A Peek Into The Proposed Draft Of Bhutan’s Foreign Direct Investment Policy 2019

Email

The process of FDI approval and clearances will be fast-tracked.

(Source: Asian Development Bank)

 

By Tshering Dorji Kuensel

Should the draft of Bhutan’s Foreign Direct Investment (FDI) Policy 2019 come through, small-scale production and manufacturing activities will be allowed to explore partnerships with foreign partners and investors. Moreover, the process of approval and clearances will be fast-tracked.

This is one of the major changes in the proposed draft of the 2019 FDI policy, which is still pending for comments from the Gross National Happiness Commission (GNHC).

However, the requirement that FDI in the manufacturing and service sectors with maximum foreign investors’ equity of 74 percent and minimum project cost of Nu 50m and Nu 25m for manufacturing and services respectively (except for those in the Negative List), remains intact.

Some changes proposed in the draft FDI policy

The draft policy states that the government will allow FDI in selected small-scale production and manufacturing activities to foster the induction of new technology, skills and to enhance market access.

Photo: FDI Report 2017

 

The minimum project cost of these projects will be Nu 5m and the maximum foreign investors’ shareholding shall be at 49 percent.

While investors from India are allowed to invest in INR, exception is made for small-scale activities.

In addition to the two schedules of priority list stipulated in the existing FDI policy, another schedule is added to the priority list to accommodate small-scale activities.

Proposed visa rules

As for visas, the draft FDI policy only permits multiple entry visas and route permits to foreign investors, board of directors and expatriate workers.

In the existing policy, multiple entry visas, route permits and exemption of international tourist tariff is extended to foreign students enrolled in Bhutanese schools and institutes, patients and escorts visiting Bhutan for treatment in addition to the above.

The new policy also mandates the FDI division to function as an investment promotion agency and to provide single window services to FDI businesses in the country.

“The department shall approve/reject proposals falling under the Priority Sector Activities and Small-Scale Activities whereas for the Other Activities, the authority shall rest with the Project Approval Committee constituted within the Ministry,” the draft policy states.

The existing policy also prescribes the basis for approval and denial of proposed FDI activities, which is now removed from the draft. The negative and prohibited list remains unchanged.

The criterion in the existing policy is based on Gross National Happiness principles, employment, revenue contribution, foreign exchange earnings, value addition and innovation.

Some new sectors proposed in the draft

The new schedule in the priority list comprises of value-added agro-based products like dairy based processing, fruits, vegetable, food and confectionery processing, herbal and medical products and honey-based products.

 

Photo: Bhutan Natural

 

Another section in the new schedule includes forest-based production like value-added hand-made paper products, integrated wood and bamboo products and cosmetics. Another section on souvenir and ceramic products has also been added to attract more FDIs.

The draft policy has removed foreign investment in hydropower. In the existing policy, FDIs in the hydropower are based on the sustainable hydropower policy. Currently FDI in small and micro hydro power plants are permitted. 

However, the draft FDI policy allows foreign investment in other renewable energy but the size of investment is based on the Alternative Renewable Energy Policy of 2013.

In education, the new policy requires a minimum of Nu 300m worth of investment and 74 percent foreign ownership in contrast to the Nu 200m investment and 100 percent ownership in the existing policy.

As for infrastructure facilities, the existing policy allows investment based on PPP. However the new policy allows 100 percent investment.

For instance, FDI in waste management facilities, as per the existing policy, should be returned to the government upon the expiry of the term. This clause has been removed in the draft FDI policy.

 

This article first appeared in Kuensel and has been edited for Daily Bhutan.

 


Related Posts

Bhutan To Revise 3rd Foreign Direct Investment Policy To...

Most of the FDI companies are in the hotel sector today, therefore it is important for us to diversify.

Mar 29, 2019 18:32

Bhutan’s Foreign Direct Investment Saw 10 Fold Increase From...

The jump in figure is due to the large number of capital-intensive projects (such as hotels) being approved in 2018.

Feb 24, 2019 13:51

From Bhutan To The World: Working Remotely For Foreign Firms To...

A career fair will be held in Thimphu on January 29 where one can find opportunities to work from home with industries...

Jan 16, 2019 14:22

Bhutan – A Hidden Gem For Foreign Direct Investments

Of the total FDIs, 65 percent of the investors are from Asia, 25 percent from Europe, nine percent from America and the...

May 24, 2018 16:58

According To The World Bank, Bhutan Ranked 81st In Ease Of Doing...

The rankings were determined by sorting the aggregate scores on 10 parameters, each consisting of several indicators.

Nov 05, 2018 15:45

Austrian Delegation Seek Investment Opportunities In Bhutan And...

According to the Austrian delegates, eight companies from diverse sectors such as energy, engineering, tourism and...

Dec 06, 2018 12:42

Latest

News

USD 25.3m Green Climate Fund To Address Climate Change Adaption In Bhutan

The project can help address climate change adaptation challenges facing Bhutan, particularly in the agriculture sector.

Jan 15, 2020 16:28

Bhutan’s Target To Become A 100% Organic Nation By 2020 Delayed – Pushed To 2035

Efforts to translate Bhutan’s organic vision into reality has met with various challenges thus far.

Jan 04, 2020 23:28

Features

Enduring Values From The Tale Of The Four Harmonious Friends

A parable steeped in Buddhism, the didactic tale of the four harmonious friends is regarded as the national folklore of Bhutan.

Jan 23, 2020 17:58

How The Advent Of Internet Services Has Changed The Isolated Highlanders Of Bhutan

Many Layaps agreed that they find their lives much easier compared to just a decade ago.

Jan 21, 2020 21:48

Sports

Karma – Female Archer From Bhutan Qualified For Tokyo 2020 Olympic Quota

Karma has been specialising in Olympics-style archery since 2009.

Nov 30, 2019 13:18

Bhutan’s Pelden Wangchuk Wins 10th Edition Of Tour 0f Dragon Mountain Bike Race

This year, the race also saw the highest number of female participants compared to past years.

Sep 10, 2019 01:08

Business

Economic Roadmap Needed To Steer Bhutan Towards Higher GDP Growth

The Lyonchhen said that the economic figures will improve in 2020 as 70 percent of the capital investments still lie unused.

Jan 17, 2020 23:38

Celebrating Bhutan’s entrepreneurs: Tashi Wangdi of iHub

This story is part of an exclusive feature by Yeewong Magazine in Dec 2018 on celebrating entrepreneurship in Bhutan.

Jan 12, 2020 23:38

Travel

Forging the Unbeaten Trail Towards Wangdue Nye

When you dedicate year 2020 to hike on unbeaten trails in Bhutan.

Jan 21, 2020 10:58

Make Your Own Personalised Stamps And Discover Bhutan’s Postal History At The Postal Museum

The Bhutan Postal Museum in Thimphu is also a major tourist attraction.

Jan 18, 2020 21:08

Lifestyle

Bhutan- The Wedding Destination in Asia

Bhutan, a Himalayan kingdom, is a landlocked country located between China and India. With its reputation for mystery and magic, stunning...

Jan 23, 2020 09:07

Relish Your Taste Buds With 8 Delectable Bhutanese Staple Food

One of the best places to try authentic Bhutanese cuisine is through a homestay, where you will get to sample what most locals eat at home.

Jan 19, 2020 21:08

Subscribe to our newsletter

Never miss out on new happenings and news stories!

Download Daily Bhutan Mobile App

Connecting with us just got easier!