The adoption of the Abu Dhabi Global Market (ADGM) legal framework for Gelephu Mindfulness City (GMC) marks a pivotal development in Bhutan’s economic strategy. This framework not only aligns with His Majesty’s vision for attracting foreign investment but also provides essential regulatory advantages, fostering sustainable growth that meets Bhutan’s ambitious targets for the future.
Established in 2013, the ADGM is a financial-free zone located in Abu Dhabi, United Arab Emirates. Its legal framework is primarily based on English common law, as articulated in the Application of English Law Regulations 2015. This regulation ensures that English common law, including its principles and rules of equity, applies within the ADGM, providing a familiar legal environment for international businesses. The incorporation of English law not only facilitates a predictable legal landscape but also aligns with global best practices, enhancing the credibility of the jurisdiction.
The ADGM’s legal structure is characterised by its “evergreen” nature. This dynamic aspect allows businesses operating in GMC to benefit from a continuously updated legal framework that reflects current commercial realities. The doctrine of precedent inherent in common law ensures that judicial decisions are consistent and reliable, fostering trust among investors.
The adoption of the Abu Dhabi Global Market (ADGM) legal framework in Gelephu Mindfulness City (GMC) presents numerous advantages for businesses, particularly in attracting foreign investment. First and foremost, the ADGM is recognised as a zero-tax jurisdiction, imposing no corporate or income taxes, which significantly lowers operational costs for companies and appeals to foreign investors aiming to maximise returns. Second, the ADGM allows for 100% foreign ownership of companies, enhancing investor confidence. Third, the robust regulatory framework overseen by the Financial Services Regulatory Authority ensures compliance with high standards, providing reassurance that investor interests are protected within a transparent system. Fourth, the ADGM’s legal framework facilitates ease of doing business through streamlined processes for company incorporation and licensing, reducing bureaucratic hurdles and allowing businesses to focus on growth and innovation. Finally, GMC’s strategic location as a gateway between East and West positions it favourably for access to global markets, making it an attractive hub for international trade and investment. Collectively, these factors create a compelling environment for businesses looking to establish a presence in GMC under the ADGM legal framework.
The relationship between the ADGM’s legal framework and English common law is foundational to its appeal as an investment destination. The incorporation of English law into the ADGM provides a familiar legal structure that enhances predictability for investors. This relationship not only simplifies legal proceedings but also ensures that businesses can rely on established legal principles when making decisions.
As Bhutan pursues its “Diamond Strategy,” which aims to position itself as a regional hub for trade and investment while promoting sustainable development, the predictability offered by English common law will enable GMC to attract diverse industries ranging from finance to technology, fostering an ecosystem conducive to innovation and growth.
Thus, the ADGM and Singapore Legal Framework for GMC is a significant milestone as we conclude 2024 and welcome 2025, serving as a remarkable New Year gift from His Majesty to the nation. This forward-thinking strategy enhances economic prospects through increased foreign investment and sustainable development, positioning GMC as an attractive destination for international businesses seeking stability and predictability, thus catalysing transformative economic growth in the region as Bhutan embarks on its ambitious “Diamond Strategy.” Happy New Year.
Sonam Tshering
Lawyer, Thimphu
Disclaimer: The views expressed in this article are author’s own