As they say, “when you fail to plan, you plan to fail”. You do not need to create a complete and complex business plan at the start. However, when you need to convey your business ideas and models to others – lenders, investors and potential partners, you may need a formal business plan. If you are unsure, you can seek help from friends, consultant or approach a relevant government agency such as the Department of Cottage and Small Industry or the Regional Office for Economic Affairs and Dzongkhag Economic Development Officer.
You must have a good business idea. Ideally your business should be in an industry you have knowledge about and it should involve something you do better than anyone else. Your business should reflect your strengths and goals. Above all, it should be something you are passionate about and is something that fills an opportunity gap you have identified. You should then prepare a proper business plan.
Any Bhutanese who is 18 years of age and above can legally own and operate an industry. An industry can be a factory that produces and manufactures goods or an entity that provides essential services. Retailing and wholesaling of goods is not considered an industry.
Yes, you are required to obtain an industrial license from the Regional Office for Economic Affairs, for all types of industry. The exception to this is entertainment related business, for which, you will have to approach the Bhutan InfoCom and Media Authority (BICMA).
Please visit the nearest Regional Office for Economic Affairs or the Department of Cottage & Small Industry or Dzongkhag Economic Development Officers. Any officer there will be able to advice you on what are documents and/ or clearances are required. Some industry may require clearances from other agencies such as the National Environment Commission, Bhutan Agriculture & Food Regulatory Authority or Drug Regulatory Authority.
You must produce the following documents when visiting the RoEA. All RoEA operates on government timing.
- Filled Application for Industrial License (Form III), with endorsement from the concerned Dzongkhag or Municipal Authority. (This form can be downloaded from the website: www.moea.gov.bt)
- Original Citizenship Identity Card
- Two copies of recently taken passport sized photographs
- A legal stamp
- A valid Security Clearance Certificate.
- Copy of clearance(s) from the concerned sector(s) – if required by law
- Printed as well as a soft copy of the business plan
If all the required documents and clearances are submitted, the license will be issued within a working day.
The cost of the license will depend on whether your industry is cottage-scale or small-scale. If it is a small-scale, you will pay a sum of Nu. 3,100; and if it is a cottage-scale, you will pay Nu. 1,600.
The Ministry of Economic Affairs defines cottage–scale as those industries, whose initial investment is less than Nu. 1m and employing up to 4 people; and small-scale as those undertakings employing up to 19 people with an investment ranging from Nu. 1 to 10 m.
All types of business activities are allowed in the country with the exception of the following;
- Activities that violate any relevant laws of the country,
- Activities that threaten national security and public order,
- Activities that has harmful effects on public health, environment and Bhutanese morals and culture,
- Arms, ammunition’s and explosives,
- Production of hazardous chemicals,
- Activities based on imported waste,
- Production, display and sale of pornographic materials,
- Gambling and betting,
- Tobacco and tobacco based products
The government provides many fiscal and non-fiscal incentives to cottage and small industries; like tax holiday for certain number of years, import duty exemption on equipment’s, preferential buying by government and focused entrepreneurship training and extension support
Depending on the priority of an industry, its viability and location, you may be able to lease government forest reserved land or government land for a fixed period. Depending on the availability, you could also apply for plots in one of the existing industrial estates and service centers.