SummaryWhat the law provides:
- The core lawful basis for a foreigner to work and remain in GMC is a work pass issued by the Controller of Work Passes under the Employment of Foreign Workforce Act 2025 (ss. 5, 7 and 10). Employees and self-employed foreigners alike need one.
- Categories of work pass, their duration, criteria and conditions are "prescribed" by regulations under s. 29(2)(c). The specific pass available to you is confirmed at the time of application.
- Entry and stay as such remain governed by the Immigration Act 1959 as applied in GMC (Application of Laws Act 2024, Schedule A, item 8), and the Second Schedule to the Foreign Workforce Act lists "prohibited immigrants" who cannot be issued a pass.
- Holding a valid work visa or work pass makes a person "ordinarily resident in GMC" for the purposes of being a company's resident director (Companies Act 2025, s. 145(1A)), an LLP manager (LLP Act 2026, s. 29) or a business name's authorised representative (Business Names Registration Act 2026, s. 11).
- Tax residence is a separate test: an individual is "resident in GMC" if they reside there or are present or employed there for 183 days or more in the preceding year (Income Tax Act 2025, s. 2). Non-citizens are taxed at 0% on income derived on or before 31 December 2030 whether resident or not (s. 43(1)(ba)).
- Any investor, remote-worker or residence programme that GMC offers is set administratively; its terms, fees and eligibility are confirmed directly at the time of application.
Three different meanings of "resident"
People ask "how do I become a GMC resident" as if it were one question. In GMC law it is at least three:
- Immigration residencethe legal right to enter, remain and work. This is the work pass regime plus the applied Immigration Act.
- Corporate residencewhether an individual counts as "ordinarily resident in GMC" so they can hold a role that the company, LLP and business name statutes reserve for local residents.
- Tax residencewhether an individual is "resident in GMC" for the Income Tax Act 2025, which determines which rate table applies to Bhutanese citizens and which credits are available.
Each pass has its own test. Satisfying one does not automatically satisfy the others, although in practice a work pass holder living and working in Gelephu will usually satisfy all three. This article takes them in turn, then summarises which questions the Acts answer and which are set by regulation.
"$" means United States dollars in every GMC Act referred to here.
Route 1: Employment: the work pass for foreign employees
The rule
"A person must not employ a foreign employee unless the foreign employee has a valid work pass" (Employment of Foreign Workforce Act 2025, s. 5(1)), and "a foreign employee must not be in the employment of an employer without a valid work pass" (s. 5(2)). A "foreigner" is "any person who is not a citizen of the Kingdom of Bhutan" (s. 2). The obligation therefore applies to every non-Bhutanese hire, at every level, including executives and directors who are employed.
How it is obtained
The employer makes the application. Section 7 sets the shape of the process:
- the application is made by the person prescribed for the relevant category of pass, in the form the Controller determines, with the prescribed fee and any information the Controller requires (s. 7(1));
- the Controller may issue an in-principle approval subject to conditions (s. 7(3)), then issue the pass with or without conditions if the fee is paid and the Controller is satisfied the person "is not a prohibited immigrant as specified in the Second Schedule" (s. 7(2)(a));
- the Controller may refuse (s. 7(2)(b)), and may at any time vary conditions, suspend, revoke or reinstate a pass, or debar a person from applying (s. 7(5)).
The pass is valid only for the employer, the employee and the trade, sector or occupation specified in it or in the application (s. 12(1)), and for the period stated in it (s. 12(3)). Changing employer means a new pass. Renewal is possible on payment of the prescribed renewal fee for a period the Controller determines (s. 7(4)).
An aggrieved applicant may appeal to the designated officer, "whose decision is final" (s. 7(10)). Judicial review is excluded except on procedural compliance (s. 7(11)).
Levy and conditions
The designated officer may impose a levy on employers in respect of foreign employees by order in the Gazette (s. 11(1)). Regulations under s. 29(2)(c) prescribe categories of pass, periods, criteria and conditions. Whether a levy applies to a given category, and at what rate, must be checked against the orders and regulations current at the time.
For the employer's obligations in detail, including the register of foreign employees (s. 8), termination notifications (s. 9) and the offence regime, see our employer's guide to GMC work passes.
Route 2: Self-employment: the work pass for self-employed foreigners
The Act does not confine work passes to employees. "A foreigner must not be a self-employed foreigner unless he or she has a valid work pass" (s. 10(1)). A "self-employed foreigner" is one who, not under a contract of service, "seeks to engage in or engages in any trade, vocation or profession, whether for the purpose of gain or otherwise; or any other activity in GMC for the purpose of gain" (s. 2).
This is the route for founders, consultants, professionals and sole proprietors who intend to run their own business in GMC rather than be employed by a GMC company. The pass for a self-employed foreigner is valid only for the person and the trade, vocation, profession or activity specified or applied for (s. 12(2)). The levy provision extends to self-employed foreigners (s. 11(1)). Breach of s. 10(1) is an offence with a fine up to $20,000 or imprisonment up to 2 years or both (s. 10(2)).
