Investment Climate

The World Bank’s in its Investment Climate Assessment on Bhutan in 2010 has assessed Bhutan as being in a more favourable position than other South Asian countries. The investment climate in Bhutan is characterized by good progress in human development, good governance, stable political and very low-corruption environment and good labour productivity. Also the education level of Bhutan’s workforce is significantly better than regional standards. Investment in Bhutan is also advantageous with the most competitive electricity prices in Asia. Additionally, the free trade agreement with India gives Bhutan a preferential access to the large Indian market and easy access to skilled and unskilled labour from India.

Regulatory incentives

Regulatory incentives include (but are not limited to):

  • Equal benefits, incentives and guarantees for foreign investors and domestic companies;
  • Accelerated investment application and decision on foreign direct investments (FDI) proposal within forty-five (45) days of submission of completed application;
  • Fast tracking of approval and clearances of FDIs in priority list;
  • Up to 100% foreign ownership of companies in service sector;
  • Repatriation of capital and capital gains allowed in the currency of investment;
  • Allows expatriate employment;
  • No restrictions on the recruitment of unskilled and semi-skilled expatriate workers required for establishment of the industry;
  • Innovation/invention that results in patent registration of a new product or process shall be provided with a cash subsidy @ 50% of the expenditure incurred by the firm/institution/individual.

Financial and Tax incentives

  • Permitted to use 100% of convertible currency of earnings from direct export of their manufactured product and 80% of earnings from export of other products of Bhutanese origin for import of raw materials;
  • Corporate income tax holidays of up to 15 years;
  • Exemption of income tax on export earnings in convertible currency;
  • Grant made or expenses on R&D fully tax deductible;
  • Exemption of sales tax and custom duties for import of plant and machinery in manufacturing and service industries;
  • Reinvestment allowance, as tax deductible expenses, up to 25% of the total reinvestment;
  • Environmentally friendly technological upgrades shall be allowed income tax rebate of 15% of the up-gradation expenses;
  • Other incentives as per fiscal incentives 2010 of RGoB



Monetary policy

The Royal Monetary Authority (RMA) manages the monetary policy of the country. Bhutan follows fixed exchange rate system with Ngultrum pegged at par to the Indian Rupee in a conventional peg arrangement. The monetary policy operations are conducted through prudential controls and reserve to regulate credit expansion and its impact on Bhutan’s external position, price levels, and the health of the financial system. The RMA undertakes macro-prudential measures to deal with over exposure of the financial institutions to credit in concentrated sectors, including that of housing and personal loans.


Introduction to financing

Investors have access to both debt and equity financing from financial institutions in the country. Such financing is available to both domestic and foreign partners. In terms of access to convertible currency, domestic investors have access to foreign exchange in cases where foreign investor’s equity in the project is insufficient to meet the total requirement. Businesses are also allowed to borrow from abroad as per the External Commercial Borrowing provisions.

General Financing

Investors can have options of following local banks in general financing options;


Bank of Bhutan

The bank was incorporated by Royal Charter, 1968 and was incorporated under the Companies Act of Kingdom of Bhutan 2000 and the Financial Institution Act of Kingdom of Bhutan, 1992.

As the oldest Bank in Bhutan, BoB was established as the public sector commercial bank and today has a network of 26 branches and 3 extension counters with a paid up capital of Nu. 400 million (80:20). From 2004 until 2007, the market share of Bank of Bhutan was about 35 percent and it is expected to increase further. The Bank of Bhutan has last reported a reserve and surplus of Nu.2,426,798,780 in 2011 displaying a strong level of liquidity. It has Combined Foreign Currency Reserves worth Nu.1,640, 00,000. It also has Nu. 16,770,091,856.93 tied into investments, loans and advances in 2011. BoB has a current base Interest rate of 10.38%.


Bhutan National Bank

In 1995, due to a rapidly growing economy, the Government of Bhutan converted the Unit Trust of Bhutan, a financial institution tasked with promoting public savings and productive sectoral investment, into the commercial bank, Bhutan National Bank.


Bhutan National bank has last reported a reserve and surplus of Nu. 2,708,342,615 in 2011 displaying a strong level of liquidity as well. It has Combined Foreign Currency Reserves worth Nu. 587,400,000. Bhutan National Bank also has Nu. 17,246,059,335.14 tied into Investments, loans and advances in 2011. BNB has a current base rate of 10.7%.


