volunteer programme, under which 7,050 participants cleared the site. A Pelsung youth programme began in October 2025, and a Tourism Spark Fund launched with 40 investment opportunities.
On the financial side, Matrixport received a financial services licence from the Authority in September 2025. In December 2025 a gold-backed token, TER, launched on Solana under a sovereign framework with custody by DK Bank, and the Authority appointed Matrixport's tokenisation arm as key technology provider. In May 2026 the city announced a fast-track licensing pathway for firms already licensed in Singapore, Abu Dhabi Global Market or Hong Kong, and BTSE Bhutan received in-principle approval for operating a multilateral trading facility for virtual assets and for institutional-grade custody. In July 2026 digital asset investment manager 3iQ Corp announced a partnership to manage a mandate backed by a portion of GMC's bitcoin reserves and to establish a long-term presence in Gelephu.
The legal architecture
This is where GMC differs from most new-city projects, and it is the part that determines whether a business can operate there.
The Charter. Royal Charter No. 1 of 2024 is the constitutional instrument. It grants the legislative power, establishes the Authority, and directs that the legal system be based on common law principles.
The Application of Laws Act 2024. This is the mechanism that gave the city a working body of law at the start rather than after a decade of drafting. It provides that the common law and equity of an established common law jurisdiction, including English common law and equity as received, applies in GMC so far as suited to local circumstances and subject to GMC enactments. A first schedule applies a list of statutes drawn from that jurisdiction as amended from time to time, with modifications. A second schedule applies a list of financial services rules modelled on those of an established international financial centre, with references to the foreign regulator read as references to the GMC Authority or its regulator. A third schedule, inserted in 2025, applies Bhutan's sales tax, customs and excise laws in GMC. The Act has been amended twice, by Law No. 7 of 2025 and by Law No. 7 of 2026.
The Act also sets the conflict rules. Where a matter is not covered, the Authority determines the position, Bhutan law applies generally as a default, the applied general law is presumptive for civil and commercial matters, and the applied general law prevails over the applied financial services rules in conflict unless the Authority decides otherwise. Until separate executive and judicial bodies exist, the Authority administers and enforces.
The currency rule. Every one of the principal Acts reads dollar references as United States dollars. Fees, penalties, capital thresholds and tax bands are all in US dollars. This is a dollar jurisdiction as a matter of statute, not of convention.
The registry. The Companies Act 2025 places the register with a Registrar of Companies, operating through the Gelephu Corporate Registration Office. Formation runs through an expression of interest, a mandatory empanelled corporate service provider since 1 November 2025, document submission, payment and the issue of a certificate of incorporation, a certificate of registered business name and a unique entity number. The published fee for a private company limited by shares is US$2,000, with US$2,000 payable annually, and the registry estimates about one week from a complete file. Minimum paid-up capital is US$1, and every company needs a registered office in GMC and a director ordinarily resident there.
The financial regulator. The Financial Services Act 2025 creates the licensing perimeter. Carrying on a regulated activity by way of business in GMC requires a licence unless an exclusion or exemption applies, and the Gelephu Financial Services Office supervises both traditional finance and virtual assets under the same rulebooks. The Act covers virtual assets, fiat-referenced tokens and spot commodities expressly, with a bar on regulated activity involving algorithmic stablecoin tokens and privacy tokens.
Tax. The Income Tax Act 2025 sets the company rate at 15% on every dollar of chargeable income. Individuals who are not citizens of Bhutan pay 0% on chargeable income derived on or before 31 December 2030. Bhutanese citizens resident in GMC pay on a progressive scale topping out at 15%. Approved founders companies and approved strategic and development companies can reach 0% and a rate of not less than 5% respectively, in each case by discretionary approval and with no new approvals after 31 December 2030.
Frequently asked questions
What is Gelephu Mindfulness City?
It is a Special Administrative Region of Bhutan, announced on 17 December 2023 and established by Royal Charter on 10 February 2024, covering approximately 4,046 square kilometres in Gelephu, Sarpang District, on the Indian border. It has its own legislature, its own laws, its own corporate registry and its own financial services regulator.
Is GMC part of Bhutan?
Yes. It is a Special Administrative Region within the Kingdom of Bhutan, described by the city as one country, two systems. Security is provided under the Armed Forces of Bhutan, and the Authority is chaired by the Druk Gyalpo. It nonetheless has its own legal system and its own body of enacted law.
Which laws apply in Gelephu Mindfulness City?
GMC's own Acts apply first. Where they do not cover a matter, the Application of Laws Act 2024 applies the received common law and a scheduled list of applied statutes for commercial matters, a scheduled list of applied financial services rules, and Bhutan's sales tax, customs and excise laws.
Can foreigners start a business in GMC?
Yes. Foreign-owned companies register through the Gelephu Corporate Registration Office, beginning with an expression of interest and engaging an empanelled corporate service provider, which has been mandatory for new incorporations since 1 November 2025. The company must have a registered office in GMC and at least one director ordinarily resident there.
The bottom line
Gelephu Mindfulness City is a genuine legal jurisdiction: a Charter, sixteen published instruments, a working registry with published fees, a financial regulator issuing licences, and a tax statute with real rates in it. Companies are already being formed, and the whole country stands behind the project. For a business deciding whether to be early, the useful question is which of these instruments it needs and how to use them. Basnet Law Pte. Ltd. is the first incorporated law firm in the Gelephu Mindfulness City and answers that question from the statute and the registry.
This article is general information about the law of the Gelephu Mindfulness City Special Administrative Region as at the date above. It is not legal advice and does not create a lawyer-client relationship.
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
Sources
- Acts: Royal Charter No. 1 of 2024, Articles 1, 3, 4, 5, 6, 7; Application of Laws Act 2024 (GMC Law No. 1 of 2024), ss. 3, 4, 5, 5A, 6, 7, 8, 10, 11 and Schedules A, B and C, as amended by Law No. 7 of 2025 and Law No. 7 of 2026; Companies Act 2025 (GMC Law No. 1 of 2025), ss. 4A, 8, 142, 145; Customs Act 2025 (GMC Law No. 2 of 2025); Employment Act 2025 (GMC Law No. 3 of 2025); Employment of Foreign Workforce Act 2025 (GMC Law No. 4 of 2025); Financial Services Act 2025 (GMC Law No. 5 of 2025), ss. 5A, 16, 19 and Schedule 1; Income Tax Act 2025 (GMC Law No. 6 of 2025), ss. 1(3), 13Y, 42, 43, 43D and Second Schedule; Business Names Registration Act 2026; Limited Liability Partnerships Act 2026; Limited Partnerships Act 2026; Partnership Act 2026; Sale of Goods Act 2026; Unfair Contract Terms Act 2026
- Bjarke Ingels Group, Gelephu Mindfulness City masterplan (https://big.dk/)
- Bhutan Broadcasting Service (https://www.bbs.bt/)
- Wikipedia, Gelephu Mindfulness City (https://en.wikipedia.org/wiki/Gelephu_Mindfulness_City)
