Gelephu Mindfulness City is opening its doors to international finance, offering tax incentives to attract capital and expertise. But businesses will have to do more than simply register in Gelephu. They must create jobs for Bhutanese, spend locally, and eventually base their operations in the city.
Gelephu Mindfulness City is opening its doors to a new type of business: companies that manage and invest money on behalf of others.
From 1st October, family offices and investment funds can set up in GMC and access a range of tax incentives. But there is a condition. They must bring part of their business, and the jobs that come with it, to Gelephu.
Under the new framework, businesses seeking the incentives must employ Bhutanese in their front and middle-office roles. At least two Bhutanese employees must be hired within the first three years. Larger businesses must hire at least three. The idea is to ensure these businesses do more than register in GMC.
GMC is also offering a simplified entry process. A single-family office will not need a separate licence. It only needs to notify the Gelephu Financial Services Office. Fund managers already licensed in recognised foreign jurisdictions can also manage GMC funds without obtaining a separate GMC licence.
But the benefits come with an accountability clause. If a business fails to meet the required conditions for two consecutive years, it will lose its tax benefits.
On the incentives: a fund with at least USD 10 M in assets pays no tax on investment income for the life of the fund, up to 15 years. Family offices get a 15-year exemption. Fund managers pay a concessionary rate of 5 or 10 per cent, and those approved before the end of 2027 pay no tax for their first five years.
Pang Yee Ean, Co-Chief Executive Officer of the GMC Authority, says the industry can bring international capital into Bhutan to support entrepreneurship, innovation and infrastructure.
GMC says the framework is designed to bring international capital into Bhutan while building local expertise in finance. For Gelephu, that could mean not just new investment, but a new pool of high-value financial careers for Bhutanese workers.
Passang Dorji/Karma Wangdi, Gelephu
