Dividend investing means investing in stock market, primarily for regular passive income – cash dividend.

Dividend is just one of the returns of investing in stock market. However, people who need complementary income stream do it.

Some people keep 100% of their stock portfolio in dividend stock, letting the investment portfolio grow with dividend income.

But what I am telling here is about stock investors of other countries, and not that of Bhutan.

Does it mean dividend investing in Bhutan doesn’t work, and no individual stock investor can do it in Bhutan?

Dividend investing in Bhutan

To start with, there are only 18 publicly traded companies in Bhutan. It is too few for a country’s stock market.

There aren’t new entrant in the market through an IPO. Do you remember when was the last IPO in Bhutan?

Shareholders are not distributed well across all sections. The majority of investors are super rich individuals, and institutions.

Our government, in view of maintaining income parity, doesn’t care these companies even not declaring any dividend.

You will be surprised to know how some companies never gave dividend even once in a decade or more.

How Dividend Actually Work

In other countries, companies give dividend every quarter which ensures regular income streams for the investors.

In Bhutan, the dividend payouts aren’t quarterly or half-yearly. It’s instead done annually in Bhutan – in Q1 of following year.

This won’t go well if you are investing in Bhutan stock market for regular passive income stream out of your investment.

Tax Component on Dividend

In Bhutan, dividend income upto Nu.30,000 isn’t taxable. Once it crosses this threshold, 10% will be deducted at source as TDS.

During your tax returns, you can claim refund if you have other allowable deductions like a bank loan taken to invest in shares.

What Is the Next Best Choice

Personally I don’t like dividend. Certainly I’m not investing in Bhutan stock market for it.

If you don’t need a regular income stream, going for a long hold is better. If you feel restless, do swing or trend trading.

They work well, as our government has not yet implemented capital gain tax on equities and debt instruments.

What do you think of dividend investing in Bhutan? You think it’s a good investing strategy in Bhutan? 

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