A company whose project matters to the Gelephu Mindfulness City can be taxed at a concessionary rate "of not less than 5%" instead of the standard 15%, for up to 20 years, if it is approved before the end of 2030. The Income Tax Act 2025 lets the designated officer of the Gelephu Mindfulness City Special Administrative Region (GMC) approve a company as a strategic and development company on that basis. Basnet Law prepares the application, builds the public-interest case and negotiates the letter of approval. This page explains what the concession is, what the designated officer can grant and how an application runs.
How we help
- Test whether your project can be presented as one the designated officer may find "expedient in the public interest" to approve.
- Define the specified trade or business that will become the qualifying business.
- Draft the written application in the prescribed form and particulars, with investment, employment and development commitments.
- Negotiate the concessionary rate, the commencement date and the relief period in the letter of approval.
- Advise on later amendments: change of business, rate substitution, date changes and extensions within the 20-year cap.
- Implement separate accounting for non-qualifying trades and compare the route with the founders company exemption.
How the strategic and development company concession works, in plain terms
The Income Tax Act 2025 provides that, despite its standard 15% rate, the designated officer may approve a company as a strategic and development company, subject to conditions prescribed by regulations or set by the designated officer, and provide that tax at a concessionary rate of not less than 5% is levied on income from a specified trade or business. Any company may apply in writing. Approval is discretionary, must be expedient in the public interest, may carry conditions, and is issued as a letter of approval.
The letter must specify the qualifying business, the concessionary rate, the date tax relief starts and the tax relief period. The designated officer may later amend the qualifying business, substitute a different rate of not less than 5%, move the start date, or extend the relief period, but the total relief period including extensions "must not in total exceed 20 years". The application window is fixed: "No company may be approved as a strategic and development company after 31 December 2030".
Income from the qualifying business is computed after capital allowances, whether or not they are claimed. Any other trade must be accounted for separately for the same accounting period and is taxed under the Act at the standard rate. The designated officer may revoke approval for contravention of the Act or of a condition, and the Comptroller may assess income that ought not to have been taxed at the concessionary rate or that follows an amendment or revocation. Conditions and the application form are left to regulations and the designated officer; we confirm current requirements at engagement.
Who this is for
- Capital-intensive investors in GMC's priority industries, including green energy, aviation and logistics, health, education and finance.
- Groups locating a regional headquarters or operating hub in GMC.
- Companies whose business already exists in GMC and so may not meet the founders industry test for the founders company exemption.
- Investors coordinating land, lease and regulatory clearances through the GMC Economic Development Group and wanting the tax terms settled at the same time.
How an engagement runs
- Eligibility and strategy memo: qualifying business definition, public-interest case, and comparison with the founders company exemption.
- Evidence pack: capital expenditure, headcount, technology and development contribution, timeline.
- Application drafting and submission to the designated officer; handling of information requests.
- Negotiation of rate, commencement date, relief period and conditions in the letter of approval.
- Post-approval compliance: separate accounts, condition tracking, amendment and extension applications, for the life of the relief.
Frequently asked questions
What rate can be granted?
Any concessionary rate of not less than 5% on income from the qualifying business. The exact rate is set in the letter of approval and may later be substituted with another rate of not less than 5%.
How long does the relief last?
The letter of approval fixes the tax relief period. With all extensions, it cannot exceed 20 years.
Is there an application deadline?
Yes. No company may be approved after 31 December 2030. Approvals granted before then can run for their full period, so we plan the application to be decided inside the window.
Does the concessionary rate apply to all our income?
No. It applies to income from the qualifying business specified in the letter. Other trades are accounted for separately and taxed at 15%.
Strategic and development company or founders company?
The founders company exemption (13Y) gives a full exemption for up to 15 years but requires a founders industry not yet carried on in GMC at adequate scale. The strategic and development company concession (43D) gives a rate of not less than 5% for up to 20 years and has no such industry test. We assess both on your facts.
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.