Druk Punjab National Bank

Druk Punjab National Bank is the first FDI bank in Bhutan which is a joint venture bank of Punjab National Bank, India & Bhutanese promoters. DPNBL started its operations in Bhutan on 27th January 2010 and has three branches, which are located in Thimphu, Phuentsholing and Wangdue.

During the first year of operations, DPNBL managed to mobilize a strong +20000 customer base in Bhutan with total business crossing over Nu.5, 000,000,000. The total paid-up Capital of the bank is Nu.300 million, and as of the end of 2011, the capital fund total amounted to Nu. 504,420,000. Druk PNB currently has a base interest rate of 12.70%. The interest rates for loans related to tourism, manufacturing and industrial activity, is currently at 13%.


Tashi Bank

Tashi Bank is the newest private sector bank licensed by the Royal Monetary Authority of Bhutan under the Financial Institutions Act of Bhutan, 1992. It was established on March 12, 2010 and incorporated under the Companies Act of the Kingdom of Bhutan 2000. The Bank has been promoted by the eminent businessmen of Bhutan to foster competition which translates into enhanced personalized customer service and increased domestic savings and investments.


Intellectual Property Laws

The Industrial Property Act 2001 and the Copyright Act 2001 provides the legal framework for the protection of property rights in the country. Bhutan is a signatory to the WIPO (World Intellectual Property Organisation) Convention and a signatory to the following international conventions and protocols:

  1. a) Paris Convention for Protection of Intellectual Property;
  2. b) Madrid System for the International Registration of Marks and
  3. d) Berne Convention for the Protection of Literary and Artistic Works.


Cost of Doing Business

Residential, Commercial and Industrial Land Lease Rent

Lease rate in Nu. per sq.ft per annum for Government Reserved Forest Land (GRF)


1 Thimphu Thimphu 5 20 1 4
Khasadrapchu 1 3 0.5 1
2 Gasa Gasa 0.5 1 0.5 1
3 Wangdue Bajo/Wangdi 2 3 0.5 1
Nobding 0.5 1 0.5 1
Rurichu 0.5 1 0.5 1
4 Punakha Khuruthang 2 3 0.5 1
5 Haa Haa 2 3 0.5 1
6 Paro Tshongdue 2 4 0.5 1
Bondey 2 3 0.5 1
7 Tsirang Damphu 2 3 0.5 1








Tsimalakha 2 3 0.5 1
Gedu 2 3 0.5 1
Darla 0.5 1 0.5 1
Phunstholing 5 42 1 5










Dagana 1 2 0.5 1
Dagapela 0.5 1 0.5 1






Samtse 2 5 1 3
Gomtu 2 3 1 1
Sipsu 1 2 0.5 1




Sarpang 2 3 0.5 1
Gelephu 2 42 1 3
12 Trongsa Trongsa 2 3 0.5 1
13 Bumthang Dekiling 2 3 0.5 1






Zhemgang 2 3 0.5 1
Tingtibi 0.5 1 0.5 1
Panbang 0.5 1 0.5 1






Mongar 2 3 0.5 1
Gyelpoishing 1 2 0.5 1
Dremtse 0.5 1 0.5 1




Phaling 0.5 1 0.5 1
Autsho 1 2 0.5 1




Tashiyangtse 2 3 0.5 1
Duksum 0.5 1










Trashigang 2 3 0.5 1
Kanglung 2 3 0.5 1
Rangjung 1 2 0.5 1
Khaling 0.5 1 0.5 1
Wamrong 0.5 1 0.5 1




Denchi 0.5 1 0.5 1
Nganglam 1 2 0.5 1








S/Jongkhar 2 42 1 3
Deothang 1 2 0.5 1
Jomotshangkha (Daifam) 0.5 1 0.5 1
Samdrupcholing (Bhangtar) 0.5 1 0.5 1


Note: Lease rate for sports facilities and recreational parks shall be a token fee of Nu. 0.10 per sq. ft per annum.

R – Residential (shall include areas given for accommodation of construction workers and store for building construction).

C – Commercial (Business oriented activities)

S – Social (Government offices, Schools, Hospitals, Civil Societies Organizations).

I – Industrial: warehouse/open dump yard.


