In this section:
International Financial Centre
International Business Company
International Limited Partnership
Corporate Forns in the Domestic Sector
Since the establishment of the International Financial Centre (BIFC),
Brunei is a "dual jurisdiction", whereby
the international legislation offers "offshore"
facilities, alongside the usual range
of "domestic" legislation drawn from that
of England and Wales.
The business forms that are available inside the BIFC are described
first; the forms that are available outside
the BIFC are described here.
Brunei International Financial Centre
Legislation passed in 2000 introduced a number of additional corporate
forms which are available to business
operations in the International Financial
Centre, including International Business
Companies, International Limited Partnerships,
and International Trusts.
The Registrar of International Business Companies and Limited Partnerships
is the lawyer in charge of a Registry,
which, for confidentiality and administrative
reasons is a part of BIFC. The Registry
is within MOF and quite separate from
the domestic registry.
The Registered Agents and Licensed Trustees Order, 2000 ('RATLO')
restricts the provision of 'international
business services' to companies licensed
under that Order. There are 12 (2010)
Registered Agents and Licensed Trust Companies
registered under RATLO. All establishment
and compliance documents (including Certificates
of Due Diligence) of International Business
Companies (and Limited Partnerships) are
filed by these licensed trustees.
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Brunei International Business Companies
The incorporation of an IBC is governed by the International Business
Company Order, 2000 (IBCO), which makes
provision for tax-free corporate facilities
at highly competitive cost levels. Brunei
is more concerned with attracting a critical
mass of good business than to achieve
a fee-based income stream at a high cost
IBCs may be limited by shares, limited by guarantee, limited by shares
and guarantee, of limited duration, Dedicated
Cell Companies, created by conversion,
re-domiciled or discontinued in Brunei.
Foreign or overseas companies may register
as Foreign International Companies, and
also operate tax free. The BIFC has been
steadily progressing and has registered
more than 3,000 IBCs.
The total Government Fee for company incorporation and year one maintenance
of an IBC is US$500, while renewal fees
from year 2 onwards are set at US$400.
IBCs are incorporated by trust companies subscribing to Memorandum
and Articles. A Certificate of Due Diligence
must be filed with the constituent documents.
This Certificate contains an undertaking
by the trust company concerned that the
IBC complies with applicable provisions
of IBCO and that due diligence in respect
of beneficial owners and the source of
finding has been conducted, or will be
conducted prior to commencement of business.
A similar certificate is required at every
Standard Memorandum and Articles for the three classes of limited
company are Scheduled and may be adopted
in full or as modified. Other than bearer
shares, which are prohibited, an IBC may
issue the usual wide range of shares and
classes of shares, including Dedicated
Cell shares, options, warrants or rights
to acquire securities of an IBC, including
Directors may be individual or corporate, as may secretaries. A Resident
Secretary provided by a Trust Company
is mandatory. Audits are optional (except
as required under banking, trust company,
insurance and dealing licensing provisions).
Conversion/continuance occurs where permitted by the former domicile,
subject to certain requirements including
solvency and registration of (IBCO-compatible)
Memorandum and Articles. There is provision
for the Court to strike from the Brunei
register a company which continues to
exist in another jurisdiction following
The records of an IBC may only be searched subject to the prior grant
of certain consents, except where circumstances,
such as criminal activity, are adjudged
by the Registrar to have arisen. This
applies both to the Registrar's records
and those of the IBC held at its registered
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Brunei International Limited Partnership
Under the International Limited Partnerships Order, 2000 (ILPO),
an ILP consists of one or more general
partners (of which one must be a trust
company or subsidiary thereof, an IBC
or another ILP) and any number of limited
partners. An ILP may be formed for any
lawful purpose, undertaken in or from
within Brunei Darussalam or elsewhere.
It does not carry on business with any
persons resident in Brunei Darussalam,
and prospectus provisions may apply to
offers of securities.
