Before registering a limited liability company in Bhutan, you should know as well about Bhutan. Hopefully provided in this article information will help both of local and foreign nationals.
Bhutan is a kingdom in the subcontinent of South Asia. A relatively cold country, Bhutan is situated in the eastern section of the Himalayas. One of the rare countries that has no prior history of colonization, Bhutan upheld a no entry law until a few decades ago. This law ensured that no foreigner nor foreign entity could enter Bhutanese land. This was maintained by the governing body of Bhutan to preserve both the culture as well as the political peace of the country.
However, in the recent decades, Bhutan has since lifted this ban. As such, foreigners and tourists can enter the country, but in a limited quota. In this vein, Bhutan has now struggled to pick up its economy to match global stands. In terms of wealth and revenue, Bhutan is still classed as a third world country. With a human development index of 0.612, they are classed as having a medium standard of living.
Moreover, Bhutan’s GDP as of 2018 was $2.627 billion, giving it the rank of 161st place out of 186 countries. Furthermore, Bhutan’s export revenue is outweighed by the cost of its imports, where the imports, valued at $1.025 billion is almost double the exports at $554.6 million. This leaves Bhutan with a current account balance of −$547 million, making its gross external debt $2.671 billion. As of 2018, Bhutan has been ranked 81st in terms of ease of being able to do business with.
Which means it is a country that is “easy” to do business with. Bhutan uses two currencies within its borders: the Bhutanese ngultrum and the Indian rupee. The national and most popular language is Dzongkha. However, English is also widely spoken, with all government documents and proceedings conducted in both English and Dzongkha. Thus, making it easy to conduct business activities.
Currently, Bhutan retains membership with the following groups:
- The United Nations
- The SAARC groups of countries (South Asian Association for Regional Cooperation)
- The Non-Aligned Movement
- The BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation)
However, despite being a little economically backwards, Bhutan has made great strides to improve. The Bhutanese government now tries to encourage as much foreign investment as possible. Hence, making the registration process as simple as possible. Moreover, with its economic ties, Bhutan has many free trade agreements with other countries. As such, Bhutan can be viewed as a blank canvas, wherein your company has plenty of potential to grow.
The following legal structures are available to choose from for foreign company registrations:
- Limited Liability Company
- Joint Venture Company
- Branch office of pre-existing foreign company.
However, for the purpose of this article, we will be focusing on how to register a limited liability company in Bhutan.
Steps to establishing a limited liability company in Bhutan:
Do note, that normally, only citizens of Bhutan are allowed to register companies. However, in order to have a successful foreign registration, you will have to ensure that your capital of investment is in US currency. That is, US Dollars.
Moreover, this application will have to be submitted manually to the Ministry of Economic Affairs of Bhutan. To be specific to the Company Registry Division which is run by the Department of Industry.
You may download the application form to register your company here.
- Step 1- Choose an appropriate company name
This name has to be unique. It must not resemble any names of pre-existing companies. And also, it should not contain sensitive words or language. You may conduct a name search on their website here.
- Step 2- Obtain a Security Clearance Certificate
To obtain a Security Clearance Certificate (SCC), you will have to go to the office of the Royal Bhutan Police. The following documents will be needed for this step:
- Completed application form
- Your passport
- Two recent passport sized photographs
- Proof of your legal stay in Bhutan
- Contact details
- Self-addressed prepaid envelope
This registration should be conducted at the address below:
Royal Bhutan Police HQ,
11011 Thimphu, Bhutan.
Phone – 975-2-322-347/348
- Step 3- Submitting business proposal
Next, you will have to draw up a document detailing your business activities and goals. This document will then have to be submitted alongside your application to the Industrial Department Division.
- Step 4- Registration
Next, you will have to formally register at the Office of Registrar. Afterwards you may collect your business license from the Regional Trade and Industry Office. You will also need to have a document with details of any shareholders and/or directors of the company you may appoint. This document will have to be signed by aforementioned persons.
- Step 5- Company Seal
Bhutanese law requires that each company should have their own unique seal. This needs to be done within one year of obtaining your business license.
- Step 6- Opening a business bank account
Now that you have your official business registration license, you may open a company bank account. You may do so at any bank and you will require the following supporting documents:
- Your passport
- Your certificate of incorporation
- The security clearance certificate
Frequently Asked Questions – FAQ
How much does the registration process cost for a limited liability company in Bhutan?
- Nu. 1,000 if the authorized share capital is under Nu. 1,000,000
- Nu. 1,500 if the authorized share capital falls between Nu. 1,000,000 to Nu. 2, 000,000
- And Nu. 2000 if the value is above Nu. 2,000,00
What is the minimum amount for investment?
There is no hard-set amount for minimum investment. This value is at the discretion of the business owner.
How long will this process take?
This process will take approximately 30 working days.
What law does Bhutan follow?
Bhutan has its own laws and constitutions. This is called the Supreme Law of Bhutan.
How many directors/shareholders will I need to register a limited liability company in Bhutan?
You do not have a minimum quota of directors/shareholders. You may opt to hire or not hire as many as you like at your discretion.
Where do I make the registration?
You can make the registration at the Ministry of Economic Affairs.