The Bhutan Foreign Direct Investment (FDI) Rules and Regulations 2025 provide a detailed framework for the entry, operation, and regulation of foreign investments in Bhutan. These rules outline which sectors are open to FDI, the ownership limits for foreign investors, the minimum capital requirements, and the conditions that must be met for approval. The regulations are designed to encourage investments in priority sectors that align with Bhutan’s economic and development goals, while also protecting industries critical to national interests.
The Schedules of the FDI Rules divide activities into three main lists:
Schedule I covers priority sectors in production and manufacturing, such as agriculture, renewable energy, and high-value manufacturing.
Schedule II covers priority sectors in services, including education, health, hospitality, transport, IT, and waste management.
Schedule III lists the negative list — activities where foreign investment is prohibited to safeguard local industries, cultural values, and national security.
The explanations below break down each activity as listed in the original schedules, explaining the minimum investment required, maximum foreign ownership allowed, and any special conditions that apply. Where useful, practical examples are provided so that investors can understand how these rules apply in real situations.
CHAPTER I – PRELIMINARY
Short Title and Commencement
1. These Rules and Regulations shall:
(1) be called the Foreign Direct Investment Rules and Regulations 2025.
(2) come into force on the 23rd day of the 5th Month of the Wood Female Snake Year of the Bhutanese calendar corresponding to 18th Day of the 7th Month of 2025.
Explanation:
This rule gives the official name of the document — “Foreign Direct Investment Rules and Regulations 2025” — and sets the exact date when it becomes legally effective. The Bhutanese calendar date (Wood Female Snake Year) is matched to the Gregorian date, which is 18 July 2025. For example, if a foreign investor applied for FDI before 18 July 2025, the old rules would apply to that process, but any application after that date follows these 2025 rules.
Application
2. These Rules and Regulations apply to all Foreign Direct Investments (hereinafter referred to as 'FDI's) in the country and Rules shall also govern any action taken or process initiated prior to these Rules and Regulations.
Explanation:
The rules cover every kind of FDI in Bhutan, regardless of sector. It also means that if a process started before the rules came into effect, the procedures and decisions will still follow these 2025 rules going forward. For example, if an investor started applying for an FDI project in early July 2025, but approval happens in August, the later stages must follow the 2025 rules.
Repeal
3. The Foreign Direct Investment Regulations 2019 and the Foreign Direct Investment Policy 2019 is hereby repealed.
Explanation:
The 2019 FDI regulations and policy are no longer valid — they have been replaced entirely by this 2025 document. That means all future investment processes, rights, and obligations are governed by this one set of rules.
CHAPTER II – GENERAL CONDITIONS ON FOREIGN DIRECT INVESTMENT
Sectors Open for Foreign Direct Investment
4. FDI shall be allowed in all sectors except for those listed in the Negative List as provided in Schedule III of these Rules and Regulations.
Explanation:
Foreign investment is allowed in all industries unless they are specifically banned under the “Negative List” in Schedule III. For example, news media and real estate are on the Negative List, so foreigners cannot invest in them.
5. The activities allowed under Rule 4 of these Rules and Regulations shall be:
(1) Priority Sector Activities in the manufacturing and service sectors as listed in Schedule I and Schedule II of these Rules and Regulations.
(2) Other Activities not listed in the Schedules of these Rules and Regulations.
Explanation:
There are two categories:
1. Priority Sectors — listed in Schedule I (manufacturing) and Schedule II (services). These get special treatment, such as higher foreign ownership limits.
2. Other Activities — not listed in the schedules, but still allowed if not on the Negative List.
For example, if an investor wants to open a solar energy plant (listed in Schedule I), it’s a Priority Sector. But if they want to open a software design company (not listed), it’s an “Other Activity.”
6. The minimum project cost and maximum foreign investor’s equity for priority sector activities shall be as provided in Schedule I and Schedule II of these Rules and Regulations.
Explanation:
Priority sectors have their own cost and foreign ownership rules. These are written in Schedules I and II. For example, a five-star hotel requires a minimum cost of Nu. 200 million and allows 100% foreign ownership.
7. For Other Activities, the minimum project cost shall be Nu. 50 million in the manufacturing sector and Nu. 25 million in the service sector, with the maximum foreign investor’s shareholding of 74% equity.
Explanation:
If the investment is not in a Priority Sector, it must meet these limits:
Manufacturing: At least Nu. 50 million project cost.
Services: At least Nu. 25 million project cost.
Maximum foreign ownership is 74% (the rest must be owned by a Bhutanese partner). Example: A foreign investor wants to set up a Visa Processing Services (services). They must invest at least Nu. 25 million and can own up to 74% of the business.
8. Investments in the Other Activities shall fulfil the following:
(1) In the case of production and manufacturing, value addition of 30% or more;
(2) Positive impact on foreign reserve by either earning foreign currency directly, substituting imports or providing services that reduce foreign exchange outflows; and
(3) Creation of quality jobs.
Explanation:
For “Other Activities” (non-priority sectors), the business must:
Add at least 30% value in manufacturing — meaning they must enhance the raw materials, not just resell them.
Help Bhutan’s foreign reserves by either earning foreign currency, replacing imported goods, or offering services that reduce spending abroad.
Create quality jobs — not just temporary or low-skill positions.
Example: A furniture factory that uses local wood but designs, assembles, and sells premium pieces abroad would meet all three conditions.
9. FDI in an existing domestic entity shall be allowed subject to the same terms and conditions as applicable to new entities.
Explanation:
Foreign investors can buy shares in an existing Bhutanese business, but the same investment rules apply (minimum capital, ownership limits, etc.) as if it were a new FDI company.
10. FDI may be made by establishing a Venture Capital Fund for the purpose of investing in impact startups. Venture capital funds will be allowed to support startups in all sectors except for those listed in the Negative List as provided in Schedule III. Such investment in startups shall not be treated as FDI.
Explanation:
Foreign investors can set up venture capital funds to finance Bhutanese startups. They can invest in any sector except those banned in the Negative List. These investments are not considered “FDI” — meaning they won’t be bound by the same FDI rules, which makes it easier for startup funding. Example: A foreign VC firm can fund a Bhutanese mobile app startup without going through FDI registration.
Foreign Equity
11. The minimum foreign equity in an FDI business shall be twenty percent of the total equity. For foreign institutional investors, the minimum foreign equity shall be ten percent of the total equity.
Explanation:
To qualify as FDI, foreigners must own at least 20% of the company’s total shares.
If the investor is an institution (like a foreign bank, investment fund, or company), they only need 10% ownership.
Example: If a company’s total equity is Nu. 100 million:
Regular foreign investor must invest at least Nu. 20 million (20%).
Institutional investor must invest at least Nu. 10 million (10%).