Two points in the Act are often missed. First, a founder who incorporates a GMC company and is then employed by it as a director or executive is a foreign employee of that company, and the company applies for the pass under s. 5 and s. 7. Second, "whether for the purpose of gain or otherwise" means that unpaid professional activity is still caught.
Route 3: Investors and the one-stop shop
The Gelephu Mindfulness City Authority describes the Economic Development Group (EDG) as a one-stop shop offering end-to-end assistance including land identification, lease guidance, company incorporation, regulatory clearances and government coordination, with corporate registration through the Gelephu Corporate Registration Office (GCRO) and financial licensing through the Gelephu Financial Services Office (GFSO). It also refers to a dedicated tax regime for companies and residents.
Under the Acts, an investor who wants to live in GMC holds a work pass as an employee of their GMC company or as a self-employed foreigner, in whatever category the regulations prescribe. Any programme for investors, remote workers or other residents is set administratively, and its terms, eligibility, duration and fees are confirmed with the relevant GMC office at the time of application. Basnet Law can confirm the current position.
Who cannot get a pass: prohibited immigrants
The Controller may issue a pass only if satisfied the person is not a "prohibited immigrant" under the Second Schedule (s. 7(2)(a)(ii)). The Schedule lists sixteen categories. The ones most relevant to professionals and their families are:
- a person "unable to show that he or she has the means of supporting himself or herself and his or her dependants" or who has no definite employment awaiting them (para. 1);
- a person with a contagious or infectious disease dangerous to the community (para. 2), a person with AIDS or HIV (para. 3), or one who refuses a required medical examination (para. 4);
- a person convicted anywhere of an offence carrying imprisonment, without a free pardon, whom the Controller of Immigration deems undesirable (para. 5);
- a person whose entry was unlawful under immigration law (para. 9) or who lacks valid travel documents (para. 14);
- a person considered undesirable on the basis of official or diplomatic information (para. 12) or removed from another country on repatriation (para. 13);
- a person who advocates the violent overthrow of the GMCA or established government, or belongs to an organisation that does (paras 10 and 11); and
- "the family and dependants of a prohibited immigrant" (para. 15).
Applicants with a criminal record or a relevant medical history should take advice before applying, because a refusal under s. 7(2) is appealable only to the designated officer.
Entry and stay: the applied Immigration Act
The work pass authorises work. Entry into and physical presence in GMC are matters of immigration law. The Application of Laws Act 2024 applies the listed enactments in Schedule A in GMC with modifications, and item 8 of Schedule A is the Immigration Act 1959. Section 16(3) of the Foreign Workforce Act reflects the interface: an employment inspector may hand over travel documents to "an immigration officer". Visa requirements, entry permits and the immigration status of dependants who do not work are therefore governed by the applied Immigration Act and the administrative arrangements made under it, which should be confirmed at the time of travel.
Corporate residence: who counts as "ordinarily resident"
Three business statutes require a locally resident individual in a defined role, and all three use the same formula.
| Statute | Role | Test |
|---|---|---|
| Companies Act 2025, s. 145(1) and (1A) | At least one director of every company | "ordinarily resident in the GMC if he is a resident in the GMC or has a valid work visa or work pass" |
| LLP Act 2026, s. 29 | At least one manager of every LLP (natural person, 18 or over) | Ordinarily resident in GMC: resident, or valid work visa or pass |
| Business Names Registration Act 2026, s. 11 | Authorised representative, where the proprietor or all partners reside outside GMC | Natural person, 18 or over, ordinarily resident in GMC: resident, or valid work visa or pass |
The Limited Partnerships Act 2026 takes a parallel approach: the Registrar may require a local manager where every general partner is resident outside GMC without a valid work visa or pass (s. 28).
The practical consequence is that a foreign founder who obtains a work pass can personally satisfy the resident director requirement for their own company. Without one, the company must appoint someone else who is resident or holds a pass. A director cannot resign if that would leave the company without an ordinarily resident director (Companies Act 2025, s. 145(5)), and if a company trades for more than six months without one, knowing members become personally liable for debts contracted in that period (s. 145(10)).
Tax residence for individuals
The Income Tax Act 2025 defines an individual "resident in GMC" as one who, in the year preceding the year of assessment, "resides in GMC except for such temporary absences therefrom as may be reasonable", and includes a person "who is physically present or who exercises an employment (other than as a director of a company) in GMC for 183 days or more" in that year (s. 2). Days as a non-executive director do not count toward the 183.
For most foreign residents the rate is the same either way. Every individual "who is not a citizen of the Kingdom of Bhutan (whether resident in GMC or not)" pays tax at 0% on chargeable income derived on or before 31 December 2030 (s. 43(1)(ba)). Residence matters for Bhutanese citizens, who are taxed under the progressive table in the Second Schedule if resident (s. 42) and at 0% to the end of 2030 if not (s. 43(1)(b)), and it matters for anyone seeking foreign tax credits, which require GMC residence (s. 50(2)). Tax residence certificates for use abroad are an administrative matter (see our guide to double taxation relief).
