Redomiciliation to GMC: Transferring an Existing Foreign Company into the Gelephu Mindfulness City

Summary

• Part 10A of the Companies Act 2025 (ss. 355–364A) lets a "foreign corporate entity", meaning any body corporate incorporated outside GMC, transfer its registration into GMC and continue as a GMC company limited by shares.
• Registration does not create a new legal entity and does not affect the entity's property, rights, obligations or pending litigation (s. 361(2)).
• The procedure is: reserve a name (s. 357), apply with the existing constitutional documents and the proposed GMC constitution (s. 358), obtain a notice of transfer of registration (s. 359(3)), then file proof of deregistration in the old jurisdiction within 60 days (s. 359(6)), register pre-existing charges within 30 days (s. 363) and issue new share certificates within 60 days (s. 364).
• Failure to prove deregistration allows the Registrar to revoke the GMC registration after at least 30 days' notice (s. 362).
• The Income Tax Act 2025 contains a bespoke overlay: s. 34G adjusts deductions and capital allowances for pre-registration assets, and s. 34H gives an "approved redomiciled company" a tax credit for foreign tax charged on the same income.

What redomiciliation is

Redomiciliation, called "transfer of registration" in the Companies Act 2025, is the process by which a company incorporated in one jurisdiction becomes a company of another without being wound up and re-formed. It keeps its legal personality, contracts, bank accounts and litigation position; only the law governing its corporate existence changes. Compared with forming a new GMC subsidiary and transferring assets to it, a transfer of registration avoids assignments, novations, consents and potentially taxable disposals.

Throughout, "$" means United States dollars (Companies Act 2025, s. 4A).

Who can use Part 10A

Section 355 states that Part 10A "applies to a foreign corporate entity which intends to be registered as a company limited by shares under this Act". Section 356 defines "foreign corporate entity" simply as "a body corporate that is incorporated outside GMC". The Act does not list eligible jurisdictions; any body corporate from any jurisdiction is within scope on the face of the Act, provided it seeks registration as a company limited by shares. A guarantee company or unlimited company cannot use this route.

Section 356 also provides that "place of incorporation" for an entity that has already redomiciled means the jurisdiction where it is domiciled when it applies, so serial redomiciliations are accommodated. Because the company must prove deregistration at home within 60 days (s. 359(6)), the first legal question in any project is whether the home jurisdiction allows the company to leave.

Section 364A allows the designated officer to make regulations prescribing "the minimum and other requirements that a foreign corporate entity must meet before it may be registered", waiving requirements for classes of entity and adapting the Act's provisions to redomiciled entities. The Registrar must refuse registration if not satisfied that those prescribed minimum requirements are met (s. 360(1)). They are not in the Act itself, and Basnet Law can confirm the current position before an application is prepared.

The procedure, step by step

1. Reserve the name. The entity must apply to reserve the name of the intended company (s. 357(1)). Section 27 applies as if it were an ordinary name reservation (s. 357(2)); an approved reservation lasts 60 days from notification, extendable by a further 60 days on a good-faith application (s. 27(12B), (13)). No registration can occur unless the name has been reserved (s. 357(3)).
2. Apply to the Registrar. The application must be in the prescribed form and accompanied by a certified copy of the entity's existing charter, statute, constitution, memorandum or articles, the constitution by which it proposes to be registered in GMC, any other prescribed documents and the prescribed fee (s. 358(2)). The Registrar may require further information or documents (s. 358(3)).
3. Registration and conditions. If the Registrar "thinks fit", the entity is registered as a company limited by shares by registration of its constitution (s. 359(1)). Registration may be subject to conditions (s. 359(2)), which the Registrar may later waive or modify (s. 359(8)).
4. Notice of transfer of registration. On registration the Registrar issues a notice stating that from the specified date the company is registered by way of transfer, is a company limited by shares and, where applicable, is a private company (s. 359(3)). The notice and any certificate of confirmation are conclusive evidence of registration and its date (s. 359(4)–(5)).
5. Deregister at home within 60 days. Within 60 days after the notice, the company must submit a document evidencing that it has been deregistered in its place of incorporation (s. 359(6)). The Registrar may extend this period on application, subject to conditions (s. 359(7)).
6. Register pre-existing charges within 30 days. Any charge that would have been registrable under Division 8 of Part 4 had the entity been a GMC company must be lodged within 30 days after registration (s. 363(1)). Default is an offence (fine up to $1,000 plus a default penalty, s. 363(4)) but does not affect the continuity, priority or validity of the security (s. 363(5)).
7. Issue new certificates within 60 days. The company must have certificates ready for all holders of existing shares or debentures within 60 days after registration (s. 364(1)); on delivery, prior certificates cease to be valid (s. 364(2)). Any bearer share warrant issued before registration is void (s. 364(3)).