In an ILP, a general partner is personally liable for all the debts
and obligations of the ILP but, except
in so far as the partnership agreement
or ILPO otherwise provides, a limited
partner is not so liable. At the time
of becoming a limited partner, a limited
partner contributes, or undertakes to
contribute, a stated amount (or property
valued at a stated amount) to the capital
of the partnership. Provision for confirmation
of value exists.
Every ILP must:
Except as permitted or required under ILPO, a limited
partner shall not take part in the conduct
of the business of an ILP, and all letters,
contracts, deeds, instruments or documents
whatsoever must be entered into by the general
partner on behalf of the ILP. If a limited
partner, other than a trust corporation
acting in such capacity for the purposes
of ILPO, takes part in the conduct of the
business of the ILP in its dealings with
persons who are not partners, then, in the
event of the insolvency of the ILP, the
limited partner may be liable as though
he or she were a general partner.
a name which includes the words "International
Limited Partnership" or the letters
- maintain a registered office in Brunei at the registered office
of a trust corporation; and
at its registered office such accounts
and records as are sufficient to show
and explain the ILP's transactions and
to disclose with reasonable accuracy,
at any time, the financial position
of the ILP at that time.
ILPs are registered through a trust corporation by the payment of
a year one fee of US$500. The annual renewal
fee thereafter is US$400.
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Brunei International Trusts
Brunei has very comprehensive international trust legislation, which
will appeal both to private clients as well
as major corporations. For the private clients,
provision is made for asset protection trust
as well as special trust regimes. Under
this regime, it is not the beneficiary who
enforces a trust but an independent Enforcer.
This addresses certain tax and security
For the major corporations, commercial purpose trusts may be created
whereby it is not necessary to have an individual
beneficiary. Such trusts are widely used
for special purpose vehicles (SPV) and planning,
varying from project finance to securitization
and segregation. The legislation also provides
a more modern definition of inquired charities.
This enables charitable trusts to be established
to protect the environment and historic
buildings, for example.
Under the International Trust Order, 2000 ('ITO'), an IT must be
in writing, settled by a non-resident of
Brunei, declared in its terms to be an international
trusts (on creation or migration to Brunei),
and at least one trustee must be a licensed
under RATLO or an authorised wholly-owned
subsidiary of a licensee. Generally, only
non-residents may be beneficiaries when
an IT is first established. Purpose and
Special trusts are provided for, whether
charitable or non-charitable.
At least one trustee must be licensed under The Registered Agents
and Trustees Licensing Order, 2000 (RATLO)
or an authorised wholly-owned subsidiary
of a licensee. Generally, only non-residents
may be beneficiaries when an IT is first
established. The retention of certain powers
(specified in the ITO) by the settlor will
not invalidate an IT. Such powers are not,
however, deemed to exist in the absence
of specific provision in the Trust instrument.
There are wide powers of investment, with an ability for trustees
to seek "proper advice" as defined. Having
done so, a trustee will not be liable for
acts taken pursuant to such advice.
There are powers to appoint agents and to delegate. Trustees may
charge, and similar provisions appear for
enforcers and protectors. Powers of maintenance
and advancement are wide, spendthrift and
protective trusts are recognized.
Arrangements for appointment or change of trustees follow generally
accepted lines. The Court is given wide
powers to interpret, assist and amend. Hearings
may be held in camera. Trustees may pay
funds into Court for determination of matters
arising in the course of administering the
fund, and there is power to apply to the
Court for an opinion, advice or a direction
relating to trust assets.
Purpose Trusts are provided for, whether charitable or non-charitable.
Without prejudice to the generality, a trust
for the purpose of holding securities or
other assets is by statute deemed a purpose
trust. The purposes must be reasonable,
practicable, not immoral nor contrary to
public policy. The trust instrument must
state that the trust is to be an authorized
purpose trust at creation or on migration
to Brunei. Provision must be made for the
disposal of surplus assets (although no
perpetuity period applies), and an enforcer
is required. On completion or impossibility
of achieving purposes, further trusts may
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Brunei Corporate Forms In The Domestic
Business enterprises in Brunei
may be organised in the form of:
- Sole proprietorship;
- Private Company (Sendirian Berhad);
- Public Company (Berhad);
- Branch of Foreign Company
All business must be registered with the Registrar of Companies and
Business Names. The proposed name of business
or company must first of all be approved
by the Registrar of Companies and Business
Names. For each name proposed, a small fee
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Brunei Sole Proprietorship
Sole proprietors are not subject to tax in Brunei Darussalam, but
are personally liable for the obligations
of their businesses. Generally, registration
approval is not granted to foreigners.
