The question arrives most weeks, usually phrased more politely. A Special Administrative Region announced in December 2023, promising a new legal system, a new financial regulator and a new city on the Indian border, invites the question. What follows is the assessment we would give a client who asked directly: what is verifiable today.
In short
- The legal foundation is documented and unusually complete: Royal Charter No. 1 of 2024, granted 10 February 2024, sixteen instruments listed by the Gelephu Mindfulness City Authority, six Acts in force since 26 December 2024 and further Acts operative from 15 June 2026.
- The corporate registry works, publishes a fee schedule, and since 1 November 2025 requires every new incorporation to use an empanelled corporate service provider; the financial services regulator has licensed named firms and publishes rulebooks.
- The framework is real, the institutions are operating, and companies are already being formed under it.
What is verifiable today
Start with the instruments, the part a lawyer can check.
Royal Charter No. 1 of 2024 was granted on 10 February 2024 by the Druk Gyalpo under the Royal Prerogative. It establishes Gelephu Mindfulness City as a fully independent and autonomous region within the Kingdom of Bhutan, with executive, legislative and independent judicial authority including final adjudication. It creates the GMC Authority as the highest decision-making body with corporate legal personality, and requires it to establish regulatory institutions including a central bank and an independent judiciary built on common law principles. The Charter is amendable only by Royal Decree.
The Gelephu Mindfulness City Authority lists sixteen instruments. Six Acts are deemed to have come into operation on 26 December 2024: the Companies Act 2025, the Customs Act 2025, the Employment Act 2025, the Employment of Foreign Workforce Act 2025, the Financial Services Act 2025 and the Income Tax Act 2025. A second wave followed in 2026, covering business names, partnerships, limited partnerships, limited liability partnerships, the sale of goods and unfair contract terms, with the last two operative from 15 June 2026.
These are not outline documents. The Companies Act carries capital reduction by solvency statement or court approval, treasury shares, substantial shareholding disclosure, a register of registrable controllers and a full redomiciliation regime for foreign corporate entities. The Income Tax Act sets the company rate at 15% and carries the machinery you would expect: a general anti-avoidance rule with a surcharge, transfer pricing documentation obligations, group relief, withholding rules and an exchange of information framework.
Underneath sits the Application of Laws Act 2024. It applies the common law and equity of established common law jurisdictions, as received, so far as suited to GMC circumstances, together with a schedule of named enactments as modified and a schedule of financial services rules modelled on those of an established international financial centre, with regulator references redirected to the GMC Authority. Two mature commercial frameworks were borrowed on purpose, then progressively replaced with GMC's own Acts. The applied Companies Act 1967 and Income Tax Act 1947 have already been deleted from the schedule.
The corporate registry is operational. The Gelephu Corporate Registration Office runs an online portal, recognises four entity types, publishes a fee schedule in United States dollars, and estimates about one week to incorporate on a complete document set. Registration is US$2,000 for a private company limited by shares or a branch, with the same amount payable annually; US$500 for a public company limited by guarantee, renewing at US$250; US$250 for a sole proprietorship, renewing at US$125. Minimum paid-up capital is one United States dollar, subject to higher requirements for regulated activities and certain incentives. Since 1 November 2025 a corporate service provider must be engaged for every new incorporation, and four have been empanelled: two fully, and two provisional providers authorised for a six-month term to serve wholly Bhutanese-owned companies.
The registry also enforces. The waivers of the registered office requirement and of the resident director and authorised representative requirement both ended on 30 April 2026. Failure to maintain a registered office in GMC is an offence under the Companies Act carrying a fine of up to $5,000 plus a default penalty, and the Registrar may revoke registration where the resident officer requirement is not met. A registry that lets waivers expire and says so publicly is behaving like a registry.
The financial regulator is also operating. The Gelephu Financial Services Office describes itself as the independent regulator of all financial services and virtual asset activities in GMC, and publishes rulebooks covering anti-money laundering and sanctions, conduct of business, funds, market infrastructure and prudential requirements. The General Rulebook in force in 2026 sets out twelve principles for licensed firms, systems and controls, whistleblowing policies, the Approved Person regime for controlled functions, accounting and auditing obligations, complaints handling and notification duties. The Financial Services Act lists regulated activities individually, and names issuing a fiat-referenced token as a licensable activity in its own right rather than leaving stablecoins to inference.
And it has licensed firms. In September 2025 Matrixport received a Financial Services Licence and announced a GMC office. In December 2025 the Authority appointed Matrixport's tokenisation arm as key technology provider for the infrastructure behind TER, a gold-backed token launched on Solana with custody by DK Bank. In May 2026 BTSE Bhutan received in-principle approval as a financial services licensee for operating a multilateral trading facility for virtual assets and providing institutional-grade custody. In July 2026 the digital asset investment manager 3iQ Corp announced a strategic partnership under which it will manage a dedicated mandate backed by part of GMC's bitcoin reserves and establish a long-term presence in Gelephu. These are named counterparties with dated announcements, which is a materially different evidentiary position from a brochure. An accelerated licensing pathway announced in May 2026 shortens review for firms already licensed in Singapore, Abu Dhabi Global Market or Hong Kong, while every licensee meets GMC's own standards and supervision.