Maximum Foreign Equity
12. The maximum foreign equity ownership shall be as specified in Schedules I and II of these Rules and Regulations.
Explanation:
The maximum foreign ownership allowed depends on the sector:
Some sectors allow 100% foreign ownership.
Others have a cap, usually 74%, to ensure Bhutanese participation.
You must check Schedules I & II for the exact limit in your sector.
Forms of FDI
13. Foreign direct investment may take the following forms:
(1) Establishment of a new FDI company;
(2) Purchase of shares in an existing Bhutanese company; or
(3) Joint venture with a Bhutanese partner.
Explanation:
You can invest in Bhutan in three ways:
Start a brand-new FDI company from scratch.
Buy shares in an existing Bhutanese company.
Form a joint venture with a Bhutanese partner, where both hold shares.
Capital Requirements
14. The minimum project cost shall be as specified in Schedules I and II of these Rules and Regulations.
Explanation:
Every sector has a minimum investment amount you must commit — listed in Schedules I & II.
Example:
5-star hotel: Nu. 200 million minimum.
IT services in an IT park: Nu. 3 million minimum.
In-Kind Contributions
15. Foreign investors may contribute capital in kind, such as equipment, machinery, or intellectual property, subject to valuation and approval by the Department.
Explanation:
Instead of only cash, you can invest through non-cash assets like machinery, equipment, technology, or patents.
But — the value must be officially assessed and approved before it counts toward your equity.
Land Contribution
16. Bhutanese partners may contribute land as equity, subject to applicable laws and valuation.
Explanation:
If the Bhutanese partner provides land instead of cash, it can be counted as their share in the company.
Example: For a Nu. 50M joint venture, if the Bhutanese partner owns land worth Nu. 20M, that can be their equity portion — but the land must be legally permissible for the project and valued by an approved valuer.
Sector-Specific Restrictions
17. Foreign direct investment shall not be permitted in the activities listed in Schedule III of these Rules and Regulations.
Explanation:
There is a negative list of sectors where foreign investment is banned — for example:
News media
Retail trade
Standalone mining of raw minerals
Real estate
(See full list in Schedule III)
Priority Sectors
18. Priority sectors eligible for incentives and fast-track approvals are listed in Schedules I and II.
Explanation:
If your project falls into a priority sector (listed in the schedules), you can enjoy quicker approval and possibly tax incentives. Examples:
High-tech agriculture
Renewable energy
IT services in an IT park
Multi-specialty hospitals
Change of Activity
19. Any change in the nature of business activity from that approved under the FDI Registration Certificate shall require prior approval from the Department.
Explanation:
If your FDI company wants to switch business sectors or expand into a different line of work, you must get approval first.
Example: If you’re approved for a manufacturing plant but later want to add a tourism business, you need Department approval.
Expansion of Business
20. Expansion of an existing FDI business within the same sector shall be subject to prior notification to the Department.
Explanation:
If you’re growing operations but staying in the same business line, you don’t need a full new approval — but you must inform the Department before expanding.
Downstream Projects
21. Downstream projects using outputs from an FDI company shall require approval from the Department if the downstream project involves foreign investment.
Explanation:
If a new project uses products from your FDI business and has foreign investment, it needs separate approval.
Example: A foreign-owned dairy company supplying milk to a foreign-owned cheese factory — the cheese factory also needs FDI clearance.
Conversion of Domestic Company to FDI Company
22. A domestic company may be converted into an FDI company by transfer of shares to a foreign investor, subject to compliance with these Rules and Regulations.
Explanation:
A Bhutanese-owned company can become an FDI by selling shares to a foreign investor — but it must follow the same process as a new FDI application (ownership limits, sector restrictions, etc.).
CHAPTER III – FINANCIAL TRANSACTIONS AND FOREIGN EXCHANGE MANAGEMENT
Foreign Exchange
23. FDI companies shall have access to convertible currency and Indian Rupee from the Royal Monetary Authority for:
(1) purchase of capital goods where the foreign investor’s share of equity is insufficient to meet the total requirement;
(2) import of raw materials;
(3) remittance of remuneration and other current transactions.
Explanation:
FDI companies can get foreign currency (like USD, EUR) and Indian Rupees from the Royal Monetary Authority (RMA) for specific purposes:
Buying capital goods (like machinery) if their own investment money isn’t enough.
Importing raw materials.
Paying salaries, fees, and other ongoing expenses.
Example: If a foreign-owned manufacturing plant needs extra machinery costing more than the capital invested, they can request extra forex from RMA.
24. FDI Companies shall seek approval from the Royal Monetary Authority prior to opening a foreign currency account with a local bank. Any FDI business-related transactions shall be routed through the local bank.
Explanation:
If an FDI company wants a bank account in foreign currency inside Bhutan, they must get RMA approval first. All business payments involving foreign currency must go through this approved local bank account. This helps monitor and control foreign exchange flows.
25. FDI companies shall submit the details of the foreign currency account to the Department within one month from the date of opening such a bank account.
Explanation:
After opening a foreign currency account (with RMA approval), the company must inform the Department of Industry within 30 days. This ensures transparency and tracking of investment-related funds.
Repatriation of Capital
26. Foreign investors shall have the right to repatriate the invested capital or any capital gains in the currency of investment in accordance with the relevant laws.
Explanation:
Foreign investors can take back (send out of Bhutan) the money they invested or any profits from selling their shares, in the same currency they invested. Example: If they invested in USD, they can take it back in USD, following Bhutan’s laws.
27. Foreign investors shall be allowed to dispose off their investments made in the FDI company in line with these Rules and Regulations, Companies Act of Bhutan, 2016 and other relevant laws.
Explanation:
Investors can sell their ownership in an FDI company, but they must follow the 2025 FDI Rules, the Companies Act, and any other applicable Bhutanese laws.
28. FDI Companies shall be entitled to repatriation of the compensation on account of nationalization or expropriation of the business and such compensation shall be in the currency of investment or a mutually agreed currency.
Explanation:
If the government takes over (nationalizes) or forcibly acquires (expropriates) a business, it must pay compensation. The investor can take that compensation out of Bhutan in the currency they invested or another agreed currency.
Repatriation of Dividend
29. Foreign investors shall have the right to repatriate dividends in the currency of investment without any restrictions.
Explanation:
Foreign investors can send their share of profits (dividends) back to their home country in the same currency they invested, without limits — as long as it’s legal.
30. An application for repatriation of dividend shall be submitted to the Royal Monetary Authority with a copy of shareholders' resolution indicating the repatriation of dividend.
Explanation:
To send dividends abroad, the company must apply to RMA and attach the shareholders’ resolution approving the dividend payment. This ensures it’s a legal distribution agreed by the company.
