FDI ANNUAL REPORT

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Department of IndustryMinistry of Economic Affairs

Amidst the global pandemic, theDepartment has approved a total of 10 FDIprojects, five in the manufacturing sectorand five in the service sector. While thenumber of projects approved declinedslightly during the year as shown in the chartbelow, the value of projects approvedincreased by 80 percent; up from Nu. 1166million to Nu. 2104 million.

FDI TREND

PROJECT APPROVAL

6 4 % I S F R O M A S I A

Year on year, Bhutan continuesto receive FDIs mostly from

Asian countries.

ORIGIN OF INVESTORS

Top Source Countries in Asia:

From within Asia, India remains the majorsource of investment in Bhutan with 47 %followed by Singapore (19 %) and Thailand(11 %).

TREND IN SOURCE COUNTRIES

2020

F D I P R O J E C T S A S O F 2 0 2 0

The total number ofprojects stand at 92 with 10 new projectsapproved during theyear . Two FDIprojects wereconverted todomestic projectduring the year .  

2019: 83

2020:92

A total of 9 projects were issuedFDI Registrat ion Cert i f icate in2020, of which 3 projects wereapproved and remaining 6 areunder process for approval .

PROJECT SIZE

Share of IT/ITES increased from 19 %

to 21 % while that of hotel decreased

from 42 % t0 39 %. Share of power

intensive manufacturing increased

from 5 % to 8 % of overall FDI in the

country.

F D I B Y L O C A T I O N

66 % of FDI projects approvedare located in Thimphu, Paro andChukha with highest number (38%) being in Thimphu.  

44 % of the FDI projects in themanufacturing sector arelocated in the industrialestates/parks. Breakups are asshown in the chart below.

P R O J E C T S I N I N D U S T R I A LP A R K / E S T A T E

Status of projects64 % of approved projects have

started commercial operation.

C H A N G E I N O V E R A L L S E C T O R A LS H A R E

S E R V I C E S E C T O RD O M I N A T E S O V E R A L L

F D I W I T H 7 0 % .

Attractive Sectors for 2020

Unlike the previous years, the year2020 saw only one project in theHotel . Manufacture of Ferro Alloysand IT are the most attract ivesectors for FDI in 2020.

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INR 766.38 m & US $ 22.98 m

2019

The contr ibut ions of FDI project to the economy is captured through annual surveys carr ied out . Annual survey for the year ending 2019 was conducted in2020 and covered al l FDI projects including those under construct ion. Fewcompanies were not able to provide data as they were closed during the yeardue to the pandemic. Avai lable data from the respondents revealed some of thetangible impacts made by FDI projects . The contr ibut ion are:

Capital inf low from foreign investors were mostly received in convert ible currencyduring the year 2019. Annual survey revealed an amount of US$ 22.98 mil l ion beingreceived which is almost the same amount received during the previous year .Inf low from Indian investors were recorded at INR 766.38 mil l ion, three t imes theinflow received in the year 2018.

A total of 4 ,486 Bhutanese were directlyemployed as regular employees by theoperat ing FDI projects as of December,2019. With 777 Bhutanese employed ascasual workers, FDI projects employed atotal of 5 ,263 Bhutanese during the year .

EMPLOYMENT BY GENDER:

BHUTANESE

56%44 %

2. EMPLOYMENT

1. CAPITAL INFLOW

FDI Contribution in 2019

2018

INR 267.5 m & US $ 20.8 m

EMPLOYMENT TREND

FDI companies employed a total of 5 ,752 employees ( local & expatr iate) up from5307 employees in 2018, an increase of about 8% from the previous year .

AVERAGE EMPLOYMENT

GENERATED: Manufacturing Vs.

Service as of 2019

53 100

Tax contr ibut ion made by operat ing FDI companies as of 31st December, 2019 asper the survey stands at Nu. 1530.65 mil l ion. The contr ibut ion is a decl ine by 12 %from that of 2018. The decl ine could part ial ly be explained by few companiesfai l ing to submit the annual survey during the year .

3. TAX CONTRIBUTION

Tax composit ion

EXPATRIATES

25 Bhutanese for 1 Expat

FDI companies employed a total of 183 regular foreign workers, which isonly 3 .9 % of total regular employeesin the companies. For every s ingleexpat working in the country, thereare 25 locals employed. *Day workersfrom across the border are notcovered in the analysis .

FDI Contribution in 2019

4895

2018 2019

57525307

2017

FOR FURTHER INFO:

FDI Division

Department of Industry

Ministry of Economic Affairs

Email: investbhutan@moea.gov.bt

www.moea.gov.bt

+975-2-337623/330435 Fax: +975-2-337624

4. EXPORT CONTRIBUTION: FDI in Manufacturing

Manufactur ing sector contr ibutes a s ignif icant share toward the export basket . Intotal , 10 FDI projects in the manufacturing sector have exported goods worth Nu.3.7 bil l ion of which Nu. 3 .6 bi l l ion is to India and the remaining to other countr ies .Exports dur ing the year have decl ined as compared to the previous year . Thereasons for the decl ine is the drop in the number of manufactur ing projects withthe conversion of 2 FDI projects to domestic project . This export f igure alsoexcludes the export of electr ic i ty by Dagachhu Hydropower Corporat ion Limited, aFDI project .