Bhutan Market Entry

Bhutan Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

Distribution and sales channels, use of local representatives, other factors affecting sales

In general, we recommend looking for a local consultant or partner who is closer to local traders and familiar with customs and laws. Traders in Bhutan, just like in India or Nepal, rely on personal contact, therefore it is necessary to make at least one trip to the area and meet a possible future partner in person. However, the whole process until the conclusion of the contract takes somewhat longer than what European traders are used to. Both state and private Bhutanese companies can be partners of Czech companies. Conditions for starting a business, setting up an office, etc. are governed by the Company Act of 2000 ( http://www.asianlii.org/bt/legis/laws/caotkob2000301/ ).

A suitable source of basic information can be the newly honorary consul of Bhutan in the Czech Republic, Mr. Jaroslav Hubáček. Contact details can be found here: https://www.mzv.cz/jnp/cz/encyklopedie_statu/asie/bhutan/kontaktni_cizi_urad/-mzv-publish-cz-o_ministerstvu-adresar_diplomatickych_misi-cizi_urady_pro_cr-bhutan_honorarni_konzulat_bhutanskeho.html

Forms and conditions of operation on the market

According to cheeroutdoor.com, Bhutan benefits from the preferential conditions of duty-free access to the EU market under the EBA (Everything But Arms) program, which fall under the GSP. However, Bhutan has not yet been able to take advantage of these benefits due to the lack of goods for export or the poor quality of goods that do not pass the EU requirements, etc. The Bhutanese economy is very closed, the entry of consumer goods of foreign origin and also goods that can worsen the quality of the environment is prevented. The import of goods into Bhutan is governed by the “Rules and Procedures for Imports from Third Countries, 2002”, which govern imports from all countries except India. The rules impose an obligation to obtain an import license for the import of goods, while completely prohibiting the import of pornography, narcotics and psychotropic substances and significantly restricting the import of weapons and ammunition, agricultural products, medicines, chemicals and fertilizers, used machinery, plastic products,

Marketing and communication

Advertising in the press and commercials on television or radio can be used for promotion and marketing. Presentation via the Internet is very popular.

Issues of intellectual property protection

Bhutan is a member of WIPO (World Intellectual Property Organization) and a signatory to five international conventions:

  • WIPO Convention (1977),
  • Berne Convention (1948, Literary and Artistic Works),
  • Paris Convention (2004, Industrial Property),
  • Madrid Agreement and Madrid Protocol.

The protection of intellectual property in Bhutan is dealt with in a number of laws, most notably the “Copyright Act”, according to which the protection of intellectual property lasts for the lifetime of the author and a further 50 years. Applied art is protected for 25 years from its creation. Collective and anonymous works are protected for 50 years from their publication. This issue is also dealt with by the “Industrial Property Act” (2001), which distinguishes between patents, trademarks, industrial design, etc. The Ministry of Economic Development is responsible for this issue, which has been issuing the necessary registrations since 2009. The government is aware of the importance of intellectual property protection and aims to draft a comprehensive law on the protection of intellectual property.

The Ministry of Education announced the National Intellectual Property Policy 2018 (NIPP) in March 2018 to provide intellectual property (IP) rights to promote creativity and innovation for social, cultural and economic development. The policy was approved during the 151st Cabinet meeting held on 13 February 2018. The NIPP sets out seven strategic objectives towards a more balanced, equitable and integrated approach to the use of the IP system. These goals include creating balanced and development-oriented IP laws and regulations, establishing an effective institutional framework and increasing the strategic use of IP, and greater use of the IP system for the protection of traditional knowledge, genetic resources and traditional cultural expressions. Furthermore, facilitating technology transfer, improving access to the results of innovation and creativity, strategic participation in the international IP system and incentives to support innovation and creativity. The policy also sets out the government’s role and responsibility in delivering each of the strategies.

Public procurement market

Public contracts are published by individual line ministries or state enterprises authorized by them, most often on the website of the Ministry of Economic Development ( see http://www.moea.gov.bt/ ) and on the website of the Construction Development Board www.cdb.gov. bt. Since Bhutan is a member of SAARC, all sector-wise procurements are also advertised on the SAARC website.