Payment for Collaborative Agreement
31. Payment of royalties or fees by FDI Companies for collaboration or franchise agreements shall be permitted for the duration of the agreement, in annual amounts not exceeding 10% of net sales.
Explanation:
If an FDI company uses a foreign brand name, patent, or know-how under a franchise or collaboration agreement, it can pay royalties or fees — but the total yearly payment cannot be more than 10% of net sales.
Example: If annual net sales are Nu. 100 million, the maximum royalty payment allowed is Nu. 10 million.
32. The currency of payment of royalties, technical services fees or management fees shall be based on the approval of the royalty or collaboration agreement, technical service or management agreements.
Explanation:
The currency in which royalties or fees are paid will follow what was approved when the collaboration or service agreement was cleared by the Department.
33. An application with a copy of the approval letter for collaboration issued by the Department shall be submitted to the Royal Monetary Authority for payment of any royalties, technical services fees or management fees.
Explanation:
To make royalty or service fee payments abroad, the company must show RMA the Department’s approval letter for that agreement.
Borrowings
34. FDI Companies shall raise loans or borrow from any financial institutions in the country. The initial debt-equity ratio shall be as per the Prudential Regulations 2017 of the Royal Monetary Authority.
Explanation:
FDI companies can take loans from Bhutanese banks. However, the proportion between debt (loans) and equity (investor’s own money) must follow the limits set in RMA’s 2017 Prudential Regulations.
35. FDI Companies may borrow from abroad as per the External Commercial Borrowing Guidelines 2025 and other applicable laws in the country.
Explanation:
They can also take loans from foreign banks or lenders, but must follow Bhutan’s External Commercial Borrowing (ECB) Guidelines 2025 and related laws.
36. FDI companies shall be granted permission for conversion of External Commercial Borrowings into equity shares by the Department subject to the following:
(1) The foreign equity after conversion of loan into equity is within the sectoral cap, if any;
(2) All requests for conversion should be accompanied by a special resolution of the company indicating the conversion.
Explanation:
If a foreign loan is converted into ownership shares in the company:
It must still respect the maximum foreign ownership allowed for that sector.
The company must have an official resolution from shareholders agreeing to the conversion.
Example: A foreign investor lends USD 1 million to the company. Later, instead of repaying, the company gives them shares of equal value — this is allowed if it respects ownership limits.
CHAPTER IV – INVESTOR CARD, VISA AND PERMIT
Investor Card
37. Foreign investors or their authorized representatives making investments in an amount exceeding Nu. 15 million shall be provided with investor cards upon the commencement of business. The card shall grant a foreign investor or the authorized representative the approval to reside in the country for a period of three years and further extensions shall be facilitated.
Explanation:
If a foreign investor puts in more than Nu. 15 million, they can get an investor card once the business starts. This card lets them live in Bhutan for three years, with possible extensions. Example: An investor funding a Nu. 20 million factory can get this card to stay in Bhutan without reapplying for visas frequently.
38. The approval to reside in the country shall exempt the foreign investor or their authorized representatives or spouse and dependents from the Sustainable Development Fee.
Explanation:
The Sustainable Development Fee (SDF) — normally charged to tourists — does not apply to investors, their representatives, or their families holding an investor card. This reduces the cost of living in Bhutan for them.
39. The spouse of foreign investor or authorized representative who is granted an investor card shall be allowed to take up employment in the country subject to obtaining a work permit.
Explanation:
Spouses of investors or their representatives can work in Bhutan, but they still need an official work permit.
40. The spouse and dependent of such foreign investor or the authorized representatives may undertake studies in the country without a separate visa.
Explanation:
Family members holding dependent status under the investor card can study in Bhutan without applying for separate student visas.
41. FDI companies shall notify the Department on the commencement of the business to obtain investor cards for their foreign investors or authorized representatives.
Explanation:
Once the business officially starts, the company must inform the Department so investor cards can be issued.
42. All Foreign investors' or authorized representatives’ travel shall be facilitated through business guest visas until the commencement of business. Foreign investors not qualifying for an investor card shall be facilitated with a business guest visa for their business-related travels.
Explanation:
43. Before the business starts, investors will be given business guest visas to enter Bhutan for work-related activities. If their investment is below Nu. 15 million (so they don’t qualify for an investor card), they can still use business guest visas for visits.
Visa
43. Multiple entry visas exempt from the Sustainable Development Fee shall be provided for foreign investors, their authorized representatives, their board directors, and expatriate employees, with a commitment to process within three working days upon receipt of a complete application.
Explanation:
Multiple-entry visas allow people to come and go freely during their validity. These visas are SDF-exempt and issued within three working days if the application is complete.
44. Multiple entry visas shall be issued after an investment is accorded an FDI Registration Certificate to enable the smooth establishment of the FDI business.
Explanation:
Once an FDI project gets its registration certificate, multiple-entry visas are granted to help set up operations.
45. Route permits for the foreign investors or authorized representatives shall be facilitated for a maximum period of three months or the duration of stay whichever is less. Such permits may be renewed on a quarterly basis.
Explanation:
For travel within Bhutan (especially to restricted areas), foreign investors get route permits lasting up to three months, renewable every quarter.
Work Permit
46. FDI companies may apply for work permits for recruitment of foreign professional and non-professional expatriates for the establishment and operation phase of the business if Bhutanese qualified and experienced personnel are not available.
Explanation:
If Bhutanese workers with the needed skills aren’t available, companies can hire foreigners — whether skilled professionals or unskilled workers — during setup and operations.
47. Any recruitment of foreign professional and non-professional expatriates by the FDI companies shall be in accordance with Labour and Immigration Laws and Regulations and amendments thereto.
Explanation:
Hiring foreign workers must follow Bhutan’s labor and immigration rules — including quotas, contracts, and permit renewals.
Dependent Permit
48. The Government shall issue dependent permits to dependents of expatriate employees in the professional category in accordance with Immigration laws.
Explanation:
Professional expatriates (e.g., foreign engineers or doctors) can bring dependents, who get permits under immigration laws.
Skills Development
49. All FDI companies are encouraged to engage and recruit Bhutanese nationals for the development of skill and increase employment.
Explanation:
Although foreign workers are allowed, companies are urged to hire and train Bhutanese, building local capacity and reducing dependency on expatriates over time.
CHAPTER V – INVESTMENT PROTECTION AND COMPLIANCE
Nationalisation and Expropriation
50. No investments shall be subject to nationalisation and or expropriation. In those cases where investments are nationalised or expropriated in the national interest, the Government shall ensure that:
(1) Expropriation or nationalisation are carried out in a non-discriminatory manner and the compensation paid is prompt, adequate, effective and fair.
(2) Payment is made promptly after the asset is nationalised or expropriated and a commercial rate of interest is paid for the period between nationalisation or expropriation and payment.
