BRUNEI: COUNTRY AND FOREIGN INVESTMENT REGIME

Brunei Population, Language and Culture

Brunei was trading with China during the 6th century, and, through allegiance to the Javanese Majapahit kingdom (13th to 15th century), it came under Hindu influence. In the early 15th century, with the decline of the Majapahit kingdom and widespread conversion to Islam, Brunei became an independent sultanate. It was a powerful state from the 16th to the 19th century, ruling over the northern part of Borneo and adjacent island chains.

In 1888, Brunei became a British protectorate. Japan occupied Brunei during World War II; it was liberated by Australia in 1945. The same family has ruled Brunei for over six centuries. The sultan regained control over internal affairs in 1959, but Britain retained responsibility for the state's defense and foreign affairs until 1984, when the sultanate became fully independent.

The population was estimated at 388,000 in June 2009. It is 67% Malay, 15% Chinese, 6% indigenous and 12% other.

The official religion is Islamic. 67% of the population are Muslim, 13% Buddhist, and 10% Christian.

Malay is the official language; English and Chinese are also spoken.

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Brunei Government

Brunei is a constitutional sultanate. The Sultan and Prime Minister is Sir Hassnal Bolkiah (since 5 October 1967). In August 1998, Oxford-educated Prince Al-Muhtadee Billah was inaugurated as heir to the Sultan.

There is a Council of Cabinet Ministers which is appointed and presided over by the monarch.

Civil law is based on English common law; for Muslims, Islamic Shari'a law supersedes civil law in a number of areas. There is a Supreme Court (the chief justice and judges are sworn in by the monarch for three-year terms).

All members of the (Brunei) Court of Appeal are distinguished Commonwealth Judges. Final civil appeals are (by consent) to the Privy Council in London.

The Legislative Council met on 25 September 2004 for first time in 20 years with 21 members appointed by the Sultan; it passed constitutional amendments calling for a 45-seat council with 15 elected members. The Sultan dissolved council on 1 September 2005 and appointed a new council with 29 members as of 2 September 2005.

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Brunei Economy and Currency

Brunei has for many years been a significant player in the ASEAN region. Its very strong ties with the United Kingdom, Singapore and regional countries have led to the build-up of considerable commercial activity. The economy has been dominated by the oil and liquefied natural gas industries and Government expenditure patterns. Crude oil and natural gas production account for nearly half of GDP.

Brunei Darussalam’s exports consist of three major commodities, namely: crude oil, petroleum products and liquefied natural gas. Exports are destined mainly for Japan, Korea and ASEAN countries.

GDP at purchasing power parity was USD19.4bn (2009 est.), and per capita in the same year, was estimated at USD50,100. Unemployment in 2008 was 3.7%.

Revenues in 2008 were $6.889 billion against expenditure of $4 billion.

The currency is the Bruneian dollar, whose value has held steady against the US dollar in recent years.

In June 2009, the International Monetary Fund said that high oil prices and prudent policies have contributed to significant fiscal and current account surpluses in Brunei. That year's fiscal surplus was estimated at close to 30% of GDP and the current account surplus for 2008 at about 51% of GDP. According to the IMF the main longer-term challenges for Brunei are to expand oil and gas reserves, diversify the production base by boosting private sector activity, and enhance fiscal management.

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Brunei The International Financial Centre

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.

See other sections for descriptions of the commercial basis of the IFC, its regulatory structure and its corporate forms.

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Brunei Entry and Residence

Nationals of Austria, Germany, Malaysia, The Netherlands, New Zealand, Sultanate of Oman, Singapore, South Korea, the United Kingdom and the UAE are exempted from the requirement to obtain a visa for visits not exceeding 30 days.

Visas are also waived for visits of not more than 14 days for nationals of Belgium, Canada, the Czech Republic, Denmark, France, Hungary, Indonesia, Italy, Japan, Laos, Luxembourg, Republic of Maldives, Norway, Peru, Poland, The Philippines, Slovakia, Spain, Sweden, Switzerland, Thailand and The Principality of Liechtenstein.

The maximum stay for United States nationals is 90 days before a visa is required.

Nationals of Australia and Qatar are issued visa on arrival upon their arrivals at the Brunei International Airport only for visits not exceeding 30 and 14 days respectively.

All other nationals entering Brunei Darussalam must have visas obtainable from any Brunei Darussalam diplomatic mission abroad.

Persons entering Brunei Darussalam to take up employment must arrange with their employers to obtain employment passes prior to their arrival. Their spouses and children under 18 years of age of pass holders are required to obtain dependents' passes.

Every foreigner who intends to work in Brunei Darussalam must have a valid Employment Visa authorised by the Department of Immigration and National Registration and is issued at the Brunei Embassy or High Commisioner.

Maximum length of the validity of an employment visa is 3 years. Processing usually takes 7 working days.

The employer must have a quota license from the Labour Department and needs an approval letter from the work pass section of the Immigration and National Registration Department. The worker should have a valid passport/travel document recognised by the Brunei Director of Immigration and National Registration. The passport must have a validity of 6 months before entering the country.

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Brunei Business Environment

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.

Generally speaking, there is no restriction on the types of businesses that may be set up. However, businesses where the public interest is directly affected, such as banks, finance companies, motor vehicle insurers, money lenders and travel agents must obtain special licences from the appropriate Government agency.

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.

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. Policies relating to ownership allow for full foreign ownership, majority foreign ownership and minority foreign ownership, as per the type of industry and situation.

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.

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Brunei The 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. Brunei Darussalam offers all investors security, stability, continuity, confidence and competitiveness.

Competitive investment incentives are ready and available for investors throughout the business cycle of start up, growth, maturity and expansion. The Investment Incentive Act which was enacted in 1975 provides tax advantages at start up and ongoing incentives throughout growth and expansion that are comparable if not better than those offered by other countries in the region.

The Investment Incentives Act makes provision for encouraging the establishment and development of industrial and other economic enterprises, for economic expansion and incidental purposes.

Investment incentive benefits vary from one program to other. Amongst the benefits are: