Business in Bhutan

The Corporate Regulatory Authority (CRA) registers individuals and businesses engaged in formal business activity. Incorporation or registration takes place through a certified Filing Agent or a certified Company Secretary under the Company Act of Bhutan 2016. The available legal forms include Sole Proprietorship, Partnership and Company. Official procedures also cover organizations, agencies, cooperatives and groups; according to the IBLS handbook, cooperatives and groups do not require registration with DAMC. A private Company requires at least two directors, a CEO, and at least two but no more than 49 shareholders. A public Company requires at least three directors, a CEO and at least two shareholders; there is no maximum number of shareholders. A CEO may not simultaneously be the CEO of another Company. For a new business activity by Bhutanese applicants, the procedure typically includes an Authorization Form and the identity, contact, photograph, signature and address details of directors, the CEO and witnesses. Converting an existing sole proprietorship or partnership additionally requires, among other things, a Tax Clearance Certificate, financial or interim financial statements, an asset list, bank-account and name details, and valid licenses. The CRA states a fee of Nu. 2,000 for name approval and a registration fee of either Nu. 5,000 or Nu. 7,000 depending on the procedure; the applicable fee type must be checked for the specific application. The reviewed guidance does not set a general processing period for CRA registrations. The Business License or Business Certificate is applied for, renewed, amended or terminated through the online business-licensing service (IBLS). Since 3 June 2026, these applications have been processed online; G2C has been discontinued for this purpose, and paper or manual procedures are excluded. The license fee depends on the specific activity. Depending on the sector, additional environmental, sectoral or other approvals may be required. Responsibility for the relevant Revenue and Regional Customs Office (RRCO) depends, among other things, on the district (Dzongkhag). For tax matters, the business registers with the Department of Revenue and Customs and receives a tax registration number (TPN). Tax returns for BIT or CIT are generally filed between 1 January and 31 March. The filing obligation does not depend solely on whether the business actually operated during the relevant period. Late filing costs Nu. 100 per day and may additionally incur interest of 24 percent per year. The former income-tax exemption for small and micro businesses in rural areas ended on 31 December 2024; a tax liability may therefore arise from Income Year 2025 onward. The Goods and Services Tax (GST) is normally 5 percent. Registered businesses must charge GST, issue a proper tax invoice containing the TPN, address and other required information, keep records, file GST returns and remit the net amount. The GST return must be filed within 30 days after the end of the relevant tax period. Exports may be taxed at 0 percent and may allow an input-tax credit; exemptions depend on the specific activity or goods. Businesses must file an Annual Return, Directors Report and audited financial statements each year. The deadline is stated as 31 May for listed Companies and 31 July for unlisted and private Companies. Late or missing filings may result in fees based on the number of directors, the violation and the year. After three years without proper compliance, the CRA may strike a Company from the register. These obligations do not end automatically merely because the business is temporarily inactive. For innovative startups, the Department of Employment and Entrepreneurship, the Entrepreneurship Promotion Division, EDAU and SIU offer training, mentoring, coaching, acceleration programs, startup events, FabLabs, Business Incubation Centers and one-stop support. The Startup Center in Changzamtog is intended for a new, problem-oriented idea with at least one MVP. Previous use of the space, simple replication or a lack of at least 40 percent value addition may exclude an applicant. The pitch requires at least 65 percent, and active participation must also be committed. A Business License is not mandatory for the application. Pure trading, ordinary services, shops and consulting without startup characteristics are not covered by this offer. Startup Launchpad 2026 lasts three days and combines training and mentoring with a possible pitch or pre-seed opportunity and six months of BITC incubation. Foreign direct investment (FDI) is generally possible under the FDI Rules and Regulations 2025 in all sectors that are not on the Negative List. Priority Sectors are subject to the thresholds and ownership rules in the relevant Schedules. For other activities, the minimum project size is Nu. 50,000,000 in manufacturing and Nu. 25,000,000 in services; the foreign ownership share may not exceed 74 percent. Invest Bhutan coordinates as the FDI point of contact, while approval remains part of the responsible procedure. With complete documents, general project approval takes up to five working days and approval in a Priority Sector up to three working days; amendments may be processed within two working days. The Business License must be applied for within one month after project approval, is valid for one year and must be renewed annually. Approval from the Royal Monetary Authority (RMA) for a foreign-currency account concerns only the FDI and foreign-exchange limit and does not replace a banking service. Business growth may require new licenses, sector approvals, and environmental or land approvals. Transfers of FDI shares within the permitted ownership limit require, among other things, consent, a transfer agreement, valuation or price evidence and a shareholders’ resolution. Initial approval may be granted within five working days; final approval follows after proof of payment. An expansion or downstream project may be treated as a new project. Businesses can cancel their Business License or Business Certificate through IBLS. The dissolution and liquidation of a Company are governed by the Company Act and the Winding Up Regulation 2024. For FDI, termination additionally requires approval from the responsible department and an application to the CRA. To repatriate capital or returns, the RMA requires, among other things, a Tax Clearance Certificate, settled or secured liabilities and a legal Winding-up Certificate. Formal registration enables contracts, commercial activity, property and share rights, and the registration and protection of intellectual property. The Industrial Property Division administers trademarks, patents, designs and geographical indications under the Industrial Property Act 2000, the Rules 2001 and the GI Rules 2025.