(3) Compensation amount reflects the market value of investment nationalised or expropriated immediately prior to knowledge of the nationalisation or expropriation being publicly made available; and
(4) Compensation paid is either the currency in which the investment was made or another mutually agreed convertible currency and, in either case, will be freely transferable.
Explanation:
Bhutan commits not to seize foreign-owned businesses except for national interest reasons (e.g., public safety, environmental emergency). If it does happen:
It must be fair and non-discriminatory.
Payment must be quick, in line with market value before the takeover was announced, plus interest until payment.
Payment will be in the same currency as the investment (or agreed alternative) and freely transferable abroad.
National Treatment
51. The Government will accord national treatment to all Foreign Direct Investments.
Explanation:
Foreign-owned companies will be treated the same as Bhutanese-owned companies regarding laws, regulations, and opportunities — no extra disadvantage just for being foreign-owned.
Incentives and Exemptions
52. FDI Companies shall be entitled to the same incentives and exemptions granted to similar domestic investments under the Fiscal Incentives Act of Bhutan 2021 and amendments thereto.
Explanation:
If domestic companies get tax breaks or duty exemptions under Bhutan’s fiscal laws, FDI companies in the same sector and conditions will get them too.
Protection of Intellectual Property Rights
53. Intellectual property rights of the FDI companies shall be protected under the Intellectual Property laws or under the following international conventions:
(1) Paris Convention for the Protection of Industrial Property;
(2) Madrid Agreement Concerning the International Registration of Marks;
(3) Protocol to the Madrid Agreement; and
(4) Berne Convention for the Protection of Literary and Artistic Works.
Explanation:
FDI companies’ patents, trademarks, and copyrights are protected under Bhutanese law and major global treaties.
Example: A foreign software company’s source code will be protected against unauthorized copying in Bhutan.
Taxation
54. All FDI companies shall be subject to taxes, levies, charges, fees or any other charges under the Sales Tax, Customs and Excise Act, Income Tax Act, Customs Act of Bhutan and other relevant laws and amendments thereto.
Explanation:
FDI companies must pay taxes and fees like any other business — including sales tax, customs duties, and income tax — as per Bhutanese law.
Access to Land
55. Land shall be made available to FDI businesses on lease. However, local partners shall be allowed to capitalize freehold land as their equity contribution.
Explanation:
Foreigners can’t own land outright, but they can lease it. If a local partner owns freehold land, they can use it as part of their investment in the FDI company.
56. In such cases where the local partner has contributed land as their equity, the local partner shall ensure that they remain in the business as a shareholder. In the event they wish to exit the FDI company, they shall ensure that their share held in the company (through land contributed as equity) is either transferred to another local partner or shall exit the company with land ownership being transferred back to the individual and the FDI company holding the land on lease.
Explanation:
If a local uses their land as equity in an FDI, they must remain part of the company or transfer that land-share to another Bhutanese. If they leave, the land reverts to them, and the company can only lease it.
57. The Government may lease out State land or land in the industrial park to FDI companies for establishing their business. In such cases, the Government shall provide State land for an initial duration of 30 years, which shall be extendable.
Explanation:
FDI companies can get long-term (30 years) renewable leases for state or industrial park land for business purposes.
Compliance
58. FDI companies shall adhere to relevant laws governing foreign investments in addition to these Rules and Regulations, ensuring comprehensive compliance with legal requirements.
Explanation:
FDI companies must follow all applicable Bhutanese laws, not just these FDI Rules — including labor laws, environmental regulations, tax laws, etc.
CHAPTER VI – REGISTRATION AND APPROVAL
Registration
59. An investor shall apply for registration of FDI in sectors that are open to FDI, meet or exceed minimum investment thresholds, and adhere to prescribed shareholding structures.
Explanation:
To register an FDI project, the investor must:
Choose a sector open to FDI (not on the Negative List).
Meet the required minimum project cost.
Follow ownership limits (foreign vs local shares).
60. An investor shall apply online for FDI registration along with the following documents:
(1) Copy of company incorporation certificate and profile if the investor is a company;
(2) Shareholders’ resolution of the foreign investing company;
(3) Notarized copy of passport and curriculum vitae if the investor is an individual;
(4) Curriculum vitae of local partner where applicable;
(5) Documents establishing title and mutually agreed value of land where land is being contributed as local equity; and
(6) Final audited accounts of the existing entity for the last financial year or business valuation report, if the business proposal is for FDI in an existing domestic entity.
Explanation:
The online application needs proof of identity and legitimacy. For companies — incorporation certificate, shareholder approvals; for individuals — passport, CV. If there’s a Bhutanese partner contributing land, proof of ownership and valuation is needed. For buying into an existing local business, audited financials or valuation reports are required.
61. If an investor intends to run multiple businesses, a separate application shall be submitted for each business activity.
Explanation:
Each FDI project must be applied for separately — no “one approval for all” approach.
62. An investor shall fulfil the minimum project cost and maximum foreign investor’s equity requirements separately if the investor applies for the same activity in different locations.
Explanation:
If the same type of business is set up in different places, each must meet the cost and ownership rules individually. Example: Two hotels in different towns — each must meet minimum investment and ownership limits.
Registration Certificate
63. The Department shall issue an FDI Registration Certificate within three working days after receiving the registration application except where:
(1) Additional information or clarification is required from the concerned sectors; or
(2) The application submitted is incomplete or unclear.
Explanation:
FDI registration is quick — usually within 3 days — unless documents are incomplete or other agencies need to give inputs.
64. The issuance of an FDI Registration Certificate shall not be construed as approval of the proposed business.
Explanation:
Getting the registration certificate is only step one — it doesn’t mean the business can start. Approvals and permits are still needed.
65. The final approval remains contingent on obtaining all required clearances or permits.
Explanation:
You must get all sector-specific permits (e.g., environmental, tourism) before starting operations.
66. The Department shall facilitate registered FDIs in obtaining clearances or permits from relevant agencies.
Explanation:
The Department acts as a facilitator, helping coordinate approvals from other government bodies.
67. The investor shall bear all the expenses related to project approval and the government shall not be held liable for expenses incurred by the investor including rejection of proposal.
Explanation:
Investors cover all costs (application fees, consultant fees, etc.) and can’t claim refunds if rejected.
Refusal of Registration Certificate
68. The Department shall inform the investor in writing, stating the grounds for refusal of the registration certificate within three working days.
Explanation:
If registration is refused, the Department must explain the reasons in writing within 3 days.
Validity and Renewal of Registration Certificate
69. The FDI Registration Certificate shall be valid for one year from the date of issue.
Explanation:
You have 1 year to proceed with project approval after registration.