Grounds for refusal and appeals

The Registrar must refuse registration where the prescribed minimum requirements are not met (s. 360(1)) or where satisfied that the intended company "is likely to be used for an unlawful purpose or for purposes prejudicial to public peace, welfare or good order in GMC or the Kingdom of Bhutan", or that registration "would be contrary to national security or interest" (s. 360(2)). A person aggrieved by a refusal or a condition may appeal to the designated officer within 30 days; that decision is final (ss. 359(9), 360(3)).

Effect of registration: continuity is the whole point

From the date of registration, the entity "is deemed to be a company as defined in section 4(1)" and all provisions of the Act apply to it, subject to adaptations in regulations (s. 361(1)(a)). If it had previously been registered as a foreign company under Division 2 of Part 11, that registration ceases automatically (s. 361(1)(b)).

Section 361(2) then confirms, "to avoid doubt", that registration does not create a new legal entity; does not "prejudice or affect the identity of the body corporate ... or its continuity as a body corporate"; does not affect its property, rights or obligations; and does not render defective any legal proceedings by or against it. Proceedings that could have been commenced or continued before registration may be commenced or continued afterwards.

For counterparties and lenders the contracting party is the same legal person before and after; whether a contract contains a change-of-jurisdiction trigger is a separate due diligence question.

Revocation: the 60-day deregistration deadline has teeth

If the company fails to prove home deregistration under s. 359(6), the Registrar may revoke the GMC registration (s. 362(1)) after giving written notice and allowing at least 30 days for representations (s. 362(2)). Revocation takes effect on publication in the Gazette, at which point the company "ceases to be a company as defined in section 4(1)" and the Act ceases to apply to it (s. 362(5)). The order is final (s. 362(6)).

Revocation does not extinguish liabilities: the liability of every officer and member continues (s. 362(7)) and enforcement of claims by or against the company is unaffected (s. 362(8)). The outbound deregistration should therefore be planned before the GMC application is filed.

Life as a GMC company after registration

Once registered, the company is subject to the full Companies Act 2025: the resident director requirement (s. 145(1), (1A)), a registered office in GMC (s. 142), the register of registrable controllers (s. 386AF) and the annual filing cycle (see our guide to the real substance requirements for a GMC company). Shares carry no par value in GMC (s. 62A), and the redenomination power in s. 73 is available if share capital is expressed in a non-USD currency (see our guide to share capital in GMC).

The tax overlay: ss. 34G and 34H of the Income Tax Act 2025

The Income Tax Act 2025 anticipates redomiciliation directly. Section 34G applies to "a body corporate incorporated outside GMC that is registered as a company limited by shares under Part 10A of the Companies Act 2025" (s. 34G(1)), and uses the Companies Act's "registration date" as the pivot (s. 34G(2)).

Section 34G: what carries over and what does not

The theme is that GMC gives allowances on value at the registration date, not historic cost, and will not give a second deduction for something already relieved abroad. A registration-date valuation is therefore part of every redomiciliation. Transitional regulations may be made under s. 34G(22).

