Bhutan Info
Joined: 15 Jan 2007
Posts: 12
Home Country: bhutan
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 Posted: Tue Jan 16, 2007 1:21 pm Post subject: DOING BUSINESS IN BHUTAN |
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DOING BUSINESS IN BHUTAN
STARING A BUSINESS
STANDARDIZED COMPANY
Legal Form: Limited Liability Company
Minimum Capital Requirement: 0
City: Thimphu
Registration Requirements:
Procedure 1. Obtain a clearance from the Royal Bhutan Police
Time to complete: 1 day to 30 days ( 1 day if it is a investor from Thimpu investing in Thimpu)
Cost to complete: no charge
Comment: Royal Bhutan Police verifies the adverse record with the criminal branch and the respective district where the applicant originally lived. This clearance can be sought up to a year in advance.
Procedure 2. The company submits project proposal to Department of Industry, Project Development Services Division
Time to complete: 4 days for activities requiring no sector/ environmental clearance; up to 6 months for activities requiring sector clearance
Cost to complete: no charge
Comment: The Project Division Services Division reviews the project proposal. At the same time, where required, the Department of Industry sends a letter with a copy of the project proposal to the National Environment Commission for Environment Clearance (maximum 3 months) and other sectors for sector clearance. Where sector clearance is required, the promoter then usually waits for 2-3 months to hear back from PDSD, after which a detailed report has to be filed. The promoter may take 1 to 2 months to prepare the report.
On 24th August 2005, the Regional Trade and Industry Office has been empowered to issue environmental clearances for 17 listed sectors (instead of Environmental Unit). Since 26th September 2005, RTIO can also approve small and cottage scale projects with fixed investment of up to Nu 10 million for the same 17 listed sectors ( instead of PDSD).
However, companies to be registered by the RoC still will have to obtain the Environment Clearance from the NEC before registration at the RoC, where applicable.
Procedure 3. Obtain approval of the company name by the Intellectual Property Division (Ministry of Trade)
Time to complete: 1 day
Cost to complete: no charge
Comment: The entrepreneur can download the "name availability" application form from www.rocmti.gov.bt
The entrepreneur completes the form and provides 3 alternative names. Once the name is approved by IPD, the entrepreneur can seek the name approval from the Registrar of Companies immediately or at a later stage at the time of submitting the Articles of Incorporation..
Procedure 4. Register with the Registrar of Companies
Time to complete: 1 - 30 days
Cost to complete: BTN 2000
Comment: The following documents are required will be attached with the Articles of Incorporation:
1. Name availability form
2. Consent to act as director duly filled by all directors
3. Security clearance from Royal Bhutan Police for all the directors
4. Copy of citizenship ID card of all directors
5. Declaration of Compliance Form signed any of the Directors
6. Project approval from "Project Development Services Division", Ministry of Industry (If required and ultimately if every formality is fulfilled in about 30 days time, the Registrar will issue letter of Registration. At present, only local Companies could be registered. Advertisement is optional. Company may choose to publish a notice in the weekly newspaper "Kuensel". It has to be booked at least 1 week in advance.
If the Articles of Association Incorporation are satisfactory, the Registrar of Companies will record all information in its computer database-CREG and print two copies of the Certificate of Incorporation. A paper file is also opened for the new company.
Registration Incorporation fee schedule as set in schedule IV of the Companies Act of Kingdom of Bhutan, 2000
Authorised share capital Nnot exceeding Nu.1,000,000 - Nu.1000
Exceeding Nu 1,000,000, but less than Nu 2,000,000 - Nu.1500
Exceeding Nu. 2,000,000 - Nu.2000
Procedure 5. Obtain a location clearance from the City Council or the District Administrators
Time to complete: 3 days
Cost to complete: BTN 50 + BTN 10 (legal stamp)
Comment: Once the company is incorporated, it must obtain a trade/industry license to be able to operate. In order to obtain the license, a business must get clearance from the City Council (known as City Corporation) in the urban areas and from the District Administrators in the Districts. City Corporation will verify the sites whether the location of the business is in commercial area and also the site is legally owned. One form is presented to the City Council/Office of the District Administrator as well as the Regional Trade & Industry Office. This form can be obtained from the Office of the Regional Director, Regional Trade & Industry Office (Thimphu, Pheuntsholing, Gelephu, Samdrup Jongkhar, Traongsa and Trashigang). The form cost only Nu. 50; no fee is charged on the clearance by the City Council nor the District Administrator.
Procedure 6. Apply for a trade/industrial license at the Regional Trade and Industrial Office (under Ministry of Trade)
Time to complete: 2 days
Cost to complete: Registration fee, license fee, booklet charge (see comment)
Comment: RTIO.
No business activity can be carried out before obtaining a trade or an industrial license. Sectoral permissions/approvals (if required) must be presented. Businesses with more than Nu. 1 million are required to present a project report as per the guideline issued by Ministry of Trade & Industry.
Fee schedule
Scale Investment (Nu million) Registration fees License fees Cost of license booklet Total
Large More than 100 8,000 4,000 100 12,100
Medium Between 10-100 4,000 2,000 100 6,100
Small Between 1-10 2,000 1,000 100 3,100
Cottage Less than 1 1,000 500 100 1,600
Since 1st July 2005, applications forms for trade and industrial licenses can be downloaded off the Ministry of Trade and Industry's website (www.mti.gov.bt) and photocopies of application forms are accepted.
Procedure 7. Apply for tax payer identification number and register the company for specific taxes
Time to complete: 1 - 3 days
Cost to complete: no charge
Comment: Every company is required to register for business income tax for which a business identification code (BIC) is given. This BIC number must be presented for obtaining a business license as well as for participating in public tenders and works. In practice, companies may register at the time of the first tax payment.
Procedure 8. Make a company seal
Time to complete: 5 days
Cost to complete: USD 20
Comment: Companies are required to have a seal within one year of incorporation. This is verified by the Registrar during the annual inspection.
Procedure 9*. Open a bank account
Time to complete: 1 day (simultaneous with procedure 8)
Cost to complete: no charge
Comment: Under Company Act 2000, a bank account under company's name has to be opened within one month of incorporation.
Procedure 10*. File the evidence of operating a bank account with the ROC
Time to complete: 1 day (simultaneous with procedure 8)
Cost to complete: no charge
Comment: Evidence of operating a bank account has to presented/filed with the ROC once the Certificate is issued and upon obtaining the license.
Note: Procedures sometimes take place simultaneously. Instances of this are marked with an asterisk (*). |
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