Bhutan

Starting a Business in

Bhutan

Listed below is a detailed summary of the bureaucratic and legal hurdles an entrepreneur must overcome in order to incorporate and register a new firm, along with their associated time and set-up costs.  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 (GNI).

The information appearing on this page 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 183 economies. The most recent round of data collection for the project was completed in June 2011.

  • Standardized Company

  • Legal Form: Limited Liability Company
  • City: Thimphu

About This Topic

To see indicator data for all economies, see the Starting a Business page. To see how economies rank, see the Rankings page.

No. Procedure Time to Complete Associated Costs
1 Obtain a security clearance from the Royal Bhutan Police

The Royal Bhutan Police can now check criminal records eletronically. The security clearence certificate is valid for one year.
1 week no charge
2 The company submits project proposal to Industrial Development Services Division (IDSD), Project Development Services Division

The Industrial Development Services Division (IDSD) reviews the project proposal. At the same time, if required, the Department of Industry sends a letter (with a copy of the project proposal) for sectoral clearance to the National Environment Commission for Environment Clearance (which takes at most 3 months) and other sectors. If sectoral clearance is required, the promoter usually waits for 2 to 3 months for a PDSD response, after which a detailed report must be filed. The promoter may take 1 to 2 months to prepare the report.

On August 24, 2005, the Regional Trade and Industry Office (RTIO) was empowered to issue environmental clearances for seventeen listed sectors (in lieu of the Environmental Unit).

Since September 26, 2005, the RTIO (in lieu of the IDSD) can also approve small and cottage-scale projects with a fixed investment of up to BTN 10 million in the listed sectors.
However, companies to be registered by the Registrar of Companies still must obtain the Environment Clearance from the National Environment Commission (NEC) before registering at the Registrar of Companies, if applicable.
4 days for activities requiring no sector / environmental clearance; up to 6 months for activities requiring sector clearance BTN 600
3 Register with the Registrar of Companies

The following six documents must be attached to the articles of incorporation:
1. Company name availability form.
2. Consent to act as director, duly filed by all directors.
3. Security clearance from the Royal Bhutan Police for all the directors.
4. Copy of citizenship identification card for all directors.
5. Declaration of compliance form signed by all directors.
6. Project approval from the Ministry of Industry (that is, the IDSD).
7. Articles of incorporation
If required and if every formality is fulfilled in about 30 days, the Registrar of Companies will issue the letter of registration. At present, only local companies can be registered. Advertisement is optional. A company may choose to publish a notice in the weekly newspaper, the Kuensel, by booking at least a week in advance.

If the articles of association or incorporation are satisfactory, the Registrar of Companies will record all information in its computer database, CREG, and print two copies of the certificate of incorporation. A hard copy file is also opened for the new company.

Registration Incorporation Fee by Authorized Share Capital (as established by Schedule 4 of the Companies Act of the Kingdom of Bhutan, 2000):
- Authorized share capital not exceeding BTN 1 million: BTN 1,000.
- Authorized share capital not exceeding BTN 1 million but less than BTN 2 million BTN 1,500.
- Authorized share capital not exceeding BTN 2 million: BTN 2,000.

Upon incorporation, companies must obtain a trade or industry operating license. As of 2007, the process was reformed. Only industrial companies must obtain an additional clearance from (a) the City Council (known as the City Corporation) in the urban areas and (b) the Office of the District Administrators in the districts. The City Corporation verifies the site location and whether it is legally owned. A form is presented to the City Council or to the Office of the District Administrator, depending on the location, and to the Regional Trade and Industry Office. This form can be obtained for a fee of BTN 50 from the Office of the Regional Director, Regional Trade and Industry Office in Thimphu, Pheuntsholing, Gelephu, Samdrup Jongkhar, Traongsa, and Trashigang. No fee is charged for the additional clearance by the City Council or the District Administrator.
3 days BTN 2000
4 Apply for a trade/industrial license at the Regional Trade and Industrial Office (under Ministry of Economic Affairs)

No business activity can be carried out before obtaining a trade or industrial license. Sectoral approvals (if required) must be obtained. Businesses with more than BTN1 million must present a project report, according to guidelines issued by the Ministry of Trade and Industry.

Fee Schedule

Scale   Investment (BTN million) Registration fees License fees License cost Booklets
Large More than 100 8,000 4,000 100 12,100
Medium 10 –100 4,000 2,000 100 6,100
Small 1–10 2,000 1,000 100 3,100
Cottage Less than 1  1,000 500 100 1,600

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 Registration fee, license fee, booklet charge (see comment)
5 Apply for taxpayer identification number and register the company for specific taxes

Every company must register for business income tax, for which a business identification code (BIC) is given. This BIC number must be presented to obtain a business license and to participate in public tenders and works. In practice, companies may register when they pay their first tax installment.
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 BTN 879
* 7 Open a bank account

Under the Company Act 2000, a bank account under the company’s name must be opened within a month of incorporation.
1 day (simultaneously with previous procedure) no charge
* 8 File the evidence of operating a bank account with the Registrar of Companies

Evidence of bank account operation must be presented and filed with the Registrar of Companies once the certificate is issued and upon obtaining the license.
1 day (simultaneously with previous procedure) no charge
* Takes place simultaneously with another procedure.
Explore Economy Data