Brunei: Corporate Investment

ASIA/PACIFIC HOME PAGE | VIEW A DIFFERENT TAX JURISDICTION

On this Page:

- Brunei: Foreign Investment Regime
- Brunei: Incentive Regimes
- Brunei: Availability of Skilled Workers and Business Infrastructure

Brunei: Foreign Investment Regime

Brunei welcomes foreign investment. Foreign investors are invited to actively participate in the current economic diversification programme of the country. The programme hinges on the development of the private sector. The Ministry of Industry and Primary Resources was formed in 1989 with the responsibility of promoting and facilitating industrial development in Brunei Darussalam.

Oil and gas production dominates the country's economy, and the government has has only limited success in diversifying the economy. Non-petroleum sectors include tourism, garment manufacture, agriculture, forestry, fishing, aquaculture, and banking.

Major industrial projects being fostered by the Brunei Economic Development Board (BEDB) include a large methanol plant, an aluminium aluminum smelting plant and a large-scale container hub at Muara Port. In 2000, the government opened the International Financial Centre, which offers a tax-privileged regime for international companies. Islamic banking has been a particular success.

The rules governing foreign ownership of Bruneian assets are unclear. The government encourages the development of Brunei Malays in senior roles in industry and commerce, so that local participation in projects is likely to be viewed favourably.

Brunei Darussalam is flexible towards foreign equity requirements. 100% foreign equity can be considered for export-oriented industries with the exception of industries based on local resources, industries related to national food security and car dealership whereby some level of local participation is required.

Industrial activities are classified into four categories:

Industrial policies including manpower, ownership, government support and facilities remain open and flexible for all categories of industrial activities. Brunei Darussalam maintains a realistic approach where a variety of arrangements are feasible.

Only activities relating to national food security and those based on local resources require some level of local participation. Industries for the local market not related to national food security and industries for total export can be totally foreign owned. Overall, in Brunei Darussalam, any industrial enterprise will be considered.

Back to top

Brunei: Incentive Schemes

This Act provides tax relief for a company which is granted pioneer status.

In 2000, Brunei instituted a tax-privileged International Financial Centre.

Prior to formal establishment of the IFC in July, 2000, Brunei was already a busy commercial centre, as witnessed by the existing active presences in the banking sector of HSBC, Standard Chartered, Citibank, Overseas Union Bank, RHB, Maybank, Baiduri Bank, Islamic Bank of Brunei Berhad, Islamic Development Bank of Brunei and The Brunei Islamic Trust Fund.

Brunei announced its intention to deploy its sovereignty, wealth and human resources in a conservative but assertive manner. Brunei IFC offers a range of international legislation carefully crafted to permit flexible, cost effective capabilities which are right up-to-date.

Accordingly, it was announced, Brunei would be a "dual jurisdiction", whereby the international legislation offered "offshore" facilities, alongside the usual range of "domestic" legislation drawn from that of England and Wales. The jurisdictional distinction is thus jurisprudential rather than physical and the judicial system will be common to both domestic and international law.

Back to top

Brunei: Availability of Skilled Workers and Business Infrastructure

The government regulates the immigration of foreign labor out of concern it might disrupt Brunei's society. Work permits for foreigners are issued only for short periods and must be continually renewed. Despite these restrictions, the estimated 100,000 foreign temporary residents of Brunei make up a significant portion of the work force. The government reported a work force of 188,800 in 2008, with a derived unemployment rate of 3.7% (BDSY).

The country is now in a new phase of development in its drive towards economic diversification and maturity. Per capita GDP is far above most other Third World countries, and substantial income from overseas investment supplements income from domestic production. The government provides for all medical services and free education through the university level and subsidizes rice and housing.

Brunei's leaders are concerned that steadily increased integration in the world economy will undermine internal social cohesion, although it became a more prominent player by serving as chairman for the 2000 APEC (Asian Pacific Economic Cooperation) forum.

Lawyers, auditors, doctors and other professionals also have to be approved by the Government. A full range of accounting and legal services is also available with many law firms and major accounting firms having significant presences in Brunei.

Foreign land ownership has not traditionally been allowed in Brunei Darussalam except with prior approval in writing of His Majesty in Council.

Brunei also offers vast land and a variety of facilities throughout all four districts of the country. The majority of the 12 industrial sites presently developed are ready and available for occupation. Large expanses for agroforestry and aquaculture are also available. Rental terms and tenancy agreements are competitive and the sites offer a range of facilities, infrastructure and resources.

Back to top