Gelephu Mindfulness City (GMC), also known as Gelephu Special Administrative Region (GeSAR), represents a groundbreaking initiative by the Kingdom of Bhutan to establish a unique economic hub. Envisioned as the world's first global model of regenerative, values-based urban development, GMC is designed to attract international investment by integrating sustainability, Bhutanese culture, and spirituality with modern infrastructure. This article, drawing insights from official sources and reports such as those published in The Bhutanese newspaper, provides a comprehensive overview for potential investors, highlighting the strategic advantages, regulatory framework, and unique value proposition of GMC.

Strategic Location and Vision

Strategically located in Gelephu, Bhutan, on the border with India, GMC aims to leverage regional connectivity between South Asia and Southeast Asia. This prime location positions it as a vital economic corridor, facilitating trade and investment flows across the region. The city is planned to cover an expansive area of 2,500 square kilometers, which is approximately three times the size of Singapore .

The vision for Gelephu Mindfulness City was unveiled by His Majesty King Jigme Khesar Namgyel Wangchuck on December 17, 2023, during the 116th National Day celebration . The King's vision is to create a distinct special administrative region with its own unique laws and systems, fostering a business-friendly environment while upholding Bhutan's core values of sustainability, culture, and spirituality. The city is designed to be plastic-free, with modern, urban, low-rise, eco-friendly buildings. A key focus is on attracting global investment to establish a clean technology innovation hub. All food within GMC will be sourced from organic farms, and electricity will be generated from renewable sources. The urban design promotes cycling and aims to foster advancements in Artificial Intelligence (AI) .

This ambitious project has garnered significant international attention and endorsement from prominent figures, including Nobel laureates Joseph Stiglitz and Michael Spence, renowned architect Bjarke Ingels, and Snap Inc. CEO Evan Spiegel, all of whom expressed their support at the Bhutan Innovation Forum in 2024.

Taxation and Incentives: A Cornerstone of GMC's Appeal

One of the most compelling aspects for potential investors considering Gelephu Mindfulness City is its exceptionally favorable and streamlined tax regime. Designed to foster a pro-business environment, GMC operates under a unique one-tier corporate tax system, ensuring simplicity and efficiency. This means that taxation is applied solely at the corporate level, with no further taxes levied on the distribution of dividends, a significant advantage for maximizing investor returns and encouraging reinvestment within the city.

Key Tax Provisions and Benefits:

• Corporate Tax Rate: A highly competitive rate of 17 percent is applied to corporate profits. This rate is designed to be attractive to a wide range of businesses, promoting profitability and growth.

• Capital Gains Tax: Investors benefit from a zero percent capital gains tax. This provision is particularly appealing for long-term investors, as it ensures that profits from the sale of assets or investments within GMC are not subject to additional taxation, thereby enhancing overall returns.

• Withholding Tax on Dividends: Crucially, there is zero percent withholding tax on dividends. This policy ensures that investors receive their full dividend payouts without any deductions at the source, further boosting the attractiveness of GMC for equity investments.

• Royalties and Interest: While the primary focus is on corporate and investment income, it is important to note that royalties are taxed at 10 percent, and interest at 15 percent.

Beyond these direct tax rates, GMC offers potentially applicable tax incentives that are meticulously designed to be commensurate with the level of substance and activity of a company's proposed operations. These incentives are a strategic tool to encourage high-value investments, foster innovation, and drive economic growth within the city. A notable and highly beneficial provision is the allowance for an indefinite carry-forward of losses. This provides long-term financial stability and flexibility for businesses, allowing them to offset future profits with past losses, thereby reducing their overall tax liability over time.

This progressive tax framework underscores GMC's commitment to creating a supportive and financially attractive ecosystem for both domestic and international investors.

Legal and Regulatory Framework

The legal and regulatory framework within Gelephu Mindfulness City is designed to be robust, transparent, and business-friendly, drawing upon established international best practices. The system combines Singapore's common law principles for business regulations with the financial services regulations adopted from the Abu Dhabi Global Market (ADGM).

Specifically, GMC has adopted the Financial Services and Markets Regulations 2015 (FSMR) from ADGM for the regulation of financial services. This ensures a familiar and reliable regulatory environment for international financial institutions and investors. The broader legal system in GMC incorporates Singaporean laws for most commercial matters through GMC Law No. 1 of 2024, also known as the Application of Laws Act 2024. This unique blend of legal frameworks aims to provide a stable and predictable environment for businesses, while also allowing for flexibility and innovation within the special administrative region.

GMC authorities are committed to adopting international best practices across all their operations, ensuring that the regulatory environment is aligned with global standards of governance and compliance.

