Every founder who has tried to move a group from one offshore centre to another knows the expensive version: incorporate a new entity, assign the contracts, novate the banking, re-paper the option plan, and ask two hundred customers to sign a change of counterparty notice. The Companies Act 2025 of the Gelephu Mindfulness City Special Administrative Region offers a different version. Its transfer of registration provisions allow a body corporate incorporated outside GMC to be registered as a GMC company limited by shares, and the Act states in terms that registration does not create a new legal entity. The company that arrives is the company that left.
In short
- The transfer of registration provisions of the Companies Act 2025 let a foreign corporate entity apply to be registered as a GMC company limited by shares by way of transfer of registration.
- Registration does not create a new legal entity, does not prejudice the body corporate's identity or continuity, does not affect its property, rights or obligations, and does not render defective any legal proceedings. Proceedings continue as before.
- The company must reserve its name first, lodge its existing constituting instrument and its proposed GMC constitution, and then, within 60 days of the notice of transfer of registration, produce evidence of deregistration in its former place of incorporation. Failure to do so can lead to revocation.
- Pre-existing charges must be registered, and new share certificates issued within 60 days. Any bearer share warrant issued before registration is void.
- The Income Tax Act 2025 modifies the treatment of redomiciled companies for bad debts, impairment losses, pre-registration expenses and trading stock, and gives tax credits to an approved redomiciled company where its former place of incorporation taxes the same income on an estimated basis.
- The company rate in GMC is 15%. Nothing about redomiciling delivers 0% on its own. Full exemption requires approval as a founders company, and a rate of not less than 5% requires approval as a strategic and development company, with both approval routes closing on 31 December 2030.
The procedure, step by step
The Act deals with this compactly, and the sequence matters more than the volume of paper.
- Confirm the entity is eligible. These provisions apply to a body corporate incorporated outside GMC that intends to be registered as a company limited by shares. The destination form is fixed. You arrive as a company limited by shares, and where applicable as a private company.
- Reserve the name. The entity must apply to reserve the name of the intended company, with the ordinary name reservation provisions applying as if it were a new company, and it must not be registered unless that name has been reserved. This is where restricted words are caught, and the Gelephu Corporate Registration Office has published terms it will refuse, including references to Bhutan and to GMC itself.
- Apply to the Registrar. The application must be in the prescribed form with the prescribed particulars, accompanied by a certified copy of the instrument defining the entity's constitution in its place of incorporation, whether charter, statute, constitution or memorandum and articles, plus the constitution by which it proposes to be registered in GMC, any other prescribed documents and the prescribed fee.
- Registration. Upon compliance, the Registrar may, if the Registrar thinks fit, register the entity by registering its constitution, subject to any conditions the Registrar imposes and may later waive or modify.
- Receive the notice of transfer of registration. The notice states that the company is, on and from the date specified, registered by way of transfer of registration, a company limited by shares, and where applicable a private company. A certificate of confirmation may be issued on application. Each is conclusive evidence of registration and of its date.
- Deregister abroad within 60 days. The company must submit evidence that it has been deregistered in its place of incorporation, and the Registrar may extend that period on application.
- Clean up the corporate record. Charges created before registration must be lodged. Within 60 days of registration the company must have new certificates ready for delivery to all holders of existing shares or debentures, and on delivery the old certificates cease to be operative. Any share warrant to bearer issued before registration is void.
The Registrar must refuse registration where the prescribed requirements have not been met, or where 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 in the Kingdom of Bhutan, or where registration would be contrary to national security or interest. A 30 day appeal lies to the designated officer against a refusal, a condition of registration or the modification of a condition, and that decision is final.
Revocation is the sanction that concentrates the mind. If the company fails to produce its foreign deregistration evidence, the Registrar may revoke the registration, after written notice and at least 30 days for representations. On publication of the revocation order in the Gazette the company ceases to be a company under the Act, though the liability of every officer and member continues.
Why the continuity wording is the whole point
The Act says that, to avoid doubt, registration does not create a new legal entity, does not prejudice the identity of the body corporate or its continuity, 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 continued or commenced before registration may be continued or commenced afterwards.
For a holding company, that paragraph is the transaction. Share pledges over subsidiaries survive. Shareholders agreements survive the transfer. The cap table survives, subject to the reissue of certificates. Litigation survives, on both sides. There is no disposal of underlying assets to analyse, and no counterparty consent to chase under a change of control clause, because control has not changed hands.
For a crypto company the same wording matters for a different reason. Digital asset businesses accumulate keys, custody arrangements, exchange accounts and platform agreements that are painful to novate and sometimes impossible to reopen without a fresh onboarding cycle. Continuity of legal personality is the difference between a redomiciliation and a rebuild.
Once registered, the entity is deemed to be a company as defined in the Act and all its provisions apply, with such adaptations, exceptions and modifications as may be specified in regulations. It therefore assumes the ordinary GMC obligations: a registered office in GMC, at least one director ordinarily resident in GMC, a company secretary, an auditor, the statutory registers and the annual filing cycle. If the entity was already registered as a foreign company operating a branch in GMC, that branch registration ceases on the date of transfer.
The tax treatment of a company that arrives mid-life
A company that has traded for a decade elsewhere brings a balance sheet full of items created under another tax system. The Income Tax Act 2025 addresses this in its section on modification of provisions for companies redomiciled in GMC, which applies to a body corporate incorporated outside GMC registered by way of transfer of registration. Its registration date is the date specified in the notice of transfer of registration.
