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
* Takes place simultaneously with another procedure.
This information was collected from World Bank: Doing Business
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Obtain a security clearance from the Royal Bhutan Police | 1 week | no charge |
| 2 | The company submits project proposal to Industrial Development Services Division (IDSD), Project Development Services Division | 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 | 3 days | BTN 2000 |
| 4 | Apply for a trade/industrial license at the Regional Trade and Industrial Office (under Ministry of Economic Affairs) | 2 days | Registration fee, license fee, booklet charge (see comment) |
| 5 | Apply for taxpayer identification number and register the company for specific taxes | 1 - 3 days | no charge |
| 6 | Make a company seal | 1 day | BTN 879 |
| * 7 | Open a bank account | 1 day (simultaneously with previous procedure) | no charge |
| * 8 | File the evidence of operating a bank account with the Registrar of Companies | 1 day (simultaneously with previous procedure) | no charge |