Bhutan: Investing

FDI in Figures

The share of FDI in the GDP of Bhutan remains relatively low compared to other developing countries. Geographical factors hold back the region; the country is hemmed in and very mountainous, which makes infrastructure construction very difficult and costly (Bhutan does not have any railways, even though Indian Railways, the Indian rail company, intends to link South Bhutan). In addition, FDI development is limited by a substantially controlled system and an inadequate policy in the areas of industrial license, trade, work and finance. The shortage of skilled labor is also a hindrance to development.

The hydro-electric energy production and construction sectors are the ones that attract the most investment.

	Bhutan	South Asia	الولايات المتحدة	Germany
Index of Investor Protection	4.0	5.0	8.3	5.0

Source: Doing Business

Note: The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	30	15	12
FDI Stock (million USD)	130.6	148.2	159.9
Number of Greenfield Investments***	-	2.0	-
FDI Inwards (in % of GFCF****)	5.6	12.1	-
FDI Stock (in % of GDP)	9.8	12.2	-

Source: UNCTAD - Last Available Data

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

Tax Rates

Sales Tax.: 0% - 100% depending on the product (Revised frequently in accordance with the Sales Tax, Customs and Excise Act of the Kingdom of Bhutan, 2000).
Company Tax: 0.35
Withholding Taxes: Dividends: 10%. Interests: 0.1%.
Bilateral Agreement: Bhutan and Egypt are not bound by a taxation agreement.
Social Security Contributions Paid By Employers: 1.1%

Investment Opportunities

Tenders, Projects and Public Procurement: Asian Developement Bank, Proposed Projects in Asia
DgMarket, Tenders Worldwide
Setting Up a Company: Consult Doing Business Website, to know about procedures to start a Business in Bhutan.

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