Most people who ask us about moving to Gelephu Mindfulness City want to talk about tax. The more useful conversation starts somewhere else: the work pass. Under the Employment of Foreign Workforce Act 2025, no foreign employee may be employed in GMC without a valid work pass, and the person who commits the offence is usually the employer rather than the individual. Everything else about your relocation, including the resident director box your company needs to tick, hangs off that single document.
In short
- The work pass is the core legal instrument for any non-Bhutanese person working in GMC. Employing a foreign employee without one is an offence under the Employment of Foreign Workforce Act 2025.
- There is a separate pass route for self-employed foreigners. A foreigner must not be self-employed in GMC without a valid work pass.
- Categories of pass, quotas, criteria and the levy payable by employers are set by regulations and Gazette orders.
- Individuals who are not citizens of Bhutan pay 0% on chargeable income derived on or before 31 December 2030 under the Income Tax Act 2025. Bhutanese citizens resident in GMC pay a progressive scale topping out at 15%.
- Payroll is in United States dollars. Every "$" in the GMC statutes means US dollars.
- Every GMC company needs at least one director ordinarily resident in GMC, and a valid work visa or work pass is one way to satisfy that test.
- Programme-level residence schemes are administered by GMCA outside these Acts, and their terms are confirmed at the time of application.
The work pass is the document that matters
The Employment of Foreign Workforce Act 2025 came into operation on 26 December 2024. Its architecture is simple and strict. A Controller of Work Passes administers the system. An employer must not employ a foreign employee who does not hold a valid work pass, and where a foreigner is found at premises the occupier is presumed to have employed that person until the contrary is proved. A parallel duty on occupiers of work places, aimed at construction sites, forbids permitting a foreigner without a valid work pass to enter or remain.
Applications are made in the form the Controller determines, with the prescribed fee and whatever documents the Controller requires. The Controller may issue a pass with or without conditions, may refuse, and may first issue an in-principle approval subject to conditions. A pass can be varied, suspended, revoked or cancelled, and a person can be debarred from applying. Conditions can be imposed on the employer as well as on the employee.
One feature catches employers out. A work pass is valid only for the employer and employee named on it, and for the trade, sector, occupation or type of employment specified. It is not a general right to work in GMC. Changing employer or materially changing role is a new application, not an afterthought.
What the employer has to do, and keep doing
Three obligations sit on the employer throughout the life of the pass.
Keep a register. An employer must keep a register of foreign employees to whom work passes have been issued, in the form and with the particulars the Controller determines, open to inspection by an employment inspector at all reasonable times. This is not a spreadsheet you build after an inspection is announced.
Act on termination. Where the Controller suspends or revokes a pass and notifies the employer, the employer must terminate that employment within seven days. An employer intending to have a pass cancelled must apply to the Controller and, if required, return the pass within seven days. Financial penalties and fines attach to getting this wrong.
Pay the levy. The Act empowers the designated officer to impose, by order in the Gazette, a levy on employers in respect of foreign employees or classes of them, and on self-employed foreigners. The levy keeps running until the pass expires or is suspended, revoked or cancelled. Late payment attracts a daily penalty, capped in total at 30% of the outstanding levy, and the Controller may waive or refund in a proper case. The levy is recoverable as a debt.
The levy rates, the pass categories, the quotas and the criteria come from regulations made by the designated officer, which may prescribe categories of work passes, the period for which a pass may be issued or renewed, the criteria for issuance, and the conditions attaching to an in-principle approval or a pass.
Coming as a founder rather than an employee
The Act contemplates people who are not on anyone's payroll. A foreigner must not be self-employed in GMC unless he or she holds a valid work pass, and the offence carries a fine, imprisonment or both, with a mandatory custodial minimum on a second conviction. The levy applies to self-employed foreigners as well as to employers.
If you intend to be in Gelephu running your own business rather than being employed by your own GMC company, you still need a pass. The choice between employment and self-employed status is a structuring decision with consequences for the levy and for the resident director test below.
The resident director link
The Companies Act 2025 requires every company to have at least one director who is ordinarily resident in GMC. The Act defines that as being resident in GMC or holding a valid work visa or work pass. Where a company has only one member, that sole director may also be the sole member.
The Act gives the Registrar teeth. If a company breaches the requirement, the Registrar may direct the members to appoint a resident director, and members who default commit an offence. Worse, if a company carries on business for more than six months without a resident director, a member who knows that is the position becomes personally liable for the debts contracted during that period.
The Gelephu Corporate Registration Office has confirmed in its published FAQ that the earlier waiver of the resident director requirement ended on 30 April 2026, that companies must now comply, and that a resident director can be any company employee holding a valid employment pass issued by GMCA, or a Bhutanese citizen. So the work pass is not only a personal immigration matter. It is often the mechanism by which the company satisfies a corporate law obligation whose breach can pierce the limited liability the founders incorporated for.
