FDI is simply when a foreign person or company invests money to start or buy a business in Bhutan. The Royal Government of Bhutan encourages FDI because it helps the country grow its economy, create jobs, and bring in new technology. The rules for this are set out in the FDI Rules & Regulations 2025.

Bhutan welcomes foreign investment in almost all areas, except for a small "Negative List" of restricted activities. The government especially encourages investment in Priority Sectors, which are listed in two main groups:

• Production & Manufacturing: This includes areas like food processing, renewable energy, and pharmaceuticals.

• Services: This covers areas like Information Technology (IT), tourism, education, and

financial services.

To protect national interests, culture, and the environment, FDI is not allowed in a few specific areas, known as the Negative List (Schedule III). These typically include:

• Media and broadcasting.

• Most retail and wholesale trade activities.

• Mining for the sale of raw minerals.

• Activities that could harm the environment, national security, or Bhutan's unique traditional culture.

Priority Sector Activities - Varies by specific activity (details in Schedule I & II)

Other Manufacturing Activities  - Nu. 50 million (approximately USD 600,000+ )

Other Service Activities - Nu. 25 million (approximately USD 300,000+ ,)

Yes, in certain cases. The new regulations allow for up to 100 % foreign ownership in select, high-potential Priority Sectors. For all other non-priority activities, the maximum foreign shareholding is generally capped at 74 % equity, meaning you must have a Bhutanese partner with at least % ownership.

The first step is to get an FDI Registration Certificate from the Department of Industry given by Invest Bhutan Division.

This is a quick process:

1. . Submit your application to the Invest Bhutan Division under the Department of Industry.

2. The Department reviews your application to ensure it meets all the rules.

3. If everything is in order, the certificate is issued quickly, often within three working

days. 
If you want to invest in Bhutan or form a company, don't worry about the processes. Invest Bhutan Department at Basnet Attorneys and Law can help you set up your business in Bhutan.

All foreign investment must be made in a convertible currency (like USD, EUR, etc.). However, investors from India have the flexibility to invest using either a convertible currency or the Indian Rupee (INR)

Bhutan makes it easier for investors and their key staff:

•  Investor Card: Foreign investors are eligible for an Investor Card, which helps speed up the process for getting visas and other permits.

•  Visas: Long-term visas are available for foreign investors and their immediate families.

•  Work Permits: You can hire foreign experts if there are no qualified Bhutanese citizens available for the job. However, your company must have a plan to train and transfer knowledge to local employees.

Yes. The FDI Rules & Regulations 2025  allow foreign investors to invest in an existing domestic company in Bhutan. The investment will be treated under the same terms and conditions as if you were starting a brand new entity.

Yes. The FDI Rules & Regulations guarantee the right of foreign investors to repatriate (take out) their invested capital and earned dividends (profits) from Bhutan. This is done in the same convertible currency in which the original investment was made.

Bhutan offers various incentives to make investment attractive, including:

•  Tax Holidays: Periods where you do not have to pay certain taxes.

•  Accelerated Depreciation: Allowing you to deduct the cost of assets faster.

•  Customs Exemptions: Exemptions on customs duties and sales tax for importing essential plant and machinery.

The specific incentives depend on the sector and location of your project.

The FDI Rules & Regulations provide strong protection against nationalization or expropriation (the government taking over your assets). If such an event were to occur, the government guarantees prompt, adequate, and effective compensation to the investor.

Bhutan is committed to protecting IPR, including patents, trademarks, and copyrights. The government is actively working to update its intellectual property framework to ensure it aligns with international standards and provides robust protection for your technology and brand.

No, foreign investors cannot own land in Bhutan. However, land can be secured for your business operations through a long-term lease. The National Land Commission Secretariat manages all land-related matters.

The rules were designed to create a more investor-friendly environment by:

•  Streamlining Procedures: Consolidating old policies into one clear document.

•  Removing the Lock-in Period: Foreign investors now have greater flexibility as the mandatory lock-in period for investments has been removed.

• Single Window Services: The government has established a Single Window Service and an Economic Development Board to facilitate and simplify the entire investment process for you.

While the FDI Rules & Regulations 2025 aim to simplify the investment process, the local legal and regulatory landscape can still be complex for foreign investors. Engaging experienced local legal counsel, such as Basnet Attorneys & Law, is crucial for:

• Ensuring Compliance: We provide expert guidance to ensure your application, company incorporation, and ongoing operations are fully compliant with all Bhutanese laws, including the FDI Rules, Company Act, and relevant sectoral regulations.

• Due Diligence: We conduct thorough due diligence on potential local partners and project sites, mitigating risks before you commit capital.

• Efficient Registration: Our local knowledge and established processes help streamline the FDI Registration Certificate and Business License application, saving you time and preventing costly delays.

• Dispute Resolution: Should a dispute arise, we represent your interests in negotiation, arbitration, or litigation, ensuring your investment is protected under Bhutanese law.

Basnet Attorneys & Law provides comprehensive, end-to-end support for foreign investors, ensuring a seamless transition from initial concept to full operation in Bhutan. Our services cover every critical step of the investment lifecycle:

• Pre-Formation & Application: We handle the entire initial process, including name clearance, business plan review, and the application for the FDI Registration Certificate.

• Incorporation & Licensing: We manage the company incorporation process, secure all necessary business licenses, and assist with bank account opening.

• Agreements & Local Partners: We specialize in structuring and drafting all critical agreements, including robust Joint Venture (JV) and shareholder agreements, and facilitate the process of securing and formalizing local partnerships.

• Post-Formation & Compliance: We manage post-formation requirements, including processing Investor Cards and long-term visas for investors and key personnel, securing land lease agreements, and ensuring ongoing regulatory compliance.

In short, we manage everything—from initial application to post-formation compliance—allowing you to focus solely on your business objectives.