The core rules are these. Where a debt owed to the company in respect of a trade or business outside GMC was incurred before the registration date and is later written off as bad or provided against, no deduction is allowed, and any recovery or reversal is not chargeable. Where an impairment loss on a financial asset on revenue account acquired for a business outside GMC was incurred before the registration date, a later reversal is not chargeable. Where such a loss is incurred on or after the registration date in the course of a GMC trade or business, a deduction is allowed to the extent the asset becomes credit-impaired within the meaning of IFRS 9, with any subsequent reversal chargeable to the extent of that deduction. No deduction is allowed for pre-registration expenses incurred for a business outside GMC for which relief has already been given under a foreign tax of a similar character. Trading stock acquired before registration for a foreign business is valued at the lower of cost and net realisable value on the registration date.
The logic is symmetrical and unromantic. GMC will not give relief for losses that accrued under someone else's system, and will not tax the reversal of those losses either. The line is drawn at the registration date.
The second provision is the one worth negotiating for. Where an approved redomiciled company has income chargeable to tax in GMC and its former place of incorporation levies a tax of a similar character on an estimate of that same income, the company is allowed tax credits for years of assessment specified by the designated officer at approval. The total credit follows a formula: broadly the estimated foreign-taxed income, excluding the part derived wholly from arrangements entered into on or after the registration date, multiplied by the lower of the GMC rate on the relevant income and the foreign rate. It is available only where the company is resident in GMC throughout the basis period and satisfies all conditions specified at approval.
An approved redomiciled company is one approved by the designated officer for the purposes of that section. Approval is a separate step from registration and should be raised before the move. There is also a clawback if the company ceases to carry on any trade or business in GMC within a period specified at approval.
Points to settle before filing
The Act does not say whether your existing jurisdiction permits you to leave. Transfer of registration only works where the outbound side allows a continuation or discontinuance, and the 60 day deadline for producing deregistration evidence assumes a cooperative outbound process. That question is for counsel in that jurisdiction and should be answered before anything is filed in Gelephu.
The prescribed form, particulars, documents, fee and minimum requirements for registration are set by regulations made by the designated officer, who may also waive requirements for a class of entities and adapt or exclude provisions of the Act in their application to redomiciled companies. The practical checklist comes from the Registrar.
Registration is also a discretionary decision. The Registrar may register the entity if the Registrar thinks fit, and may impose conditions. A redomiciliation is not a right.
Finally, redomiciliation changes your company law and your tax residence. Regulatory licensing, banking and the treatment of the move under the tax law you are leaving are planned alongside it.
Frequently asked questions
Does redomiciling to GMC create a new company?
No. The Companies Act 2025 states that registration under the transfer of registration provisions does not create a new legal entity and does not prejudice the identity or continuity of the body corporate, its property, its rights and obligations, or pending legal proceedings.
How long do I have to deregister in my old jurisdiction?
Sixty days from the issue of the notice of transfer of registration, unless the Registrar extends the period on application. Failure to comply is a ground for revocation, after notice and an opportunity to make representations.
Can any foreign entity redomicile into GMC?
The provisions apply to a body corporate incorporated outside GMC that intends to be registered as a company limited by shares. Registration is at the Registrar's discretion and must be refused on national security, public order or unlawful purpose grounds, or where the prescribed minimum requirements are not met.
Will I be taxed on my pre-move profits?
GMC taxes income arising after you arrive, with specific rules drawing the line at the registration date for bad debts, impairment losses, pre-registration expenses and trading stock. Where your former place of incorporation taxes the same income on an estimated basis, an approved redomiciled company may claim tax credits computed under the Income Tax Act.
Does redomiciling give me a 0% tax rate?
No. The company rate is 15%. Exemption requires separate approval as a founders company in an approved founders industry, and a rate of not less than 5% requires approval as a strategic and development company. Both approval routes close to new approvals on 31 December 2030.
The bottom line
Redomiciliation is the least discussed and most practically valuable thing in GMC's corporate law. The continuity language in the Companies Act 2025 is unambiguous, the procedure is short, and the Income Tax Act has been drafted with the arriving company in mind rather than left to practice. The constraints are real: the Registrar's discretion, the 60 day deregistration deadline, and the fact that the outbound jurisdiction has the final word on whether you can leave. Raise approval as a redomiciled company early, because the tax credit provision rewards planning and cannot be retrofitted. Basnet Law Pte. Ltd., the first incorporated law firm in GMC, advises international clients on inward transfers of registration.
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.
Sources
- Companies Act 2025 (Law No. 1 of 2025): Part 10A, ss.355 to 364A, in particular s.357 (name reservation), s.358 (application), s.359 (registration, notice of transfer of registration, 60 day deregistration evidence), s.360 (mandatory refusal), s.361 (effect of registration), s.362 (revocation), s.363 (pre-existing charges), s.364 (certificates and void share warrants), s.364A (regulations); s.142 (registered office); s.145(1) and (1A) (resident director).
- Income Tax Act 2025 (Law No. 6 of 2025): s.34G (modification of provisions for companies redomiciled in GMC); s.34H (tax credits for approved redomiciled companies); s.43(1)(a); s.13Y; s.43D.
