Tax is the reason most groups look at the Gelephu Mindfulness City in the first place: a 15% corporate rate, 0% for non-citizen individuals until the end of 2030, and a full exemption or a rate as low as 5% for approved companies. The incentive approvals have a hard cut-off. Basnet Law Pte. Ltd. advises companies, funds and individuals on the Income Tax Act 2025, including the incentive applications whose approval windows close on 31 December 2030. This page sets out what the Act says and how we work on it.
How we help
- Structuring for the 15% corporate rate and the 0% rate for non-citizen individuals to 31 December 2030.
- Founders company applications for exemption of income from a founders industry.
- Strategic and development company applications for a concessionary rate "of not less than 5%".
- Holding-company planning around the share disposal exemption.
- Withholding tax on interest, royalties and management fees, non-resident directors' remuneration and real property disposals.
- Transfer pricing and the general anti-avoidance rule.
- Double taxation relief, the redomiciliation provisions and group relief.
How GMC tax law works, in plain terms
The Income Tax Act 2025 has applied in GMC since 26 December 2024. It re-enacts, with amendments, the Income Tax Act 1947 that GMC first adopted through the Application of Laws Act 2024. Every reference to the dollar means the United States dollar, and tax computations must be prepared in US dollars unless the Act's limited exception applies.
The rates are short. Every company or body of persons pays "tax at the rate of 15% on every dollar of the chargeable income". Every individual who is not a citizen of Bhutan, "whether resident in GMC or not", pays 0% on chargeable income derived on or before 31 December 2030. Bhutanese citizens resident in GMC pay on the progressive scale in the Second Schedule, which starts at nil on the first $10,000.
Two incentives carry deadlines. An approved founders company is exempt on income from a qualifying business in a founders industry, meaning an industry not carried on in GMC on an adequate scale and with favourable prospects. No company can be approved after 31 December 2030, and the exemption period is capped at 15 years. A strategic and development company may instead be approved for a concessionary rate of not less than 5%, again with no approval after 31 December 2030.
The Act also provides an advance rulings regime, the fund exemptions, the family-owned investment holding company exemption and the Finance and Treasury Centre rate.
Who this is for
- International groups choosing GMC as a holding, treasury or operating base.
- Founders whose business may qualify as a founders industry.
- Fund managers and family offices planning for the fund and family-owned investment holding company exemptions.
- CFOs building withholding, transfer pricing and USD reporting processes.
How an engagement runs
- Fact-finding. We map your income flows, entities and counterparties.
- Statutory analysis. We apply the Act's charging and exemption provisions to characterise each income stream and test each exemption or concession.
- Incentive applications. We prepare the written application to the designated officer for founders company or strategic and development company status and deal with queries until the letter of approval issues.
- Compliance design. We set up withholding, transfer pricing documentation and returns in US dollars from your first period.
- Ongoing advice. We monitor incentive regulations and Gazette notices and tell you when a change affects your position.
Frequently asked questions
What is the corporate tax rate in GMC?
15% on every dollar of chargeable income for companies and bodies of persons, and the same rate for non-resident persons other than individuals, trustees and executors. We model it against your group's actual income flows before you commit to a structure.
Is personal income tax really 0%?
For an individual who is not a citizen of Bhutan, yes, on chargeable income derived on or before 31 December 2030. Bhutanese citizens who are not resident in GMC benefit to the same date. Filing obligations still apply, and we handle them.
Does GMC tax capital gains on shares?
The Act exempts gains derived by a company from the disposal of ordinary or preference shares where the company's ownership period and percentage conditions are met. We check those conditions against your holding before any sale.
Can I get an advance ruling before investing?
Yes. The Act and its Seventh Schedule provide for advance rulings by the Comptroller. We prepare the application and give you a written opinion alongside it.
What must I withhold on payments abroad?
Interest paid to a person not known to be resident in GMC is subject to deduction at 15%. The same mechanism applies to royalties, management fees and know-how payments that the Act deems to be GMC-sourced, and non-resident directors' remuneration is caught as well. We build the withholding step into your payment process.
Does GMC have transfer pricing rules?
Yes. The Act allows an adjustment where related-party conditions differ from arm's length conditions, a surcharge applies to the adjustment, and a company, firm or trust with gross revenue above $10 million must keep transfer pricing documentation. We prepare that documentation with you.
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.
