Aviation and Logistics is the Gelephu Mindfulness City pillar built around Gelephu International Airport, which has a first phase capacity of about 1.3 million passengers a year. Alongside it sit the border position adjacent to Assam, the Customs Act 2025 with its free trade zone and warehousing regime, and a clear policy intention, so forwarding, bonded warehousing, maintenance and ground handling are investable now. Basnet Law Pte. Ltd., the first law firm incorporated in the Gelephu Mindfulness City, advises airlines, forwarders, warehouse operators, lessors and financiers under the Customs Act 2025, the Income Tax Act 2025 and the Companies Act 2025. This page explains what the framework provides and how we position an operator.
Our legal advisory
- Framing the expression of interest to the Aviation and Logistics pillar, the first gate in registration.
- Choosing between a GMC company and a branch, so an operator can position early with the entity that fits its stage.
- Advising on structuring operations around customs airports, customs stations and free trade zones, which sit outside the customs territory.
- Warehouse, manufacturing and duty-free licence applications, customs rulings and drawback claims.
- Tax advice for non-resident carriers whose profits from passengers and cargo loaded in GMC are treated as accruing in GMC.
- Strategic and development company applications for a rate of not less than 5%, before the 31 December 2030 cut-off.
- Carriage, forwarding, handling and warehousing contracts under GMC law, and aviation and transport insurance placement through a licensed firm.
What the GMC framework provides for aviation and logistics
GMC lists Aviation and Logistics among its eight priority industries, and the Royal Charter gives the Authority powers that include customs and tariff benefits, licences and free trade agreements. The pillar is governed by the Customs Act 2025, Bhutan's customs and sales tax laws applied through Schedule C to the Application of Laws Act 2024, and the general rules.
The Customs Act 2025 defines the customs territory as GMC excluding any free trade zone, so goods that remain inside a zone are outside the customs territory for duty purposes and can be stored, processed and re-exported without duty. Import and export by air may take place only at customs airports, by rail only at customs stations, and by road subject to the Director-General's approved conditions. Dutiable goods arriving by air or road go first into a zone unless exempted. Carriers must lodge an inward manifest within 24 hours of arrival and an outward manifest within 48 hours of departure, every declaration must give a full and true account, and the Act provides for licensed warehouses, manufacturing and duty-free licences, customs rulings, and drawback on re-export within six months and on manufactured exports within twelve. Duty rates are prescribed by Gazette order.
For carriers, the Income Tax Act 2025 deems a non-resident's full profits from the carriage of passengers, mail, livestock or goods loaded into an aircraft in GMC to accrue in GMC where its aircraft calls there, except cargo brought solely for transhipment or transfer. A non-resident air transport business is assessed as if it were a non-resident shipowner, using the certificate-based method, unless a double taxation arrangement provides otherwise.
Establishment otherwise follows the general rules. A branch of a foreign company needs a resident authorised representative to accept service; a GMC company needs a registered office and a director ordinarily resident in GMC, with an empanelled corporate service provider mandatory since 1 November 2025. Premises are made available on lease. The company rate is 15%; the strategic and development company concession, a rate of not less than 5% for up to 20 years including extensions, is the route for large logistics assets, on application before the 31 December 2030 cut-off. Marine, aviation and transport insurance is a class of insurance under the Financial Services Act 2025 and requires a licensed insurer or intermediary.
Who this is for
- Airlines and charter operators planning services to Gelephu.
- Freight forwarders, customs brokers and logistics providers.
- Bonded warehouse, free trade zone and maintenance and repair operators.
- Lessors and lenders financing aircraft and logistics assets.
How a legal advisory engagement runs
- Operating model. We work out where goods and aircraft will enter, which zone or warehouse applies and which licences the model needs.
- Entity. We advise on the legal requirements for a branch or GMC company sized to the operating model.
- Customs licensing. We advise on warehouse, manufacturing or duty-free licences and any customs ruling, and on the legal requirements for declaration and manifest procedures.
- Tax structuring. We assess the carrier's deemed-profit exposure and the strategic and development company case and advise on any application before the 2030 cut-off.
- Contracts and finance. We draft carriage, handling and finance documents and advise on transport insurance and the security registration requirements.
Frequently asked questions
Does a foreign airline pay GMC tax on flights to Gelephu?
Profits from passengers, mail, livestock or goods loaded in GMC are deemed under the Income Tax Act 2025 to accrue in GMC and are assessed under the shipowner method unless a double taxation arrangement provides otherwise. Transhipment cargo is excluded from the regime.
Where are GMC's customs airports and free trade zones?
The Customs Act 2025 provides for customs airports, customs stations and free trade zones, designated by the Authority. We confirm the current designations with the Authority for each operating model.
How are customs duty rates set?
Rates are set by the designated officer by Gazette order, exemptions may be granted by order or individual direction, and Bhutan's customs and sales tax laws also apply through Schedule C. We confirm the rate for each tariff line.
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.
