Bhutan

Starting a Business in

Bhutan

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Bhutan. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 189 economies. The most recent round of data collection was completed in June 2013.

Compare Bhutan to 188 other economies.

  • Standardized Company

  • Legal Form: Limited Liability Company
  • Paid in Minimum Capital Requirement: None
  • City: Thimphu
No. Procedure Time to Complete Associated Costs
1 Obtain a Security Clearance Certificate (SCC) from the Royal Bhutan Police

In June 2011, The Ministry of Home and Cultural Affairs launched the Security Clearance Service: an online system to issue Security Clearance Certificates (SCC). The system was developed in coordination with the Department of Information Technology and Telecom at the Ministry of Industry and Commerce in response to the directives issued by the Bhutan Cabinet on March 27, 2009. The security clearance certificate is valid for one year.
3 days no charge
2 Submit project proposal to the Regional Trade and Industry Office

An application form along with the project proposal is submitted to the Industrial Department Division (IDD) of the Ministry of Economic Affairs.
In the case of small and cottage-scale companies with startup capital of up to BTN 10 million, the Regional Trade & Industry Office of the Department of Cottage and Small Industries reviews the project proposal. Approval is required to verify that the proposed industrial project is in line with industrial development plans of the country, and for issuance of the industrial license.

If sector clearance is required, the Department of Industry sends a letter to the relevant sectors requesting such clearance for the proposed project. However, for a list of 17 "delegated" activities, medium and large scale industries receive environmental clearance from the Environmental Unit under the Department of Industry, while small and cottage scale industries receive environmental clearance from the Regional Trade & Industry Offices. Otherwise, environmental clearance shall be obtained from the National Environment Commission (NEC) Secretariat.
4 days for activities not requiring sector clearance; up to 3 months for activities requiring sector clearance BTN 600
3 Register at the Office of the Registrar

Company registration is subject to the Companies Act of the Kingdom of Bhutan 2000. Upon applying for registration, the entrepreneur must present his/her original citizenship identity card and submit the following documents to the Companies Registry Division, Department of Industry:
1. Articles of Incorporation
2. Company name clearance form
3. Consent to act as Directors of the company form
4. Declaration of compliance form signed by the company directors
5. Sector clearance from the concerned sectors if applicable
6. Name and Address of the first Chief Executive Officer of the company
7. Security Clearance Certificates of company directors

The company receives its certificate of incorporation. Once the documents are processed, the Registrar of Companies issues the certificate of registration. The registered company may choose to publish a notice in the Kuensel weekly newspaper announcing its registration.

According to Schedule 4 of the Companies Act of the Kingdom of Bhutan, registration fees are as follows:
- For an authorized share capital up to BTN 1 million: BTN 1,000
- For an authorized share capital between BTN 1 million and BTN 2 million: BTN 1,500
- For authorized share capital above BTN 2 million: BTN 2,000
3 days BTN 1,500
4 Obtain a business license from the Regional Trade and Industry Office of the Ministry of Economic Affairs

To apply for the license, the following documents must be submitted:
1- Application Form for Industrial License (Form III)
2- Citizenship ID Card
3- Sector Clearance (depending on activity)
4- Location Clearance obtained from the Thimphu City Corporation (Dzongkhag or Thromde)
5- Valid Security Clearance Certificate
6- Two recent passport size photographs
7- Project Approval from the Department of Cottage & Small Industry for cottage and small industries and from the Department of industry for medium and large scale industries.

License fees are as follows:
- For cottage scale industries: BTN 1,600
- For small scale industries: BTN 3,100
- For medium scale industries: BTN 6,100
- For large scale industries: BTN 12,100

Since July 1, 2005, applications forms for trade and industrial licenses can be downloaded from the Ministry of Trade and Industry’s website (www.mti.gov.bt). Photocopies of application forms are accepted.
2 days BTN 3,100
5 Register for taxes and obtain the Business Identifier Code (BIC) Number

Every company must register for corporate income tax. A Business Identification Code (BIC) is then assigned to the company. This BIC number must be presented to participate in public tenders and works.
1 - 3 days no charge
6 Make a company seal

Companies must have a seal within 1 year of incorporation. This is verified by the Registrar during the annual inspection.
1 day Between BTN 500 and BTN 1,200
* 7 Open a bank account

Under the Company Act 2000, a company bank account must be opened within a month of incorporation.
1 day (simultaneously with previous procedure) no charge
* 8 File proof of opening a company bank account at the Office of the Registrar


1 day (simultaneously with previous procedure) no charge
* Takes place simultaneously with another procedure.

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