The decisions that fix a founder's tax position in the Gelephu Mindfulness City are mostly taken before the founder arrives: where the company will be managed, which entity holds which assets, whether a trust is settled before a statutory cut-off, and whether an incentive application is lodged before the window closes. Basnet Law Pte. Ltd., the first law firm incorporated in the Gelephu Mindfulness City, advises relocating founders and their families on the Income Tax Act 2025 and the Employment of Foreign Workforce Act 2025 before they move. This page explains what the law settles and how we sequence a relocation.
How we help
- Mapping the founder's personal position: citizenship, days in GMC, home-country residence and the income that falls within the 0% rate.
- Deciding where control and management of each company will sit, so that GMC residence is earned rather than assumed.
- Structuring the holding company around the share disposal and dividend exemptions, with the substance the foreign-asset rule requires.
- Assessing and lodging founders company or strategic and development company applications before 31 December 2030.
- Settling trusts and family holding vehicles with the 1 January 2028 cut-off in view.
- Sequencing the work pass, resident director role, GMC bank account and payroll.
How pre-arrival tax planning works in GMC, in plain terms
Every individual who is not a citizen of Bhutan, whether resident in GMC or not, pays tax at 0% on chargeable income derived on or before 31 December 2030. There is no approval, no industry test and no cap, but the date attaches to the income, not to the person. Tax residence for an individual is a separate test, met by residing in GMC or by presence or employment there for 183 days or more in the preceding year. Dividends paid by a GMC-resident company are exempt in the recipient's hands, and the Act charges income rather than capital, so there is no capital gains tax as such. None of this shields a founder from the tax law of a country that still treats them as resident.
A company pays 15% on chargeable income and is resident in GMC only where the control and management of its business is exercised there, which means board decisions taken in Gelephu and minuted, not a registered office on paper. A holding company's gains on disposing of shares are exempt where it has held at least 20% of the investee, legally and beneficially, for a continuous 24 months, with exclusions for unlisted property companies; outside that safe harbour the income-or-capital question is one of fact. The Act includes a rule taxing certain foreign-asset gains of multinational groups, and a holding company established now should meet its substance conditions. The two incentives are discretionary approvals by the designated officer: a founders company exemption for up to 15 years where the industry is not carried on in GMC on an adequate scale, and a strategic and development company rate of not less than 5% for up to 20 years. Neither can be granted after 31 December 2030.
Family structures need the statutory conditions read first. The family-owned investment holding company exemption defines related shareholders by regulations, and a single failure to meet the definition ends it permanently. The foreign trust, philanthropic purpose trust and locally-administered trust exemptions each require a trustee company in GMC, and each excludes trusts constituted or companies incorporated on or after 1 January 2028, so a trust intended to use them must exist before then. Trusts are recognised under the received law of equity, and a trustee outside those exemptions pays 15% subject to the Comptroller's determination on a beneficiary's share.
Immigration and payroll close the loop. A foreigner may not work in GMC as an employee or as a self-employed person without a work pass, and any investor residence programme is administrative rather than statutory. Pass categories, criteria, fees and any levy sit in regulations and Gazette orders. A valid work pass makes the founder ordinarily resident for the purposes of being their own company's resident director. Remuneration paid to a director not resident in GMC is withheld at 15% even where the director's own rate is 0%, with the excess recoverable by refund claim. No final payment may be made on departure without tax clearance.
Who this is for
- Founders and executives relocating to Gelephu under a work pass.
- Principals establishing a holding company, family office or trust with a GMC base.
- Entrepreneurs bringing a business that may qualify for a founders company or strategic and development company approval.
- Families with members of mixed citizenship and residence.
How an engagement runs
- Personal map. We record citizenship, residence history, expected days in GMC and every income source, and identify what falls inside the 0% window.
- Structure paper. We decide which entities hold which assets, where each is managed and whether a trust should be constituted now.
- Applications. We prepare any founders company or strategic and development company application and confirm the prescribed form before filing.
- Arrival sequence. We coordinate incorporation, the work pass, the resident director appointment, the bank account and payroll.
- Ongoing. We diarise the 2028 and 2030 dates and manage withholding, returns and any departure clearance.
Frequently asked questions
Do I pay income tax if I live in GMC?
If you are not a citizen of Bhutan, the rate on chargeable income derived on or before 31 December 2030 is 0%, resident or not.
Does incorporating in GMC make my company GMC-resident?
No. A company is resident where control and management of its business is exercised. If the board decides strategy abroad, the company is exposed to the argument that it is not resident. We set up real board meetings in GMC and minute them.
Should I settle a trust before I move?
If the foreign, philanthropic or locally-administered trust exemptions are the goal, the trust must be constituted before 1 January 2028. The exempt income is the income the regulations prescribe.
Is there a residence visa for investors?
A relocating founder holds a work pass as an employee of their GMC company or as a self-employed foreigner, in whatever category the regulations prescribe; any investor programme is administrative.
Talk to GMC counsel on the ground
Basnet Law Pte. Ltd. is the first law firm incorporated in the Gelephu Mindfulness City. A short conversation early in a matter usually saves time and cost later. Write to basnet@basnetgmc.com or office@basnetgmc.com with a few lines about your plans, and we will tell you plainly what is needed, how long it takes, and whether we are the right fit.
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