70. The investor shall submit documents for project approval within the validity of the FDI Registration Certificate.
Explanation:
Approvals must be applied for before the certificate expires.
71. The Department may renew the FDI Registration Certificate for a maximum of two terms upon request of the investor on justifiable grounds.
Explanation:
The certificate can be renewed twice if there’s a valid reason for delay (e.g., permit processing delays).
72. The validity of the FDI Registration Certificate shall cease in the following circumstances:
(1) Surrender of the FDI Registration Certificate by the investor;
(2) Upon expiry of the validity period;
(3) Upon rejection of the proposed business;
(4) On issuance of formal project approval; or
(5) Upon cancellation by the Department.
Explanation:
Registration ends if you withdraw, it expires, your project is rejected, you get project approval, or the Department cancels it.
73. After the expiry of the validity of the registration certificate, the investor may resubmit the application if they wish to pursue the same FDI proposal.
Explanation:
If the certificate lapses, you can reapply from scratch.
Amendment of Registration Certificate
74. FDI Business may apply to the Department for amendment of the FDI Registration Certificate.
Explanation:
If details change (e.g., shareholder info, project site), you can request changes.
75. The Department shall either accept or reject the application within two working days.
Explanation:
Decisions on amendments are fast — 2 working days.
Company Incorporation
76. The investor shall incorporate the proposed business under the Companies Act of Bhutan 2016 upon receipt of the FDI Registration Certificate.
Explanation:
After registration, you must legally form your company under Bhutanese company law.
Business Approval
77. The Department shall review and approve FDI projects within five working days from the date of submission of the business plan and required sectoral clearances.
Explanation:
Once all documents and permits are ready, project approval should be given within 5 working days.
78. The Department shall delegate the Invest Bhutan Division to expedite the approval of priority sector projects.
Explanation:
Priority sector projects get fast-tracked via the Invest Bhutan Division.
79. The Invest Bhutan Division shall approve priority sector project proposals within three working days from the date of receipt of such complete documents.
Explanation:
For priority sectors, final approval is even faster — within 3 days.
Rejection of Proposed Business
80. FDI business proposal shall be rejected if:
(1) The proposed project does not meet the approval criteria or conform to these Rules and Regulations and other laws of the country; or
(2) Sectoral clearance has been denied.
Explanation:
If your project violates laws or fails to get sector-specific approvals, it will be rejected.
81. The Department shall communicate with the investors in writing, stating the grounds for rejection of approval within five working days.
Explanation:
If rejected, you’ll get an official written reason within 5 days.
Amendment
82. FDI business may apply to the Department for amendment of any information of the approved project.
Explanation:
Changes to an approved project (scope, capital, location, etc.) need Department approval.
83. The Department shall approve or reject the proposed correction within five working days.
Explanation:
Decisions on amendments to approved projects come within 5 working days.
Business License
84. A business license shall be obtained online upon payment of the applicable license fee within one month from the date of approval of the project.
Explanation:
After project approval, you must get your business license within a month.
85. The business license shall be valid only for one year from the date of issue and may apply for renewal annually.
Explanation:
Licenses last one year and must be renewed yearly to keep operating.
CHAPTER VII – DISPOSAL OF INVESTMENT
Transfer of Shares
86. Transfer of shares in an FDI Company shall be allowed in the following circumstances:
(1) A foreign investor to a domestic investor and among domestic investors in an FDI company.
(2) A foreign investor to another foreign investor. However, if the transferee is a new investor, the transferor shall submit relevant documents to the Department as required at the time of obtaining the FDI Registration Certificate.
(3) A domestic investor to an existing foreign investor in the FDI Company.
Explanation:
You can transfer ownership in an FDI company in three ways:
Foreign to Bhutanese, or between Bhutanese.
Foreign to another foreign — but if the new foreign investor wasn’t part of the company before, the transferor must submit the same documents as a fresh FDI application.
Bhutanese to an existing foreign investor.
87. Transfer of shares may be permitted within the permissible range of minimum and maximum shareholdings.
Explanation:
After the transfer, ownership percentages must still comply with the sector’s foreign ownership limits.
88. The FDI Company shall submit the following documents to the Department while applying for the transfer of shares:
(1) Consent letter and/or share transfer agreement between transferor and transferee stating the number of shares, the face value of shares and the proposed transfer price;
(2) Last traded price from the stock exchange for publicly listed companies and mutually agreed share value between the transferor and transferee or share value as determined by chartered Accountant or valuation firms for other companies;
(3) Copy of the shareholders' resolution; and
(4) All such documents required for registration of a new foreign investor at the time of obtaining an FDI Registration Certificate if the proposed share transfer is to a new foreign investor.
Explanation:
To transfer shares, you must show proof of agreement, valuation, shareholder approval, and — if bringing in a new foreigner — the standard FDI registration documents.
89. The Department while assessing the application for transfer of share shall ensure that such request is in conformity to the FDI Rules and Regulations. An in-principle approval shall be accorded for the transfer within five working days from the date of submission.
Explanation:
The Department checks compliance and issues a preliminary approval within 5 days.
90. The Department shall issue a copy of the in-principle approval to the Royal Monetary Authority with a request to facilitate the repatriation where necessary.
Explanation:
This allows RMA to help transfer money abroad if the seller is foreign.
91. The FDI Company shall submit the evidence of payment of the agreed value to the transferor within one year from the date of in-principle approval.
Explanation:
The seller must be paid within a year, and proof must be given to the Department.
92. The Department shall issue final approval for the transfer of shares upon receiving the documentary evidence and notify the Corporate Regulatory Authority for processing the statutory transfer of shares.
Explanation:
Final approval happens after payment proof, and then the official company records are updated.
93. When the transfer of shares takes place from a foreign investor to a domestic investor and if such transfer results in the winding up of the FDI company, the investors shall apply for winding up prior to repatriating the capital.
Explanation:
If selling to locals means the company is no longer an FDI, winding-up procedures must happen before taking money abroad.
94. All FDI publicly listed companies shall transfer the shares through the stock exchange subject to approval from the Department.
Explanation:
If the FDI company is publicly traded, share transfers must go through the stock exchange.
Winding up or Liquidation
95. FDI companies shall wind up as per the Companies Act of Bhutan, 2016 and other relevant laws.
Explanation:
Closing the business must follow Bhutan’s company laws and other relevant laws.
96. The FDI Company shall apply for winding up or liquidation of the Company to the Registrar of Companies upon approval by the Department.
Explanation:
The Department must approve before applying to the Registrar of the Companies for closure.
97. Repatriation of capital resulting from winding up or liquidation shall be allowed upon submitting following documents to the Royal Monetary Authority:
(1) Tax clearance certificate;
(2) Certificate confirming that all liabilities in the country have been either fully paid or adequately provided for;
(3) Certificate to the effect that the winding up is in accordance with the provisions of the Companies Act or other relevant laws.