Business Setup: Navigating Registration and Compliance in GMC

Establishing a business in Gelephu Mindfulness City is designed to be a streamlined and transparent process, facilitated by dedicated regulatory bodies committed to fostering a conducive investment environment. The primary entity responsible for company registration and ensuring ongoing compliance is the Gelephu Corporate Registration Office (GCRO). This office acts as a central point for all business registration activities, ensuring efficiency and clarity for investors.

The Business Setup Process:

1. Initial Assessment by Gelephu Mindfulness City Authority (GMCA): Before formal registration, prospective businesses undergo an initial assessment by the Gelephu Mindfulness City Authority (GMCA). The GMCA plays a crucial role in determining if the proposed business aligns with the city's core industries, strategic objectives, and the overarching vision of GMC. This step ensures that new ventures contribute meaningfully to the city's development and adhere to its values-based framework.

2. Online Application Submission: Once the initial alignment is confirmed, applicants are required to submit all specified documents via a user-friendly online incorporation form. This digital-first approach significantly simplifies the application process, reducing bureaucratic hurdles and enabling swift submission from anywhere in the world.

3. Facilitated Review and Resolution by GCRO: The GCRO is committed to a proactive approach in reviewing applications. Should there be any deficiencies or open issues in the submitted documentation, the GCRO will actively engage with applicants to resolve these. This collaborative approach ensures a smooth and efficient approval process, minimizing delays and providing clear guidance to investors.

4. Formal Approval and Certification: Upon successful review and the payment of requisite incorporation fees to the GCRO, businesses receive formal certification. This includes:

 • A Certificate of Incorporation: Legally establishing the entity within GMC.

 • A Certificate of Registered Business Name: Confirming the official name under which the business will operate.

•A Unique Entity Number (UEN): A distinct identifier for the business within the GMC regulatory framework.

These documents formally establish the business within Gelephu Mindfulness City, granting it the legal standing to commence operations. Both the GCRO and GMCA are committed to upholding principles of transparency, efficiency, and investor support throughout the entire registration and compliance lifecycle. Their collaborative efforts aim to create a predictable and supportive regulatory environment, empowering businesses to thrive and contribute to GMC's growth.

Recent Developments and Future Outlook

Gelephu Mindfulness City is not merely a concept but a rapidly developing project with significant momentum. Launched in 2025 as a $100 billion development, GMC aims to significantly bolster Bhutanese economic prosperity while fostering spiritual well-being . The project is envisioned as a critical economic hub for Bhutan, strategically positioned to capitalize on the burgeoning economic corridor connecting South Asia and Southeast Asia.

The development emphasizes a sustainable urban creation model, seamlessly blending cutting-edge technology with traditional Bhutanese culture. This includes promoting eco-friendly transportation like walking and cycling, dedicating green spaces for meditation and relaxation, and integrating mindfulness-based education into the urban fabric. While the project is expected to take approximately a decade to complete, Bhutanese officials have underscored that the quality and integrity of the development are prioritized over strict adherence to a timeline.

Community involvement is a cornerstone of the GMC project, with citizens actively encouraged to join volunteer services, demonstrating a collective commitment to its success. Furthermore, the authorities have been proactive in refining investment criteria and submission deadlines, indicating a responsive and adaptive approach to attracting and facilitating foreign direct investment.

While the vision for GMC is overwhelmingly positive, some discussions acknowledge potential challenges, such as the ambitious scale of promises, considerations regarding land utilization, and the sensitive issue of potential displacement. However, the overall trajectory indicates a strong commitment to overcoming these hurdles and realizing the city's transformative potential.

Conclusion

Gelephu Mindfulness City presents a unique and compelling investment opportunity. Its strategic location, favorable tax regime, robust legal and regulatory framework, and commitment to sustainable and values-based development make it an attractive destination for global investors. While challenges inherent in any large-scale development exist, Bhutan's unwavering commitment to the project and its innovative approach to urban planning position GMC as a significant player in the future economic landscape of South Asia.

The city offers a stable, predictable, and highly supportive environment for businesses seeking to expand into a region poised for significant growth, all while aligning with principles of sustainability and social responsibility.

Disclaimer: Please note that the information provided in this article is sourced from legitimate and publicly available resources. While every effort has been made to ensure accuracy and relevance, this content is intended for general informational purposes only and does not constitute financial, legal, or investment advice.

Prospective investors are strongly advised to conduct their own due diligence and kindly verify all information, including but not limited to investment plans, tax implications, and regulatory requirements, directly with the relevant official agencies and authorities in Gelephu Mindfulness City or Bhutan. It is crucial to consult with qualified legal and financial professionals before making any investment decisions.

Basnet Attorneys and Law is not responsible for any investment decisions made based on the information presented herein, nor for any direct or indirect losses or damages that may arise from reliance on this content. Your investment decisions are solely your responsibility.