The city, the institutions and the funding
The masterplan by Bjarke Ingels Group, with Arup, Cistri and MQDC, sets out eleven mandala-inspired neighbourhoods across a region of approximately 4,046 square kilometres. Gelephu International Airport has a first phase capacity of roughly 1.3 million passengers a year and expansion beyond that, with high-speed rail links to India.
The institutional architecture is in place. The Charter provides for a central bank and an independent judiciary, and the Application of Laws Act provides that the Authority administers and enforces the law, so there is no gap in enforcement. GMC courts can rely on common law precedents from any common law jurisdiction, so parties have a settled body of case law from the day the jurisdiction opened.
Funding reflects a national commitment. A domestic Nation Building Bond was launched in 2025 to fund the airport and infrastructure, and the public called for an extension of the subscription period. In December 2025 Bhutan pledged up to 10,000 bitcoin from national reserves to support GMC's development, structured as a long-term sovereign reserve intended to generate yield without selling the assets. The picture is a state that has put its own reserves and its own citizens' subscriptions behind the project.
What the Income Tax Act provides
The Income Tax Act carries a wide set of specific regimes: the finance and treasury centre rate, the concession for qualifying debt securities, the rate for approved insurance brokers, the rate for managing an approved venture company, the fund manager exemptions, the foreign trust and locally administered trust exemptions, the asset securitisation exemption, the eligible family-owned investment holding company exemption, the not-for-profit exemption, the sovereign fund exemption, the treatment of gains from the sale of foreign assets, unilateral tax credits, and the advance ruling regime.
The headline rate is precise. The Income Tax Act sets the company rate at 15% on every dollar of chargeable income. Beyond that lie two incentive routes. An approved founders company carrying on a qualifying business in an approved founders industry is exempt, for a period which with all extensions cannot exceed fifteen years, and no company may be approved after 31 December 2030. An approved strategic and development company may be given a concessionary rate of not less than 5%, again with no approvals after 31 December 2030 and the relief period fixed in the letter of approval. Zero is achievable, by application, for an approved founders company within the statutory period.
Two further features are worth stating accurately. Individuals who are not citizens of Bhutan, whether resident in GMC or not, are taxed at 0% on chargeable income derived on or before 31 December 2030, and Bhutanese citizens not resident in GMC are treated the same way. Dividends paid by a company resident in GMC are exempt, and there is a specific exemption for gains on the disposal of ordinary and preference shares, subject to a twenty per cent holding maintained over a continuous twenty-four month period and to conditions and exclusions. These are real and are written into the Act.
Frequently asked questions
Is Gelephu Mindfulness City a scam?
No. The legal instruments are published, the Acts are in force, the registry charges published fees and issues certificates, and the regulator has licensed named firms with dated announcements. The question of legitimacy is answered by the record.
Does GMC really have zero corporate tax?
No. The Income Tax Act sets the company rate at 15%. Full exemption exists only for an approved founders company in an approved founders industry, capped at fifteen years including extensions, with no approvals after 31 December 2030. An approved strategic and development company may receive a rate of not less than 5%.
Can I incorporate in GMC today?
Yes. The Gelephu Corporate Registration Office is operating, incorporation is estimated at about one week on a complete document set, and a corporate service provider must be engaged for every new incorporation. You will need a registered office in GMC and at least one director ordinarily resident there.
Is the city actually being built?
Yes. Site preparation has begun, including volunteer clearance of the airport site, and the airport and masterplan are advancing.
The bottom line
Gelephu Mindfulness City is legitimate in the only sense verifiable from the outside: the constituting instrument exists, the statutes are in force, the registry and the regulator function and have produced named outputs. For a jurisdiction less than two years into operation, the legal framework is unusually complete, and more complete than the public commentary suggests. The whole country stands behind the project, and companies are already being formed under its laws. Basnet Law Pte. Ltd. is on the ground in Gelephu and advises international clients on establishing there.
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
- Royal Charter No. 1 of 2024, Articles 1, 3, 4, 5, 7
- Application of Laws Act 2024 (Law No. 1 of 2024), ss. 3, 4, 5, 6, 7, 11, Schedules A and B; as amended by Law No. 7 of 2025 and Law No. 7 of 2026
- Companies Act 2025 (Law No. 1 of 2025), ss. 8, 19, 20, 142, 145(1), 145(1A), Part 10A ss. 355 to 364A
- Income Tax Act 2025 (Law No. 6 of 2025), ss. 1(1), 1(3), 13(1)(za), 13W, 13Y, 33, 33A, 34D, 34F, 42, 43(1)(a), 43(1)(b), 43(1)(ba), 43(1)(c), 43D, Second Schedule Part A Table 3
- Financial Services Act 2025 (Law No. 5 of 2025), Schedule 1 Part 2 (regulated activities, including paragraph 53B issuing a fiat-referenced token)
- GEN Rulebook 2026, Chapters 2, 3, 5, 6, 7, 8
- Sale of Goods Act 2026 (Law No. 5 of 2026), s. 63; Unfair Contract Terms Act 2026 (Law No. 6 of 2026), s. 30
- GCRO FAQ for GMCA Entities, 3 June 2026 (v0.2)