Explanation:
To take capital out after liquidation, the company must show it’s paid taxes, cleared all debts, and followed the law in closing.
CHAPTER VIII – FACILITATION OF FOREIGN DIRECT INVESTMENT
Economic Development Board
98. There shall be an Economic Development Board constituted which shall be the apex body for the facilitation and promotion of FDI and enhancement of coordination among stakeholders.
Explanation:
A high-level government board (Economic Development Board) oversees FDI promotion and coordination.
99. The Prime Minister shall be the Chair and the board shall comprise members from relevant Government agencies and the private sector.
Explanation:
The board is led by the Prime Minister and includes both public and private representatives.
Functions of the Economic Development Board
100. The Economic Development Board shall:
(1) Deliberate on matters relating to FDI regulatory environment and provide directives and recommendations;
(2) Identify measures to enhance service delivery and foster a “Whole of Government” approach to FDI promotion;
(3) Oversee and enhance investment promotion activities; and
(4) Review and revise the Schedules as and when necessary.
Explanation:
The board sets FDI policy directions, improves services, promotes investment, and can update the lists of priority/negative sectors.
101. The Department shall serve as the secretariat to the Economic Development Board.
Explanation:
The Department of Industry provides administrative support to the Board.
Single Window Services
102. The Invest Bhutan Division shall function as an Investment Promotion Agency and point of contact for all FDIs. The division shall coordinate with relevant agencies through FDI focal officials to provide the required services.
Explanation:
Invest Bhutan Division is the central contact point for investors, handling coordination with all relevant agencies.
103. Relevant agencies shall provide FDI services related to registration & licensing through an online system.
Explanation:
The relevant agencies of different kind of business should provide FDI services and the processes should be accessible online.
104. Relevant agencies shall accord priority to FDI projects and expedite clearances, permits, approvals, licenses or authorizations.
Explanation:
Government bodies/agencies must fast-track FDI applications.
105. The Department shall develop service charters in consultation with relevant agencies.
Explanation:
Service charters set timelines and standards for processing FDI requests.
106. The relevant agencies shall comply with the turnaround time provided under the service charter.
Explanation:
Agencies must follow the agreed deadlines.
FDI Focal
107. The Ministry of Industry, Commerce and Employment in consultation with relevant agencies shall appoint an FDI focal in each agency who shall:
(1) Be the point of contact for services related to FDI;
(2) Coordinate and facilitate the processing and issuance of clearances;
(3) Coordinate visits of foreign investors or business delegations to the respective agency;
(4) Participate in relevant meetings or FDI events;
(5) Provide an update to the Ministry on sector policies, laws, and procedures related to FDI; and
(6) Provide support or input on issues for discussion in the Economic Development Board.
Explanation:
Every agency will have an FDI officer responsible for coordination, guidance, and reporting to ensure smooth investor interaction.
CHAPTER IX – POWER AND FUNCTIONS
Economic Development Board
108. The Economic Development Board reserves the right to permit FDI under terms and conditions that may be different from those specified herein.
Explanation:
The Board can approve special cases of FDI with rules that differ from the standard ones in the document — essentially allowing exceptions if justified.
Ministry
109. The Ministry is responsible for implementing these Rules and Regulations that shall govern the FDI regime, ensuring that FDI contributes positively to Bhutan’s economic development while aligning with national priorities and sustainable development goals.
Explanation:
The Ministry of Industry, Commerce & Employment oversees the whole FDI system, making sure it helps the economy and fits with Bhutan’s long-term goals.
Department
110. The Department shall:
(1) Decide on all proposals based on the provisions of these Rules and Regulations.
(2) Enter business premises to monitor compliance; or
(3) Impose fines and penalties as per these Rules and Regulations.
Explanation:
The Department of Industry reviews FDI proposals, checks that companies follow the law (even on-site), and enforces penalties if rules are broken.
Invest Bhutan Division
111. The Invest Bhutan Division with three functional sections namely the Investment Promotion and Advocacy, Investment Facilitation and Investment Support, and Monitoring and Aftercare sections shall serve as an Investment Promotion Agency and shall carry out the following functions:
(1) Develop and implement investment promotion strategies and action plans;
(2) Develop investment promotional tools;
(3) Facilitate investor targeting and marketing such as investment seminars, forums, and business delegations among others;
(4) Handle investor enquiries and facilitate investors’ visits;
(5) Liaise with missions abroad;
(6) Conduct investment mapping and project identification;
(7) One-stop services for sectoral clearances, authorizations, approvals or licenses by liaising with FDI focal points;
(8) Project handling such as appraisal, evaluation and approval;
(9) Handle grievances;
(10) Post-approval services;
(11) Investment retention and reinvestment;
(12) Provide policy recommendations;
(13) Conduct research on FDI including surveys and maintaining an information system; and
(14) Monitoring of investments.
Explanation:
The Invest Bhutan Division is the operational arm for FDI — attracting investors, helping them through approvals, solving problems, supporting existing investors, and gathering FDI data.
112. The Government shall provide adequate financial and human resources to carry out the functions under these Rules and Regulations.
Explanation:
The Government commits to staffing and funding the FDI promotion system properly.
CHAPTER X – MONITORING AND REPORTING
Monitoring
113. The Department in collaboration with competent authorities shall oversee FDI businesses as per relevant laws or other legal provisions.
Explanation:
FDI compliance is monitored jointly by the Department and other relevant agencies.
114. The Royal Monetary Authority shall monitor the use of foreign exchange, and maintain and share data on FDI flows as and when necessary.
Explanation:
RMA tracks how foreign currency is used and keeps records of FDI inflows/outflows.
115. The Department of Labour shall monitor the training and skills development of Bhutanese employees and maintain FDI specific information on employment.
Explanation:
Labour authorities ensure that Bhutanese workers are being trained and employed as committed.
116. The Ministry of Home Affairs shall monitor and maintain information on visas, permits and other immigration issues.
Explanation:
Immigration data for FDI-related personnel is kept and monitored by Home Affairs.
117. The Department of Environment & Climate Change under the Ministry of Energy and Natural Resources shall monitor the compliance of businesses related to the environment.
Explanation:
Environmental compliance for FDI projects is overseen by the relevant environmental agency.
118. The National Land Commission Secretariat shall monitor and maintain information on land and land related issues.
Explanation:
The Land Commission tracks and monitors FDI-related land leases and ownership structures.
Reporting
119. The FDI company or the management shall submit any FDI related information to the Department as prescribed.
Explanation:
FDI companies must regularly report business and investment data.
120. The FDI Company or the management shall provide information and details of their operation when sought by the Department or any competent authority.