The period for leasing of government land shall be as follows:

  1. Temporary lease shall be processed for a maximum of 6 months.
  2. Short-term lease shall be processed for a maximum of 3 years and not renewable.
  3. Long-term lease shall be processed for maximum of 30 years.

Lease rate for Industrial Estate

Sl. No Industrial Estates Rate
1. Pasakha Industrial Estate NU. 4 per square feet per annum for the first three years.
In the fourth yr. the rate is Nu. 6.00 (i.e 50% increase on Nu. 4) from the fifth yr. onwards: annual increase of 3% on the preceding year’s rate.
2. Bjemina Industrial Estate Nu. 0.80 (i.e. 80 cheltrum) per square feet per annum.

Lease Rate for Mining Activities

The lease rate for mining activities is Nu. 640.00 per acre per annum. Types of minerals found in different locations are provided in the table below;


Sl. No. Types of Minerals Location(s)- Dzongkhag(s)
1 Gypsum Pemagatshel
2 Coal Samdrup Jongkhar
3 Dolomite Samtse
4 Limestone Samtse, Chhukha and Sarpang
5 Marble Paro and Thimphu
6 Quartzite Samtse and Chhukha
7 Talc Samtse
8 Slate Wangdue Phodrang
9 Granite Wangdue Phodrang
10 Iron ore Dagana (Lhamozingkha)
11 Shale (coloured slate) Dagana (Lhamozingkha)
12 Stone quarry Throughout the country


Electricity Tariffs

Customer Category 1st July 2012 to 30th June 2013
Low Voltage 0-100 kWh (Nu./kwh) Nu. 0.85
101-300 kWh (Nu./kWh) Nu. 1.62
300+ kWh (Nu./kWh) Nu. 2.14
LV bulk (Nu./kWh) Nu. 2.14
Medium Voltage Energy charge (Nu./kWh) Nu. 1.79
Demand charge (Nu./kW/month) Nu. 115
High Voltage Energy charge (Nu./kWh) Nu. 1.54
Demand charge (Nu./kW/month) Nu. 105

Water charges in municipal areas

  Below 20 M3 21-40 M3 More than 40 M3
Residential Nu. 2.45 Nu. 2.95 Nu. 3.70
Commercial Nu. 2.45 Nu. 3.45 Nu. 4.90
Sewerage charge 50% of the approved water service charge


Employee costs

Employee incomes vary according to the position and experience of the employee as elsewhere in the world. The country’s Minimum National Wage Rate (MNWR) is Nu. 150 per day. In addition, a monthly minimum 10% of the basic pay contribution must be made towards employee’s Pension and Provident Fund (5% by the employer and 5% by the employee).



Supporting Your Business


The Royal Government views public resource expenditures on education at all levels as vital investments to creating a productive national workforce and in advancing various other socio-economic objectives. The country’s 10th Five Year Plan laid a special emphasis on sustaining universal basic education including making education more relevant to the workplace to develop well-trained citizens. The number of bachelor degree graduates in 2012 increased by 36.5% from 1659 graduates in 2011[3], the largest increase so far. With the World Bank also reporting good labour productivity and workforce’s education level significantly better than the regional standard, Bhutan has talented pool of graduates that businesses can choose its workforce from.


The investors also have incentive in government’s vision of developing Bhutan into an international education hub in South-East Asia. The Education City project is being developed (a PPP project between the Government of Bhutan and two leading private players, Infrastructure leasing and Financial Services Ltd (ILFS) and Infinity Infotech Parks Ltd. from India), revolving around multiple world-class education institutes providing students with professional programs at a common campus. Expected to be completed by end of 2013 with a capacity of 40,000 students, the city will produce high quality skilled work force.


Air network

Drukair is the national airline, owned and managed by Druk Holding and Investments. It operates flights to Singapore, Bangkok, Kolkata, Bagdogra, Delhi, Bodhgaya, Kathmandu and Dhaka from its Head Quarters at Paro, a picturesque Valley in Western Bhutan. The capital, Thimphu is 45 minutes drive away. Bhutan inaugurated its first Domestic flight to Bumthang and Yonphula on 17 December 2011. This cuts down 2-3 days of Journey from western to Eastern part of Bhutan.

