Land in Gelephu Mindfulness City is made available to investors on lease, with the lease terms set site by site, and the tax, stamp duty and corporate consequences follow from a mix of GMC's own Acts and the applied statutes in Schedule A to the Application of Laws Act 2024. Basnet Law Pte. Ltd. is the first law firm incorporated in GMC. We advise on site identification, lease negotiation and the corporate, tax and registration steps that sit around a GMC site. This page explains how the land framework works and how we take an investor from requirements to a signed lease.
Our legal advisory
- Advise the investor on the EDG one-stop shop, which the GMC Authority describes as providing "land identification, lease guidance, company incorporation, regulatory clearances, coordination with government agencies, and investor aftercare".
- Negotiate and document the lease: term, renewal, permitted use, development obligations, assignment and security of tenure.
- Advise on structuring the leaseholder entity, including whether a foreign company registered under the Companies Act 2025, which the Act permits to hold immovable property, should hold the lease directly, or a GMC subsidiary.
- Advise on the tax treatment of lease costs and of vacancy costs under the Income Tax Act 2025.
- Plan for the 15% withholding on real property disposal proceeds paid to non-residents.
- Identify property tax and stamp duty exposure under the Property Tax Act 1960 and the Stamp Duties Act 1929, which apply in GMC through Schedule A to the Application of Laws Act 2024.
- Advise on construction, energy and workforce contracting on the site, including work passes for foreign staff.
How GMC land and lease law works, in plain terms
The GMC Authority (GMCA), established under Royal Charter No. 1 of 2024, is the highest decision-making body of the region and has corporate legal personality. Its powers under the Charter include the grant of licences and fiscal benefits. Land in GMC is made available on lease, and the lease terms are set for each site, and we confirm the current framework at engagement.
The Income Tax Act 2025 deals expressly with lease costs. It allows a deduction for expenditure incurred "for the purpose of obtaining a lease, or renewing or extending a lease, of an immovable property that is used by the person for the purpose of the person's trade or business". Qualifying expenditure means commission, legal fees, stamp duty, advertising expenses and other prescribed items. A landlord deriving rental income gets a matching deduction for the cost of granting a lease, and may deduct repair, insurance, maintenance and property tax during a vacancy where the Comptroller is satisfied that reasonable efforts were made to find a tenant.
On exit, any designated person paying consideration for a disposal of real property to a non-resident whose gain is chargeable to tax must "immediately deduct therefrom tax at the rate of 15% on every dollar of such payment", and must pay it to the Comptroller by the 15th day of the second month following. All "$" amounts are US dollars.
Two applied statutes govern property in GMC through Schedule A to the Application of Laws Act 2024, as amended from time to time and with modifications: the Property Tax Act 1960 and the Stamp Duties Act 1929. GMCA may amend Schedule A by order, so we check the current text before advising on rates or reliefs.
A foreign company registered under the Companies Act 2025 "has power to hold immovable property in GMC". Merely investing funds or holding property does not itself amount to carrying on business, but a foreign company that establishes a place of business must register before doing so.
Who this is for
- Manufacturers, agri-tech, energy and logistics investors in GMC's priority industries seeking a development site.
- Hospitality, wellness and education operators needing an operating lease.
- Data centre and digital asset infrastructure projects with power and land requirements.
- Developers and landlords who will derive rental income from GMC property.
How a legal advisory engagement runs
- Requirements brief: we define land area, use, utilities, timeline and the investor's corporate structure.
- EDG engagement: we advise on the investor's proposal, land identification and lease terms with EDG.
- Entity and registration: we advise on incorporating the leaseholder or registering the foreign company.
- Lease negotiation: we negotiate the lease and any development or performance obligations, and settle execution as a deed under the Companies Act 2025 where one is required, through to signing.
- Tax and compliance: we document the lease-cost deduction position and the stamp duty and property tax treatment, and advise on a compliance calendar for the site.
Frequently asked questions
Can a foreign investor own land in GMC?
Land in GMC is made available on lease. A registered foreign company has statutory power under the Companies Act 2025 to hold immovable property. We advise on the current tenure options at engagement.
Are legal fees on the lease tax deductible?
Yes, where the property is used for the trade or business. The Income Tax Act 2025 expressly includes commission, legal fees, stamp duty and advertising expenses within deductible lease-acquisition expenditure, and we document the claim.
Is stamp duty payable on a GMC lease?
The Stamp Duties Act 1929 applies in GMC through Schedule A to the Application of Laws Act 2024, with modifications. Rates and reliefs are as set in that Act as applied; we confirm the position for the specific instrument.
What happens on sale of a GMC property by a non-resident?
The payer must withhold 15% of the consideration and remit it to the Comptroller. The non-resident's actual liability is then settled through assessment, and we advise on both sides of that.
Who do we deal with for land?
The Economic Development Group, GMC's one-stop shop for investors. We advise on that engagement alongside incorporation and regulatory clearances.
Contact
Basnet Law Pte. Ltd. is the first law firm incorporated in the Gelephu Mindfulness City.
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