Section 34H: the tax credit for approved redomiciled companies

Section 34H addresses double taxation where the old jurisdiction taxes income on an estimated basis and GMC then taxes the same income when derived or received. It applies only to an "approved redomiciled company", one "approved by the designated officer for the purposes of this section" (s. 34H(14)).

Where the place of incorporation levies a tax "of a similar character to income tax" on an estimate of income that becomes chargeable in GMC (s. 34H(1)), the company is allowed a credit against GMC tax on that income for each year of assessment specified by the designated officer at approval (s. 34H(2)). The total credit is computed by the formula in s. 34H(3), broadly the foreign-taxed income (excluding income from agreements entered into after the registration date) multiplied by the lower of the GMC rate and the foreign rate.

For each year claimed, the company must be resident in GMC throughout the basis period and satisfy all conditions specified at approval (s. 34H(4)). Expenses and allowances attributable to the credited income are ring-fenced for the specified years (s. 34H(5)–(7)).

There is a clawback provision. If, during a period specified at approval, the company ceases to carry on any trade or business in GMC, an amount computed from the credits already allowed and the number of complete years of GMC trading becomes recoverable as a debt due to the GMCA (s. 34H(9)). Credits obtained through false or omitted information are fully recoverable (s. 34H(10)), payable within 30 days of notice (s. 34H(11)).

Practical checklist / Next steps

1. Confirm that the home jurisdiction permits outward redomiciliation and what its own deregistration timetable and creditor-notice requirements are.
2. Obtain the current prescribed minimum requirements and forms under s. 364A regulations before drafting.
3. Review material contracts, financing documents and licences for change-of-jurisdiction triggers and consent requirements.
4. Draft the GMC constitution and reserve the name under s. 357.
5. Prepare the registration-date valuation of plant, IP and stock for s. 34G, and decide whether to apply for approval under s. 34H.
6. Diarise the post-registration deadlines: charges within 30 days (s. 363), deregistration proof and new certificates within 60 days (ss. 359(6), 364).
7. Line up the resident director, registered office and controllers register for the registration date.

Frequently asked questions

Does redomiciling to GMC create a new company?

No. Section 361(2) states expressly that registration does not create a new legal entity and does not affect the entity's identity, property, rights, obligations or pending proceedings.

Which foreign companies are eligible?

Any "body corporate that is incorporated outside GMC" that intends to register as a company limited by shares (ss. 355–356). Detailed minimum requirements are set by regulations under s. 364A, and the Registrar must refuse an applicant that does not meet them (s. 360(1)).

What if we cannot deregister in the old jurisdiction within 60 days?

Apply to the Registrar for an extension under s. 359(7) before the deadline. Without proof of deregistration the Registrar may, after at least 30 days' notice, revoke the GMC registration (s. 362).

Is there tax relief on redomiciliation?

Section 34G sets transitional rules for pre-registration assets and expenses, and s. 34H gives an approved redomiciled company a credit for foreign tax on income that GMC also taxes. Approval under s. 34H is discretionary and subject to a clawback if GMC trading ceases early (s. 34H(9)).

Key takeaways

• Part 10A is an inward transfer regime open to any body corporate incorporated outside GMC that will continue as a company limited by shares.
• Continuity is statutory: same entity, same assets, same contracts, same litigation (s. 361(2)).
• Tax follows the registration date: allowances are rebased to that date under s. 34G, and s. 34H can relieve double taxation for approved companies that remain resident and trading in GMC.
• Basnet Law can advise on the outbound and inbound steps so that no gap opens between leaving the old register and joining the GMC one.

This article is general information about the law of the Gelephu Mindfulness City Special Administrative Region as at the date above. It is not legal advice and does not create a lawyer–client relationship.

You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.

References

• Companies Act 2025, ss. 4A, 27, 62A, 73, 142, 145, 355, 356, 357, 358, 359, 360, 361, 362, 363, 364, 364A, 386AF
• Income Tax Act 2025, ss. 34G, 34H