Drukair operates scheduled flights to the following destinations

 Country City Airport
Bangladesh Dhaka Zia International Airport





 Bagdogra  Bagdogra Airport
                      Delhi  Indira Gandhi International Airport
 Gaya  Gaya Airport
Kolkata  Netaji Subash Chandra Bose International Airport
 Guwahati  Lokpriya Gopinath Bordoloi International Airport
Mumbai Chatrapati Shivaji International Airport
 Nepal Kathmandu Tribhuvan International Airport
 Thailand  Bangkok  Suvarnabhumi International Airport
Singapore Singapore Changi International Airport
Bhutan Paro Paro International Airport

Railway Linkages

Technical studies on the alignment of the first every rail link between Bhutan and India connecting Phuntsholing (Bhutan) and Hashimara (India), called the Golden Jubilee Rail Line, has started. Also, feasibility study for railway lines in other three border towns has been earmarked in the 10th FY plan.

Road network

The following map shows the road network in the country and to the nearest India towns. The bordering Indian towns are the main trade links for Bhutan.






Monthly-postpaid rates


Package Name Circuit Bandwidth Monthly Tariff (Nu.) Data upload/download limit Additional usage charge per MB (Nu.)
Home Up to 512 Kbps 499.00 2.5 GB 0.19
Office Up to 1 Mbps 1599.00 8 GB 0.19
Enterprise Up to 2 Mbps 2999.00 15 GB 0.19


Monthly-prepaid rates


Package Name Circuit Bandwidth Monthly Tariff (Nu.) Data upload/download limit Additional usage charge per MB (Nu.)
Home Up to 512 Kbps 399.00 2.5 GB 0.19
Office Up to 1 Mbps 1499.00 8 GB 0.19
Enterprise Up to 2 Mbps 2499.00 15 GB 0.19


Tariff for corDECT WLL 128 Kbps Services


Package Name Circuit Bandwidth Monthly Tariff (Nu.) Data upload/download limit Additional usage charge per MB (Nu.)
CorDECT 128 Up to 128 Kbps 700.00 300 MB 2.5


Cellular Mobile

Domestic Post-Paid

Types of Timing

  • Off Peak Hours                   :                 6am – 3 pm
  • Peak Hours :                 3pm – 10 pm
  • Economy :                 10pm – 12 midnight & 4 am – 6 am
  • Late Night offer                   :                 12 midnight – 4 am

Types of Post-Paid Packages: Super 200 Plan       

  • Monthly Rental                   :                 200
  • Free talk-time/SMS worth :                 200



Call Category Peak Hours Off-Peak Hours Economy Late-Night Offer
Onnet Nu. 0.50/unit Nu. 0.40/unit Nu. 0.30 /unit Nu. 0.10/unit
Offnet (B-Mobile to Tashi Cell) Nu. 0.70/uni Nu. 0.50/unit Nu. 0.40/unit Nu. 0.40/unit


Mobile to Fixed Nu. 0.75/unit
Fixed to Mobile Nu. 3.00/minute


One Unit = 15 seconds


International Call Tariff

ISD Call Rates from B-mobile cell

(International calls tariff is same for all international calls whether it is from prepaid mobile or postpaid mobile)


Call Category Peak Hours Off-peak Hours Charging Unit
India Calls* NU 5.00 NU 5.00 1Minute
Thailand Calls NU 18.00 NU 18.00 1Minute
Charge Band-I NU 18.00 NU 18.00 1Minute
Charge Band-II NU 30.00 NU 30.00 1Minute
Rest of the world NU 45.00 NU 45.00 1Minute

Remark: For India calls, Nu. 5 for the 1st minute and Nu. 1.2 per 15 seconds unit thereafter


Countries in Charge Band I

Nepal, USA, Bangladesh, Singapore, UK, Canada, Austria, Switzerland, Australia, Philippines, Taiwan, Denmark, Sri Lanka, South Korea, Netherlands, Italy, Hong Kong, New Zeeland, Russia, Indonesia, Pakistan, Norway, Sweden, and Mal Dives.


Countries in Charge Band II

Japan, China , Germany , France , UAE, Israel , Spain , Belgium , and South Africa .
By default, we assign the standard package that consists of SMS, Call Forward, CLIP, STD and ISD facility. Other value-added features like CLIR, itemized billing, international roaming, etc…can be added on as per requirement by paying additional charges. NU 10,000 security deposit is required to availing international roaming facility. Postpaid service is available only from B-Mobile counters.




