ABOUT BHUTAN 

 Amongst all the countries in South Asia, Bhutan, officially the Kingdom of Bhutan, is a landlocked country nestled in the Eastern Himalayas. It is renowned for its unique philosophy of Gross National Happiness (GNH), its pristine natural environment, and its deeply preserved Buddhist culture, often referred to as the “Last Shangri-La.” Bhutan consciously pursues a development path that balances economic growth with cultural preservation, environmental conservation, and good governance. The capital of Bhutan is Thimphu, which is its largest and most populated city, serving as the country’s primary economic, cultural, and political hub. According to the report of the World Bank, Bhutan has been classified as a Lower-Middle Income Economy. The currency of Bhutan is the Bhutanese Ngultrum (BTN), which is pegged at par with the Indian Rupee (INR). As of today’s exchange rates (June 2025), 1 BTN is approximately 1.00 Indian Rupee. The population of Bhutan is approximately 0.8 million (800,000) in 2024. Its neighbouring countries are India to the south, east, and west, and China to the north. Being a landlocked country, Bhutan does not have direct maritime borders, relying primarily on India for access to international sea routes and seaports (e.g., Kolkata). The official language of the country is Dzongkha. English is very widely used and understood, especially in education, business, and government sectors. The vast majority of the population adheres to Vajrayana Buddhism, which is the state religion, with a minority practicing Hinduism. Currently, Bhutan has one international airport, Paro International Airport (PBH), which is the primary international gateway. As a landlocked country, Bhutan utilizes road networks for international trade, primarily through its border points with India, and relies on Indian seaports for global maritime transport.

The standard corporate income tax rate in Bhutan is generally 30% of net profits. Bhutan’s approach to foreign direct investment (FDI) is guided by its Gross National Happiness (GNH) philosophy, prioritizing investments that are environmentally sound, culturally appropriate, socially responsible, and economically viable. Incentives may include tax exemptions or reduced rates for certain approved projects, especially in hydropower, high-value tourism, and technology sectors, provided they meet strict criteria for sustainability and contribute positively to GNH. The Foreign Direct Investment Division under the Department of Industry is the primary government body promoting and assisting foreign direct investment. Opesh Group of companies will be helping you in completing the Due Diligence process which includes financial planning, registration process, business options, and if required, even helping you find a Rental property for your office.

Establishing a business in Bhutan involves navigating regulations that prioritize sustainable development and GNH principles. While foreign direct investment is encouraged, it is subject to a careful screening process to ensure alignment with national objectives. Foreign investors planning to start a business in Bhutan can form various company types, with Private Limited Companies being common. 100% foreign ownership is possible in some approved sectors, but joint ventures with Bhutanese entities are often preferred or required, especially in strategic or sensitive areas like high-end tourism and certain industries. Bhutan’s legal framework aims to provide a stable yet carefully controlled environment for businesses.

In case an investor is planning to establish a corporate business setup in Bhutan, Opesh Group will be helping you in taking the right decision for setting up your business in Bhutan and we will also guide you about how to follow the procedure while formulating your company in Bhutan.

Types of Business which can be started in Bhutan:

• Hydropower: As the main revenue generator, opportunities exist in developing new hydropower projects and associated infrastructure, often in collaboration with the government.
• High-Value, Low-Impact Tourism: Bhutan focuses on high-end tourism. Opportunities exist in developing luxury resorts, eco-lodges, specialized cultural tours, and wellness tourism, adhering to strict sustainability guidelines.
• Agriculture & Agro-processing: With a strong emphasis on organic farming, opportunities exist in modernizing agricultural practices, processing organic produce (e.g., fruits, vegetables, spices), and developing value-added food products.
• ICT & Digital Services: Bhutan is investing in digital transformation. Opportunities are emerging in software development, IT services, data centers, and digital education platforms.
• Niche Manufacturing: Opportunities exist in small-scale, environmentally friendly manufacturing of specific products like handicrafts, construction materials, and specialized food products.
• Education & Healthcare: Development in specialized educational institutions and healthcare services, particularly those that can cater to both domestic needs and potentially draw regional clients.

