Meta Data
Draft: 
No
Revision of previous policy?: 
Yes
Draft Year: 
2010
Effective Start Year: 
2014
Scope: 
National
Document Type: 
Overarching Policy
Economic Sector: 
Multi-Sector
Energy Types: 
All
Issued by: 
Ministry of Economic Affairs, Royal Government of Bhutan
Overall Summary: 
The Royal Government adopted the FDI Policy 2010 (2014 Ed.) to achieve the objectives as set out in the Economic Development Policy 2010. The FDI shall be encouraged in areas that contribute to the following; i) Development of green and sustainable economy ii) Promotion of socially responsible and ecologically sound industries iii) Promotion of culturally and spiritually sensitive industries iv) Investments in services that promote Brand Bhutan v) Creation of a knowledge society. Note: Priority Sector activities are as follows: 1. PRODUCTION & MANUFACTURING including Energy: i. Hydro Power ii. Solar and wind energy iii. Other renewable energy. 2. SERVICES including Research & Development; Green & non-fossil fuel based transportation. Mining for sale of minerals in primary or raw form are not included.
Investment
Local content requirement: 
Expatriate Employment: Recognizing the need of various skills in the different businesses, the Royal Government shall address the requirements at different phases of the project so as to ensure that the project does not suffer on account of lack of human resources.---The FDI businesses shall be entitled to work permits for professional, managerial and technical expatriates. The company shall be entitled to a minimum of five work permits [...]. There shall be no restrictions on the recruitment of unskilled and semi-skilled expatriate workers required for establishment of the industry. ---The FDI businesses shall be entitled to the required number of work permits for professional, managerial and technical expatriates, if Bhutanese with requisite qualifications and experience are not available, during the initial phase of project operations. The FDI businesses, however, shall be required to train and employ Bhutanese and progressively phase out expatriates to attain a ratio of 1:5 (i.e. 1 expatriate permit for every 5 Bhutanese employed in the business) by the 5th year of commercial operation [...].---It is the Royal Government’s policy that Bhutanese nationals be trained and eventually employed at all levels within the business. The FDI businesses shall phase out expatriate workers replacing them with Bhutanese nationals.
Investment climate development: 
The Royal Government shall allow FDI in both manufacturing and service sectors. These shall be governed by project specific agreements (if any) and sector specific policies, standards and procedures. The priority sector activities are listed in Schedules I & II. [...] In addition, the Royal Government shall allow FDI in other activities with maximum foreign investors’ equity of 74 % and minimum project cost of Nu 50 million and Nu 25 million for manufacturing and services respectively. ---The FDI companies shall be entitled to the incentives and exemptions as provided by the Royal Government to similar domestic investments, unless specified otherwise in this Policy. ---The Sales Tax, Customs and Excise Act, 2000 and the Income Tax Act, 2001 and amendments thereto shall apply to all FDI businesses. ---FDI company may borrow from financial institutions in the country and the debt-equity ratio shall be as per the provisions of the Royal Monetary Authority (RMA)’s prudential regulations. [...] ---Schedule I and II: I. PRODUCTION & MANUFACTURING Priority List of Activities [include] Energy i. Hydro Power ii. Solar and wind energy iii. Other renewable energy. ---II. SERVICES Priority List of Activities [inlcude] Research & Development; Transportation & related services i. Green & non-fossil fuel based transportation. ---NEGATIVE LIST: [...] Mining for sale of minerals in primary or raw form.