Comparison Charts

Comparison Chart (2007-2011) (million Nu)
Metrics 2007 2008 2009 2010 2011
GDP per capita 75047.95 81539.49 89639.09 104161.8 120876.53
Balance of Trade (Import vs Export) 6,113.62 -904.48 -1,657.43 -9,759.70 -17,211.69
Foreign Direct Investment inward 3269.4 125 312.6 885.9 743.5
Value of Export and Import
EXPORTS 27,859.06 22,590.64 23,992.74 29,324.39 31,485.95
India 22,723.72 21,480.02 22,434.39 26,000.89 26,377.97
Third countries 5,135.34 1,110.62 1,558.35 3,323.50 5,107.98
IMPORTS 21,745.44 23,495.12 25,650.18 39,084.09 48,697.64
India 15,099.54 17,339.55 19,968.01 29,338.00 35,201.07
Third countries 6,645.90 6,155.57 5,682.17 9,746.09 13,496.57
Population 0.66 0.67 0.68 0.7 0.71
Inflation CPI 5.2% 8.31% 4.41% 7.02% 8.86%
Exchange Rates (Nu. Per US$) 41.35 43.5 48.41 45.73 46.67
Ease of doing business index (1=easiest to 183=most difficult) .. .. .. 146 142
Time required to start a business (days) 48 46 46 46 36

Bhutan’s Top Ten countries of Export

Country Percent share Million USD
India 75.82 290.55
Hong Kong 16.20 62.08
Bangladesh 5.84 22.36
Japan 0.62 2.37
Italy 0.57 2.18
Germany 0.39 1.49
Nepal 0.36 1.39
United Kingdom 0.12 0.47
Singapore 0.06 0.22
China 0.03 0.11
  100 383.21


Top ten countries of Import

Country Percent share Million USD
India 76.41% 641.58
Korea South 6.33% 53.17
Singapore 4.00% 33.63
Japan 3.34% 28.01
Thailand 2.66% 22.31
China 1.91% 16.01
Italy 1.39% 11.70
Germany 1.39% 11.65
French Polynesia 1.31% 11.01
Sweden 1.26% 10.60
  100% 839.67




Top Ten Export (commodities) in the year 2011
SI No Commodity Description Values in (Millions Nu) Values in USD
1 Ferro-silicon 6,082.55 110.8942571




Other (Disc, tapes, solid-state non-volitile storage devices,smart cards and other media for the recordingof sound or of other phenomena, whether or notrecorded, including the production of discs, matrices and masters for the production of discs) 3,340.73 60.90665451
3 Others(Copper wire) 1,994.97 36.37137648
4 Bars and rods of iron or nonalloy steel, twisted 1,164.39 21.22862352
5 Of calcium 922.832 16.82464904
6 Manganese and articles thereof, including waste and scraps 623.45 11.36645397
7 Portland pozzolana cement 541.91 9.879854148
8 Of silicon 514.47 9.379580675
9 Gypsum; anhydrite 490.54 8.943299909
10 Portland slag cement 442.85 8.073837739
Others 4,925.84 89.80565178
                                                                         Grand Total 21,044.53 383.67424


Source: Department of Revenue & Customs ; Ministry of Finance, Thimphu.



Top Ten Imports (commodities) in the year 2011

SI No Commodity Description Values in (Millions Nu) Values in USD
1 Other light oils and preparations (HSD) 3,644.70 66.4484959
2 Of which the maximum cross-sectional dimension exc 1,964.89 35.82297174
3 Machinery with a 360o revolving (excavators) 1,535.62 27.99671832
4 Dumpers designed for off-highway use 1,520.46 27.72032817
5 Ferrous products obtained by direct reduction of iron ore 1,421.87 25.92288058
6 Motor spirit (gasolene) including aviation spirit 1,369.42 24.96663628
7 others( wood charcoal) 1,084.96 19.78049225
8 Cars, diesel above 2500 cc 892.34 16.26873291
9 Rice 851.92 15.53181404
10 Cars,diesel from 1500 cc to 2500 cc 826.64 15.07092069
others 33,574.57 612.1161349
Grand total 48,687.39 887.64613