Explanation:
If the Department or any relevant body asks for information, the company must provide it.
CHAPTER XI – DISPUTE SETTLEMENT
121. Any FDI business related disputes arising between the parties may be resolved mutually or as per the provisions of the joint venture agreement. If the disputes are not resolved, parties may resolve the dispute as per the Alternative Dispute Resolution Act of Bhutan or settle before the Royal Court of Justice of Bhutan.
Explanation:
Disputes should first be solved directly between the parties or using what’s agreed in the joint venture agreement. If that fails, they can use Bhutan’s Alternative Dispute Resolution system or go to court.
122. Parties may also pursue arbitration at recognized international arbitration institutions, contingent upon mutual agreement from both parties.
Explanation:
If both sides agree, disputes can be settled in international arbitration bodies.
CHAPTER XII – OFFENSES AND PENALTIES
Fines
123. FDI companies violating the provisions of these Rules and Regulations shall be subject to a fine of Nu. 20,000/- (Twenty-thousand only) on the first incident and within the stipulated time frame of 30 days for rectification.
Explanation:
The first violation carries a Nu. 20,000 fine, and the company has 30 days to fix the issue.
124. If FDI companies fail to pay or rectify within the stipulated time frame as provided under Rule 123, such companies shall be liable to pay double the amount so imposed.
Explanation:
If they miss the 30-day deadline, the fine doubles.
Repeated Offender
125. If an FDI company commits any offence more than twice under these Rules and Regulations, such a company shall be treated as a repeated offender and shall be liable to pay a fine of Nu. 50,000 (fifty-thousand only).
Explanation:
More than two violations lead to a higher fixed fine of Nu. 50,000.
Suspension
126. FDI business may be suspended if:
(1) Engages in activities other than the approved business;
(2) Breaches any conditions specified in the approval or sector clearance; or
(3) Continuously fails to rectify the violation within the stipulated time frame.
Explanation:
Breaking approval conditions, operating outside the approved scope, or ignoring fixes can get your business suspended.
127. The suspension under Rule 126 shall continue to apply until the payment of the imposed fine or such breach has been rectified by the FDI Company.
Explanation:
Suspension lasts until the problem is fixed and any fines are paid.
Cancellation
128. The FDI Business License shall be canceled if:
(1) The company breaches any laws of the country; or
(2) Investors or the company’s management personnel engage in an activity that is against the national interest or the security of the country.
Explanation:
Serious legal breaches or threats to national interest can lead to total license cancellation.
129. The Department shall notify the relevant agencies if any business licenses are canceled under these Rules and Regulations.
Explanation:
Other agencies are informed when a license is canceled.
130. FDI business shall commence winding up as per the Companies Act of Bhutan 2016 upon the cancellation of their business license.
Explanation:
If your license is canceled, you must close the company legally.
Appeal
131. An aggrieved person or party may appeal to the Minister regarding any decision made by the Department under these Rules and Regulations within 10 working days.
Explanation:
If you disagree with the Department’s decision, you can appeal to the Minister within 10 working days.
132. The Minister may either conduct an inquiry or appoint an independent review committee to review the decision passed by the Department.
Explanation:
The Minister decides whether to review personally or use a committee.
133. The Minister may confirm, modify or annul the original administrative decision within 30 working days from the date of appeal.
Explanation:
Within 30 days, the Minister will make the final call on the appeal.
CHAPTER XIII – MISCELLANEOUS
Interpretation
134. In case of any differences in the interpretation of these Rules and Regulations, the Ministry’s interpretation shall be final and binding.
Explanation:
If there’s disagreement over meaning, the Ministry’s view prevails.
Immunity
135. No action shall lie against the Department or any officers working for the Department in respect of any act done or omitted in good faith in the execution of the functions under these Rules and Regulations.
Explanation:
Officials are protected from lawsuits for honest actions under these rules.
136. Such immunity shall not cover corrupt acts committed by any employee in connection with the discharge of his or her official duties.
Explanation:
Corruption is not protected — wrongdoers can still be prosecuted.
Revision
137. The Lhengye Zhungtshog may review and revise these Rules and Regulations in consultation with relevant ministries or agencies.
Explanation:
The Cabinet can amend the rules when needed.
Definition
138. For the purpose of these Rules and Regulations:
1. Convertible Currency means a currency declared by the Royal Monetary Authority that is freely usable and exchangeable in the international foreign exchange markets.
2. Downstream Project means a project that uses the output from an existing project as its main input.
3. FDI Company means a company incorporated in Bhutan in which the foreign investor holds a minimum of 20 percent of the total equity (or 10 percent in case of foreign institutional investors) and which is registered with the Department as an FDI company.
4. Foreign Direct Investment means investment made by a foreign investor in an FDI company in accordance with these Rules and Regulations.
5. Foreign Investor means a non-Bhutanese individual, firm, company, corporate body or any other legal entity incorporated outside Bhutan making an investment in Bhutan.
6. Foreign Institutional Investor means a foreign corporate body, fund, trust or any other legal entity investing in Bhutan.
7. Joint Venture means a business arrangement where two or more parties, at least one of whom is a foreign investor, pool their resources for the purpose of accomplishing a specific task, sharing risks and returns.
8. Ministry means the Ministry of Industry, Commerce and Employment.
9. Negative List means the list of activities not open to foreign direct investment as specified in Schedule III of these Rules and Regulations.
10. Priority Sector means sectors specified in Schedules I and II of these Rules and Regulations eligible for incentives and fast-track approvals.
11. Project Cost means the total cost of the project including land, buildings, machinery, equipment, vehicles, pre-operative expenses, working capital margin and other related expenses.
12. Royal Government means the Royal Government of Bhutan.
13. Sectoral Clearance means approval issued by a competent authority for a specific activity.
14. Transfer of Shares means the transfer of ownership of shares from one person to another in accordance with the Companies Act of Bhutan 2016 and these Rules and Regulations.
SCHEDULE I – Priority Sector List (Production & Manufacturing)
1. Floriculture, Horticulture, Animal Husbandry, Aquaculture, Apiculture, and Seed Production
Explanation:
These activities cover commercial-scale farming of flowers (floriculture), fruits and vegetables (horticulture), raising animals for products like meat, milk, or wool (animal husbandry), fish and seafood farming (aquaculture), beekeeping for honey and other bee products (apiculture), and producing seeds for agriculture. Foreign investors can own 100% of the business, with a minimum investment of Nu. 20 million. The projects must follow Bhutan’s agriculture and environmental regulations. For example, a fully foreign-owned trout farm, orchid export business, or large-scale honey production facility could be set up under this category.
