Government Unveils Revised FDI Rules and Regulations 2025 to Boost Investment Climate

…𝒄𝒍𝒆𝒂𝒓𝒆𝒓 𝒑𝒓𝒐𝒄𝒆𝒅𝒖𝒓𝒆𝒔, 𝒃𝒓𝒐𝒂𝒅𝒆𝒓 𝒔𝒆𝒄𝒕𝒐𝒓𝒂𝒍 𝒐𝒑𝒑𝒐𝒓𝒕𝒖𝒏𝒊𝒕𝒊𝒆𝒔, 𝒂𝒏𝒅 𝒆𝒏𝒉𝒂𝒏𝒄𝒆𝒅 𝒊𝒏𝒗𝒆𝒔𝒕𝒐𝒓 𝒄𝒐𝒏𝒇𝒊𝒅𝒆𝒏𝒄𝒆

By Yeshi Dolma

The government has unveiled the revised Foreign Direct Investment (FDI) Rules and Regulations 2025, marking a significant step toward enhancing the nation’s appeal to foreign investors. The move reflects a deliberate strategy to address longstanding barriers to investment, improve regulatory clarity, and simplify the process for international businesses seeking to establish operations in the country.

Lyonpo Namgyal Dorji, Minister of Industry, Commerce and Employment, explained that the government’s strategy is built on predictability, transparency, and investor-friendliness. He said, “The government’s strategy centres on creating a more predictable, transparent, and investor-friendly environment. The FDI Rules & Regulations 2025 is designed to reduce administrative hurdles, strengthen regulatory clarity, and align our investment framework with global best practices.”

The revised framework aims to reduce uncertainty for foreign investors through clearer compliance procedures and the introduction of defined turnaround times for regulatory approvals. These measures are intended to ensure that businesses can navigate the investment process more efficiently while broadening sectoral opportunities to enhance the country’s competitiveness.

Among the key reforms, the new regulations streamline approval processes, reduce documentary requirements for registration certificates, and cut down on administrative delays. Turnaround times, which were previously absent in many areas, have now been formalized, allowing investors to plan with greater certainty. In addition, regulatory agencies are required to develop service charters that outline procedural aspects and provide clarity on the steps needed for approvals. This ensures that businesses face fewer ambiguities when seeking regulatory clearances.

The revised FDI framework also lowers barriers to entry in various sectors, including adjustments to minimum project costs and increases in maximum foreign ownership levels. The agriculture sector, in particular, has seen a major policy shift, allowing up to 100 percent foreign ownership. This step opens new avenues for investment in a sector central to the country’s economy, signaling the government’s intent to attract innovative approaches, technology, and capital to enhance productivity and value addition.

One of the persistent challenges for foreign investors¬-access to foreign currency- has also been addressed under the new rules. Previously, difficulties in obtaining foreign currency for the import of raw materials and operational expenses, as well as the repatriation of dividends, created barriers for FDI projects. The revised framework now facilitates smoother access to foreign currency, providing investors with the financial flexibility necessary to operate effectively and confidently within the nation.

Since the launch of the revised FDI Rules and Regulations in August 2025, the Ministry of Industry, Commerce and Employment has approved four FDI projects, while an additional fifteen projects have been approved in principle, with FDI registration certificates issued. This marks an increase in the number of projects approved compared to the previous year and demonstrates early positive responses from the investment community. While the full impact of the reforms will be evident in the comprehensive annual FDI report due at the end of the year, these initial approvals reflect growing investor confidence in the updated regulatory framework.

Lyonpo Dorji emphasized that the reforms are expected to improve the ease of doing business, increase investor confidence, and ultimately support a more robust inflow of foreign investment in the years ahead. He said,
“By addressing longstanding procedural bottlenecks, clarifying regulatory guidelines, and broadening sectoral opportunities, the government aims to create an environment where both domestic and international investors can thrive.”

The 2025 FDI Rules and Regulations are structured to align the nation’s investment framework with global best practices, signaling a commitment to creating a transparent and predictable environment for businesses. Investors can now anticipate more consistent and timely regulatory processes, reducing the risk of delays or uncertainty that previously deterred foreign capital. By making these systemic improvements, the government hopes to position the nation as a competitive and attractive destination for foreign direct investment.

In essence, the new framework reflects a strategic shift toward openness, efficiency, and clarity. It highlights the government’s recognition of foreign investment as a critical driver of economic growth and its commitment to creating the necessary institutional and regulatory environment to support sustainable and diversified development.
With clear procedural guidelines, streamlined approvals, enhanced access to foreign currency, and expanded ownership opportunities across sectors, the nation is signaling to global investors that it is ready to provide a stable and predictable investment climate. The early approvals of new projects indicate that these measures are beginning to yield tangible results, paving the way for a stronger and more diversified foreign investment landscape in the near future.