According to figures revealed at the Better Business Summit in Thimphu, Foreign Direct Investment (FDI) companies helped to create employment opportunities for 4,871 workers, of which 93 percent are locals.
A senior industry officer of Ministry of Economic Affairs, Sonam Lhamo, said as per the annual FDI Report 2017, the employment number has increased by more than 100 percent over the last 5 years.
Realizing the importance of FDI, the government has created a transparent policy environment through the economic development policy and the FDI policy that was first revised in 2010. The policy was later revised in 2014 and the revision consisted of the feedback received from the private sector.
In 2014, some of the policy provisions were relaxed, such as minimum share holding. According to the ministry, the minimum share holding for institutional investors was revised from 20 percent to 10 percent. The minimum investment level for sectors such as IT and ITES (Information Technology Enabled Services) was lowered. The access to foreign exchange for repatriation of dividend was made favourable as well. At the policy front, an integral part of the promotion of FDI, revision the policy was made incorporating the concerns raised by the private sector.
The Company’s Act stats all FDIs in Bhutan need to be incorporated. Sonam Lhamo said, “It will require the need to set up an autonomous agency whereby more professional services can be provided. More over, the company will soon be going online where by anyone can register a company from wherever they are in a day’s time.”
The ministry has also come up with an investment guide that provides direction for an investor to proceed in setting up in Bhutan. According to the ministry, “The beauty of this is, it’s available in more than 100 languages. Going one-step further, we are also working on an e-regulation that will list all the steps in getting a license and the time its takes to get one. This all shows the commitment undertaken by the government.”
Meanwhile the ministry is also working on the upcoming industrial estate that is six times larger than the existing one in Pasakha. “The commissioning of mega projects will enhance the firm power, in terms of connectivity, a lot has been done such as the east west highway which is ongoing, the Chukha bypass, the Gyelposhing Namglam highway will help a lot in improving connectivity, ” said the ministry.
“Bhutan has been able to get quite a number of FDIs, when compared regionally, we are the least in terms of attraction of foreign investments despite all the value prepositions that we have in offer.”
The next challenge for Bhutan is to attract huge FDI investments in priority sectors through a clear comprehensive strategy.