Advantages of Starting Business in Bhutan:

• Unique Brand Identity: Associated with Gross National Happiness, environmental preservation, and cultural authenticity, offering a strong niche market appeal.
• Political Stability: A stable monarchy and democratic government provide a secure operating environment.
• Pristine Environment: Commitment to carbon neutrality and environmental protection attracts eco-conscious businesses and tourists.
• Access to Indian Market: Close economic ties with India, including duty-free trade for many products.
• Hydropower Potential: Abundant clean energy resources.
• High-Value Tourism Sector: Focus on sustainable, high-revenue tourism.
• Growing Focus on Digitalization: Government initiatives to develop ICT infrastructure and services.

Business Opportunities for Indians in Bhutan: There are excellent business opportunities in Bhutan for new investors who are planning to start their business abroad. Bhutan’s unique development model, focus on sustainability, and close ties with India make it an attractive market for specific types of investments. Indian investors with strengths in hydropower development (often through public-private partnerships), high-end tourism infrastructure, organic agro-processing, education services, and sustainable technology solutions, can find significant avenues for investment, partnerships, and market entry, especially projects that align with Bhutan’s GNH philosophy and environmental commitments.

Imports & Exports: Many goods are imported and exported from Bhutan. Imports and exports business is an ever-growing business in any country; however, you need to do proper R&D before investing in that product which you can import or export. You need to check whether that product is suitable for your target market and how much revenue you will be able to generate from that market.

Major items which are exported from Bhutan:

• Hydroelectric power (to India)
• Ferroalloys
• Cement and clinker
• Agricultural products (potatoes, oranges, cardamom, apples)
• Dolomite and other mineral products
• Handicrafts

Major items which are imported in Bhutan:

• Diesel and petrol
• Machinery and equipment
• Vehicles and transport equipment
• Rice and other foodstuffs
• Iron and steel products
• Textiles and apparel

Major items traded between Bhutan and India (as of 2023-2025 data):

• Exports from Bhutan to India: Hydroelectric power, ferroalloys, cement, dolomite, agricultural products (potatoes, oranges).
• Imports in Bhutan from India: Petroleum products, machinery, vehicles, food items, construction materials, electrical equipment.

Manufacturing: Manufacturing in Bhutan is relatively small-scale and environmentally conscious. Strengths exist in agro-based industries (e.g., fruit processing, distilleries), forest-based industries, mineral-based industries (cement, ferroalloys), and the production of traditional handicrafts. The sector is evolving towards higher value-added, sustainable production methods.

Mining: The mining business in Bhutan is limited and strictly regulated due to environmental considerations. It primarily involves the extraction of minerals for domestic consumption and export, such as limestone, gypsum, dolomite, and some small-scale coal. Opportunities exist in responsible extraction and processing that adhere to the country’s stringent environmental protection policies.

Major Indian companies which are currently working in Bhutan: Due to close bilateral ties, Indian companies have a significant presence, particularly in key sectors.

• Hydropower Development: Indian public sector undertakings like NHPC (National Hydroelectric Power Corporation) and SJVN (Satluj Jal Vidyut Nigam) are extensively involved in major hydropower projects through joint ventures with Bhutanese entities.

• Banking: Punjab National Bank operates branches in Bhutan.

• Construction & Infrastructure: Various Indian construction companies are involved in infrastructure projects, particularly roads and bridges, often funded or supported by the Indian government.

• Trade & Commerce: Numerous Indian trading houses and businesses are involved in cross-border trade, facilitating the import of goods into Bhutan and export of Bhutanese products to India.

• GDP = $3.5 billion (nominal, 2024 est.)

• GDP Growth = 5.0% (2024 est.), 6.5% (2025 forecast by IMF)

• Ease of doing business rank = The World Bank’s ‘Doing Business’ report has been discontinued. However, Bhutan continues to focus on improving its business environment, though its unique Gross National Happiness development philosophy guides investment criteria, prioritizing sustainability and social responsibility.

• GDP per Capita = $4,200 (nominal, 2024 est.)

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