Employers should also be aware of the exit controls: on termination, no final salary may be paid without income tax clearance (Employment Act 2025, s. 24), and the Comptroller may direct that a person about to leave GMC with tax unpaid be prevented from leaving (Income Tax Act 2025, s. 86).
Where each answer is found
| Question | Answer in the Acts | Set by regulations or administration |
|---|---|---|
| Do I need a pass to work? | Yes, employed or self-employed (ss. 5, 10) | |
| Which pass? | "Prescribed category" (s. 2, s. 7(1)(a)) | Categories, periods, criteria, conditions (s. 29(2)(c)) |
| What does it cost? | "Prescribed fee, if any" (s. 7(1)(c)) | Fees (s. 29(2)(b)); levy amount by Gazette order (s. 11) |
| Who applies? | Person prescribed for the category (s. 7(1)(a)) | Regulations |
| Who is excluded? | Second Schedule prohibited immigrants | Immigration orders under the applied Immigration Act |
| Can my family come? | Governed by the applied Immigration Act 1959 | Applied Immigration Act 1959 and administration |
| Investor or remote-worker residence? | Work pass as employee or self-employed (ss. 5, 10) | Administrative programmes |
| Am I a resident director? | Yes if resident or holding a valid work visa or pass (Companies Act s. 145(1A)) | |
| Am I tax resident? | s. 2 Income Tax Act test |
Practical checklist
- Decide which route fits: employed by a GMC entity (s. 5), or self-employed (s. 10).
- If forming a company first, plan who will be the ordinarily resident director on incorporation (Companies Act s. 145); a nominee may be needed until your own pass issues.
- Confirm the current prescribed pass categories, criteria, fees and any levy under the s. 29 regulations and s. 11 orders before applying.
- Screen for Second Schedule issues: means of support, medical status, criminal record and travel documents.
- Assemble the information the Controller requires (s. 7(1)(d)); the applicant bears the burden of proving the truth of the application (s. 15).
- Keep the pass in your own possession and produce it on demand (s. 13); report loss within 7 days (s. 14).
- Do not work outside the trade, sector or occupation on the pass without the Controller's approval (s. 12).
- Confirm entry and dependant arrangements under the applied Immigration Act separately from the work pass.
- Track days in GMC for tax residence, and obtain tax clearance before final salary on any departure.
Frequently asked questions
Is there a GMC residence visa for investors?
An investor who wants to live in GMC holds a work pass as an employee of their GMC company or as a self-employed foreigner under s. 10 of the Employment of Foreign Workforce Act 2025. Any investor or residence programme is administrative, and its terms and fees are confirmed at the time of application.
Can I be the resident director of my own GMC company?
Yes, once you hold a valid work visa or work pass. Section 145(1A) of the Companies Act 2025 treats a person as ordinarily resident in GMC if they are resident or hold a valid work visa or work pass. Until then, another qualifying individual must fill the role.
How long is a GMC work pass valid?
For "the period specified in the work pass" (s. 12(3)). The periods for which passes may be issued or renewed are prescribed by regulations under s. 29(2)(c), and renewal is at the Controller's discretion on payment of the prescribed renewal fee (s. 7(4)).
Do I pay income tax if I live in GMC?
Individuals who are not Bhutanese citizens are taxed at 0% on chargeable income derived on or before 31 December 2030, resident or not (Income Tax Act 2025, s. 43(1)(ba)). Bhutanese citizens resident in GMC are taxed under the progressive Second Schedule table.
Can a remote worker employed abroad live in GMC without a pass?
The Act's definitions are wide: a "self-employed foreigner" includes anyone engaging in "any other activity in GMC for the purpose of gain" (s. 2). A person doing paid work from GMC should assume a pass is required unless exempted by Gazette notification under s. 4, and should confirm the position before relocating.
Key takeaways
- The work pass is the residence document in GMC law; employees and the self-employed both need one.
- Pass categories, durations, criteria, fees and levies are prescribed by regulations and orders.
- A valid work visa or pass satisfies the "ordinarily resident" test for directors, LLP managers and authorised representatives.
- Tax residence is a separate 183-day test, but non-citizens pay 0% until the end of 2030 regardless.
- Programme-level residence schemes are administrative and are confirmed at the time of application.
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
- Employment of Foreign Workforce Act 2025 (Law No. 4 of 2025), ss. 2, 4, 5, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16(3), 29; Second Schedule
- Companies Act 2025 (Law No. 1 of 2025), s. 145(1), (1A), (5), (10)
- Limited Liability Partnerships Act 2026 (Law No. 2 of 2026), s. 29
- Limited Partnerships Act 2026 (Law No. 3 of 2026), s. 28
- Business Names Registration Act 2026 (Law No. 1 of 2026), s. 11
- Income Tax Act 2025 (Law No. 6 of 2025), ss. 2 ("resident in GMC"), 42, 43(1)(b) and (ba), 50(2), 86
- Employment Act 2025 (Law No. 3 of 2025), s. 24
- Application of Laws Act 2024 (Law No. 1 of 2024), s. 4 and Schedule A item 8 (Immigration Act 1959)
