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Starting a business in Bhutan : Guide

Staff Reporter | 11:47 PM |

Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.

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 from World Bank: Doing Business 
No.ProcedureTime to CompleteAssociated Costs
1Obtain a security clearance from the Royal Bhutan Police1 weekno charge
2The company submits project proposal to Industrial Development Services Division (IDSD), Project Development Services Division4 days for activities requiring no sector / environmental clearance; up to 6 months for activities requiring sector clearanceBTN 600
3Register with the Registrar of Companies3 daysBTN 2000
4Apply for a trade/industrial license at the Regional Trade and Industrial Office (under Ministry of Economic Affairs)2 daysRegistration fee, license fee, booklet charge (see comment)
5Apply for taxpayer identification number and register the company for specific taxes1 - 3 daysno charge
6Make a company seal1 dayBTN 879
* 7Open a bank account1 day (simultaneously with previous procedure)no charge
* 8File the evidence of operating a bank account with the Registrar of Companies1 day (simultaneously with previous procedure)no charge
* Takes place simultaneously with another procedure.