2. Fruit & Vegetable/Food Processing
Explanation:
This category allows processing of fruits, vegetables, and other foods into value-added products such as juice, jam, pickles, dried produce, or ready-to-eat meals. The minimum investment is Nu. 10 million, and foreign ownership is capped at 74%, meaning at least 26% of the shares must be held by Bhutanese citizens. This ensures local participation in food processing businesses. For example, a foreign partner could invest in a chilli pickle factory using Bhutanese produce but must share ownership with a local partner.
3. Plantation Crops (Coffee, Tea, etc.)
Explanation:
This refers to cultivating crops grown over a long cycle, such as coffee, tea, rubber, cardamom, or other commercial plantation crops. Foreign ownership can be 100%, and the minimum investment is Nu. 20 million. Investors can establish fully foreign-owned plantations as long as they comply with environmental and land use laws. For example, a foreign-owned organic tea plantation in the southern foothills could qualify under this category.
4. Renewable Energy (Solar, Wind, etc.)
Explanation:
This covers projects generating energy from renewable sources like solar, wind, biomass, and small hydropower. The minimum investment is Nu. 20 million, but the ownership limit depends on the government’s energy policy for that specific project type. These projects require separate approvals from energy authorities. For example, a foreign company could set up a wind farm, but ownership might be capped depending on national energy sector rules.
5. Manufacturing (Electronics, Building Materials, Pharmaceuticals, etc.)
Explanation:
This category includes producing goods such as electronics, building materials (cement, bricks, tiles), pharmaceuticals, and other manufacturing outputs. The minimum investment is Nu. 40 million, and foreign ownership is limited to 74%. This ensures local participation while allowing significant foreign involvement. For example, a foreign investor could set up a tile manufacturing plant with 74% ownership and a Bhutanese partner holding the rest.
SCHEDULE II – Priority Sector List (Services)
1. Primary/Secondary/Tertiary Education
Explanation:
This includes setting up and running schools at the primary level. The minimum investment is Nu. 200 million, and foreign ownership is capped at 74%. A Bhutanese partner must own at least 26% of the shares. For example, an international school brand could open a primary school in Bhutan in partnership with a Bhutanese investor.
2. Technical/Vocational Training
Explanation:
Covers training institutions that teach specific skills such as carpentry, welding, culinary arts, hospitality, IT, or tourism. The minimum investment is Nu. 30 million, with foreign ownership limited to 74%. For example, a hospitality skills academy could be set up by a foreign investor with a Bhutanese partner.
3. Multi-specialty Hospital
Explanation:
Hospitals offering a wide range of specialized medical services, such as surgery, cardiology, and orthopaedics. The minimum investment is Nu. 400 million, and 100% foreign ownership is allowed. This means a foreign medical group could own and operate the hospital entirely.
4. Specialized Health Services
Explanation:
Covers focused medical services like dental care, eye hospitals, dialysis centres, or fertility clinics. The minimum investment is Nu. 25 million, with foreign ownership capped at 74%. For example, a dental hospital chain could set up operations with a Bhutanese partner.
5. Five-Star Hotel/Resort
Explanation:
Luxury hotels or resorts meeting five-star standards. The minimum investment is Nu. 200 million, and 100% foreign ownership is allowed. For example, a luxury international hotel chain could fully own a five-star eco-resort in Bhutan.
6. Four-Star Hotel
Explanation:
Hotels rated four stars under Bhutan’s classification. The minimum investment is Nu. 50 million, and foreign ownership is capped at 74%. For example, a regional hotel brand could partner with a Bhutanese investor to operate a four-star property.
7. Air Transport (Airlines, Helicopters)
Explanation:
Includes passenger airlines, cargo airlines, and helicopter services. The minimum investment is Nu. 200 million, and 100% foreign ownership is allowed, subject to aviation regulations. For example, a foreign helicopter tour company could operate fully in Bhutan.
8. IT Parks, Airports, Large Townships
Explanation:
This category involves large-scale infrastructure projects such as building IT parks, airports, or integrated township developments. The minimum investment is Nu. 200 million, and full foreign ownership is allowed. For example, a foreign investor could fully develop and own an IT park in partnership with the government.
9. IT Services (Inside IT Park)
Explanation:
Refers to IT-related businesses within designated IT parks. The minimum investment is Nu. 3 million, and 100% foreign ownership is allowed. For example, a software development company could set up an office in Bhutan’s IT Park with full foreign ownership.
10. IT Services (Outside IT Park)
Explanation:
Same as above but located outside designated IT parks. The minimum investment is NA million, and foreign ownership is capped at 100%.
11. Waste Management
Explanation:
Includes recycling facilities, waste-to-energy plants, and hazardous waste treatment centres. The minimum investment is Nu. 25 million, and foreign ownership is capped at 74%. For example, a recycling company could operate with a Bhutanese partner.
SCHEDULE III – Negative List (Activities Not Open to FDI)
1. Media and Broadcasting – No foreign ownership is allowed in newspapers, radio stations, television channels, or similar media outlets to protect cultural and informational sovereignty.
2. Retail and Wholesale Trade – Includes general stores, dealerships, and wholesale distribution. Closed to FDI to protect local traders.
3. Standalone Mining of Raw Minerals – Mining for export without value addition is prohibited for foreign investors.
4. Basic Mineral Processing – Activities limited to crushing or powdering minerals are not open to FDI; only advanced processing is considered.
5. Hotels Below Four-Star – To align with Bhutan’s “high-value, low-volume” tourism policy, only four-star and above hotels are open to foreign investment.
6. General Health Clinics – Basic, non-specialized healthcare services are reserved for Bhutanese ownership.
7. Industries Failing Certificate of Origin Rules – If products cannot qualify as Bhutanese-origin goods, the industry cannot have foreign investment.
8. Real Estate Trading – Buying and selling property for profit is prohibited for foreign investors.
9. Any Activity Banned by the Royal Government – Any sector explicitly prohibited by law or policy remains closed to FDI.
The Bhutan FDI Rules and Regulations 2025 strike a balance between attracting quality foreign investments and safeguarding national priorities. By setting clear minimum investment thresholds, defining ownership limits, and identifying priority sectors, the rules encourage projects that contribute to Bhutan’s economic diversification, technological advancement, and job creation.
Priority sectors enjoy faster approvals and, in some cases, full foreign ownership, reflecting the government’s commitment to promoting high-value industries. At the same time, the negative list ensures that sensitive sectors remain under domestic control.
For investors, understanding these schedules is crucial before planning any project in Bhutan. The combination of open sectors, partial-ownership sectors, and closed sectors means that careful selection of the business activity, appropriate structuring with Bhutanese partners where necessary, and compliance with investment thresholds will determine the success of the application process. By aligning projects with the sectors and conditions set out in the schedules, foreign investors can position themselves to contribute meaningfully to Bhutan’s economic development while benefiting from a stable and transparent investment environment.
