Raising money in the Gelephu Mindfulness City engages two separate controls: the rules on offering securities and fund units, and the restriction on promoting any investment activity. A firm can be entitled to issue its own shares and still breach the Financial Services Act 2025 by the way it advertises them. Basnet Law Pte. Ltd., the first law firm incorporated in the Gelephu Mindfulness City, advises issuers, sponsors and licensed firms on offers and financial promotions under the Financial Services Act 2025. This page explains how the offer and promotion rules work and how we advise on a compliant raise.
Our legal advisory
- Classifying what is being offered: a security, a fund unit, a virtual asset or a fiat-referenced token.
- Planning the offer route for securities, whether an Approved Prospectus or an exempt offer as prescribed in GFSO's Rules.
- Advising on structuring fund raises around registration for Public Funds or the pre-offer notification for Exempt and Qualified Investor Funds.
- Mapping every communication to a gateway: the firm's own licence, approval of the content by a Licensed Firm, or a specific exemption.
- Advising on building the audience controls that professional-only and outside-GMC exemptions require.
- Reviewing decks, whitepapers, websites and campaigns against the misleading statement and misconduct prohibitions.
How offer and promotion law works in GMC, in plain terms
The Financial Services Act 2025 controls marketing separately from licensing. No person may, in the course of business, communicate an invitation or inducement to engage in investment activity unless the communicator is a Licensed Firm or Exempt Firm, the content has been approved by one, or the communication falls within a statutory exemption. Causing a communication to be made counts as communicating it. A communication originating outside GMC is caught if it is capable of having an effect in GMC, which a generally accessible landing page is; one originating in GMC is caught without any territorial qualification, so marketing from GMC to overseas investors also needs a gateway.
The exemptions are precise and there are 33 of them. The one most raises rely on covers communications made only to, or directed only at, Licensed Firms, Licensed Bodies or persons outside GMC, provided a directed communication carries a clear indication of its audience, is not accessible from material aimed at a wider audience and is backed by proper systems to stop others engaging. Others cover one-off communications, generic promotions that name no provider, unpaid introductions, communications to existing members and creditors, group communications, employee share schemes and material in a GFSO-approved prospectus. Most are unavailable for unsolicited real-time contact. An agreement entered into as a result of an unlawful communication is unenforceable against the customer, who may recover money and compensation, and the communicator faces censure, financial penalties and, for a licensed firm, suspension.
Offers of securities carry their own rule. An offer of securities in GMC requires a prospectus approved by GFSO unless it is an exempt offer as prescribed in the Rules. The Act sets no investor-count or minimum-subscription thresholds itself, so whether a private placement to professional investors avoids a prospectus depends on GFSO's Rules. A prospectus must contain all the information an investor would reasonably require, and the persons responsible must compensate investors for loss caused by an untrue or misleading statement. Issuing your own shares or debentures is excluded from dealing, but that does not touch the prospectus rule or the promotion restriction. Fund units are different: the prospectus regime does not apply to an offer of a unit unless units are to be admitted to trading, but a Public Fund must be registered first, the manager of an Exempt or Qualified Investor Fund must notify GFSO at least 14 days before the first offer, and GFSO may issue a stop order against an offer of units.
Token offerings follow from the classification of the token. A token conferring the rights of a share, a debt instrument or a fund unit is offered under the rules above; a token that is none of those may be a virtual asset, whose promotion is still a financial promotion. Whatever the route, a statement known or recklessly to be false or misleading, made to induce someone to acquire or dispose of an investment or accepted virtual asset, is a contravention, and misleading, deceptive, fraudulent or dishonest conduct in or from GMC is prohibited. Every key business document of a Licensed Firm, including websites, must state that the firm is regulated by the GMC Gelephu Financial Services Office.
Who this is for
- Start-ups and growth companies raising equity or debt from investors inside or outside GMC.
- Fund sponsors marketing a first close of a GMC or foreign fund.
- Token issuers preparing a whitepaper, launch site or exchange listing campaign.
- Foreign managers and platforms whose websites and newsletters can reach GMC residents.
How a legal advisory engagement runs
- Classification. We settle what is being offered and to whom, and which offer rules apply.
- Route selection. We advise on the offer route and the promotion gateway for each channel and on any Rules-based exemption criteria.
- Controls. We advise on the audience indications, access restrictions and record-keeping the chosen exemptions require.
- Content clearance. We review every document and campaign against the misleading statement and misconduct prohibitions and add the required status disclosures.
- Launch and records. We advise on any registration or notification and on the approval records that support a reasonable-belief defence and clear follow-up communications.
Frequently asked questions
Can a GMC start-up promote its own share offering to investors?
Issuing its own shares is excluded from dealing, but promoting the offer is still a financial promotion. Exemptions may cover existing members and creditors, group companies, employee share schemes or an approved prospectus; wider marketing needs a Licensed Firm's approval or its own exemption.
Can I do a private placement to professional investors without a prospectus?
Only if it is an exempt offer under GFSO's Rules. The Act disapplies the prospectus requirement for prescribed exempt offers but sets no thresholds of its own, so we confirm the current criteria before launch rather than assume a carve-out from another jurisdiction applies.
Does a foreign fund's website breach GMC law if GMC residents can read it?
A communication from outside GMC is caught if it is capable of having an effect in GMC, and a generally accessible site is. The usual answer is to direct the site only at persons outside GMC or Licensed Firms, say so clearly and run systems that stop others engaging.
Is a paid referral to a licensed firm a financial promotion?
Yes. The introduction exemption applies only where the introducer receives no reward from anyone other than the recipient, so a paid referral arrangement needs another gateway, usually approval of the introducer's material by the Licensed Firm.
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.