Payment terms, payment ethics and resolution of commercial disputes

There is currently no legislation in force in Bhutan that clearly defines the resolution of commercial disputes, and there is no commercial mediation center established in the country to deal with dispute resolution. Arbitration procedures are specifically designed for the construction industry (Construction Development Board for Bhutan). However, Bhutan is a member of the “Chartered Institute of Arbitrators” (CIArb) in an effort to adopt dispute resolution methods. Disputes are recommended to be settled amicably.

The most serious limitations of the Bhutanese economy are a small internal market, inadequate infrastructure, high costs associated with the transportation of goods, difficult access to financial resources (credit), inconsistent economic and trade policy, lack of professionally trained workforce and management skills of Bhutanese partners, low labor productivity. Without removing these obstacles, it will not be possible to increase the capacity of Bhutan’s nascent private sector.

However, Bhutan also offers competitive advantages in the form of political stability, passable English skills, connections to the Indian market, low energy prices. The biggest problem is the connection of the Bhutanese economy to India and the strong competitive presence of Indian companies, whose presence the government strongly supports at the expense of other foreign partners (mainly China).

Visas, fees, specific conditions for traveling to the territory

Visas, customs regulations:

You can travel to Bhutan on a tourist visa / permit, but you must undergo a mandatory 5-day quarantine (6 nights to be exact) in a hotel facility. Visas and permits must be processed through a licensed tour operator. Currently, only arrivals by plane to Paro are valid.

It is possible to travel to Bhutan either at the invitation of the government or as a tourist. Tourists must travel only in groups on pre-arranged and paid routes with an official tourist guide. All formalities must be completed before arrival in the country through a travel agency, or through a Bhutanese tour operator or one of their international partners.

Before receiving a Bhutanese visa, each traveler must pay the so-called Minimum Daily Package fee, which amounts to USD 250 per person per night during the high season in the months of January, February, June, July and December, and USD 200 per person per night after during the low season in the other months. The Minimum Daily Package is paid before traveling to Bhutan and without this payment no Bhutan visa is issued.

Entry conditions and visa application information can be checked at the Embassy of Bhutan, e.g. the Embassy of Bhutan in Brussels, email: [email protected], or on the website of the Ministry of Foreign Affairs of Bhutan: http://www.mfa.gov.bt /visa or the official website of the Bhutanese government, which is dedicated to the conditions of travel to the country: http://www.tourism.gov.bt/plan/visa.

Each room can import personal belongings, a mobile phone, a camera, a video camera or other electronics intended for personal use without duty, and a person over 18 can also bring in a maximum of 1 liter of alcohol in a maximum of 2 bottles.

Duty-free importation of cigarettes or other tobacco products is not permitted in any quantity, not even for personal use. A maximum of 200 cigarettes or 50 cigars or 250 grams of other tobacco products can be imported into Bhutan for personal use and is subject to sales tax (Salex Tax) in the amount of 100% and import duty in the amount of an additional 100%, with proof of payment ( Sales Tax Certificate) must be carried by the passenger at all times and presented in the event of an inspection.

The export of antiquities from Bhutan without special permission is prohibited. Travelers should therefore exercise caution when purchasing items that may be considered antiques to avoid confiscation and possible penalties.

There are severe penalties for drug possession, use or trafficking. Convicted offenders can expect heavy fines and lengthy prison terms.

Vaccination:

Tourists heading to Bhutan are recommended to be vaccinated against typhoid fever, jaundice type A and B and tetanus, possibly against Japanese encephalitis or malaria. Tourists who come into contact with animals should not neglect the rabies vaccination. Vaccination against yellow fever is mandatory for travelers arriving in Bhutan from countries of origin or transit where the disease is endemic.

Climate:

The best time to travel to Bhutan is between March to May and September to November. Bhutan lies on the southern slopes of the High Himalayas, many of whose peaks on the border with China exceed 7,000 meters above sea level. The climate is monsoonal, extremely cold in the mountains, high-altitude. The summer monsoon rains from July to October bring the most precipitation.

Bhutan Market Entry