Getting paid: dollars, banks and the minimum wage
The Employment Act 2025 governs the contract of service, the salary period, the timing of payment, deductions and statutory benefits. Salary must be paid in legal tender, with the Act expressly contemplating payment into an account with a bank licensed in GMC.
The currency point is a GMC-wide design choice. The Companies Act, the Employment Act, the Employment of Foreign Workforce Act, the Customs Act and the Income Tax Act each provide that references to "$" are to United States dollars. Payroll, levies, penalties and tax are all denominated in US dollars.
The Employment Act also contains a national minimum wage provision. Like the levy, the figure comes from subsidiary instruments.
Tax: the position in the statute
The Income Tax Act 2025 gives a clear answer for inbound staff. An individual who is not a citizen of Bhutan, whether resident in GMC or not, is charged at 0% on chargeable income derived on or before 31 December 2030. A Bhutanese citizen not resident in GMC is treated the same way. A Bhutanese citizen resident in GMC is taxed on a progressive scale beginning with a nil band and rising to 15% above the top threshold.
Two points matter. The first is the date: the relief runs to the end of 2030 and is written into the statute. Anyone modelling a ten-year relocation should model 2031 as well. The second is that the company you work for is a separate taxpayer, with a company rate of 15% on chargeable income and reliefs available by approval for specified classes of company and specified periods.
There is also an exit formality that surprises employers. The Employment Act provides that no payment of salary or other sum due on termination of service may be made without the permission of the relevant tax officer, and that the employer must immediately notify that officer of the termination, with payment not delayed more than 30 days after that notice is received. An income tax clearance step therefore sits between the last day of work and the final payslip. Build it into your offboarding timetable.
Life on the ground
Basnet Law is on the ground in Gelephu. GMC is a Special Administrative Region of approximately 4,046 square kilometres in southern Bhutan, on the Indian border, with a masterplan by Bjarke Ingels Group organised around eleven mandala-inspired neighbourhoods. Gelephu International Airport is being built out, with a first phase sized at roughly 1.3 million passengers a year.
Two further points. Programme-level residence and investor schemes are administered by GMCA outside the Acts discussed here, and their terms, eligibility and cost are confirmed at the time of application. And GMC is autonomous, not detached: anyone travelling outside GMC into the rest of Bhutan is subject to Bhutan's own immigration, tariff and tourism rules, a separate system from the GMC work pass.
The appeal route
The appeal route against work pass decisions runs to the designated officer, whose decision is final, with judicial review excluded except on procedural compliance, so treat the first application as the main chance to make your case.
Frequently asked questions
How much is the foreign workforce levy in GMC?
The designated officer sets the amount by order in the Gazette, and it can differ between classes of foreign employee. Confirm the current order before modelling headcount costs.
Can I use my work pass to satisfy the resident director requirement?
Yes in principle. The Companies Act treats a director as ordinarily resident in GMC if he or she is resident in GMC or holds a valid work visa or work pass, and the Gelephu Corporate Registration Office has confirmed that an employee holding a valid employment pass can serve as resident director.
Is income really tax free for foreigners in GMC?
Individuals who are not citizens of Bhutan are charged at 0% on chargeable income derived on or before 31 December 2030. That is a statutory relief with an end date, and the company that employs you is a separate taxpayer at the company rate of 15%.
What happens to my final salary when I leave?
Your employer cannot pay it without tax clearance. The Employment Act requires the employer to notify the relevant tax officer of the termination immediately and prohibits payment without permission, with payment not delayed more than 30 days after that notice is received.
The bottom line
Relocating to Gelephu is a work pass problem before it is a tax problem. The Employment of Foreign Workforce Act 2025 puts the compliance burden on the employer, ties the pass to one employer and one role, requires a register and a seven day reaction to termination, and sets the levy and the categories by subsidiary instruments. The tax position for non-citizens is attractive and written into statute, running to 31 December 2030. Get the pass architecture right first, because the company's resident director obligation, and with it the members' protection from personal liability, depends on it.
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: Employment of Foreign Workforce Act 2025 (Law No. 4 of 2025), ss. 3, 5, 6, 6A, 7, 8, 9, 10, 11, 12, 13, 29; Employment Act 2025 (Law No. 3 of 2025), ss. 20, 21, 21A, 22, 23, 24, 25, 63; Companies Act 2025 (Law No. 1 of 2025), ss. 4A, 142, 145(1), 145(1A), 145(7)-(10), 171; Income Tax Act 2025 (Law No. 6 of 2025), ss. 2AA, 42, 43(1)(a), 43(1)(b), 43(1)(ba), 62A, Second Schedule Part A Table 3; Application of Laws Act 2024 (Law No. 1 of 2024), Schedule A item 8; Royal Charter No. 1 of 2024
- GCRO FAQ for GMCA Entities, version 0.2, 3 June 2026