Sole proprietorships must be registered with the Registrar of Business
Names unless the full name of all individuals
concerned is used for the business.
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A partnership may consist of individuals, local companies and branches
of foreign companies. The maximum permitted
number of partners is twenty. In general,
at least one partner in the partnership
must be a Bruneian or a Brunei Permanent
Resident. However, under special circumstances,
the Registrar may grant approval for foreign
individuals to register a partnership.
In Brunei Darussalam, partnerships are not subject to income tax.
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Brunei Private Company(Sendirian Berhad or Sdn. Bhd.)
Companies that are incorporated in Brunei Darussalam are governed
by the Companies Act (Cap 39). Under the
Act, four types of companies may be incorporated:
- Companies limited by shares;
- Companies limited by guarantee;
- Companies limited both by shares and guarantee; and
- Unlimited companies.
A private company must, by its constitution (Articles of Association),
restrict the right of members to transfer
shares, limit its membership to fifty and
prohibit any invitation to the public to
subscribe for shares or debentures.
At least half the directors in a company must be Brunei citizens
or Brunei Permanent Residents.
Private companies must have at least two shareholders. Shareholders
need not be Brunei Darussalam's citizens
or residents, and a subsidiary company may
hold shares in its parent company.
All companies must appoint auditors to audit their accounts and report
to the shareholders. The companies must
also file annual returns with the Registrar
of Companies and submit annual tax returns
to the Collector of Income Tax ( CIT ) at
the Ministry of Finance.
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Brunei Public Company (Berhad or Bhd.)
Public companies are formed under the same legislation as private
A public company is one which may issue freely transferable shares
to the public and is not bound by any of
the above restrictions relating to a private
company. Public companies:
be limited or unlimited;
issue freely transferable shares to
have at least seven shareholders;
- Shareholders need to be Brunei citizens or residents;
- Subsidiary company may hold shares in its parent companies;
Half the directors in a company must be either Brunei Citizens or
ordinary residents in Brunei Darussalam
Memorandum and Articles of Association must be registered with other
incorporation documents in prescribed forms.
Upon approval, a Registration of Companies
Certificate will be issued and a fee of
$25.00 is imposed.
The registration fees are based on a graduated scale on the authorized
share capital of the company. No minimum
share capital is required.
Public Companies are required to do the following:
- Appoint auditors who are registered in Brunei Darussalam;
- Prepare each year profit and loss account and balance sheet, accompanied
by a Director's Report;
- Submit accounting data annually to the Economic Planning Unit,
Ministry of Finance;
annual returns, containing information
on directors and shareholders with the
Registrar of Companies and Business
the following records: Minute Book of
Members' Meeting; Minute Book of Directors'
Meeting; Minute Book of Managers Meeting;
Register of Members; Register of Directors
and Managers; Register of Charges.
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Any foreign company that wishes to establish a business in Brunei
Darussalam and does not incorporate as a
local company must register as a branch
of the foreign company.
The Companies Act also stipulates the requirements for the registration
of a branch of a foreign company in Brunei
Darussalam. The procedure is similar to
that of incorporating a local company but
the documents required to be filed with
the Registrar of Companies differ slightly.
The filing documents required for registering
a branch are as follows:
certificated true copy of the Charter,
Statutes or Memorandum and Articles
of Association or other instruments
defining the constitution of the foreign
company duly authenticated in English;
original copy of the Board Resolution
approving the registration of a Branch
in Brunei; and
list of directors together with their
particulars and the names and addresses
of one or more persons residing in Brunei
Darussalam authorized to accept notices
on the company's behalf.
The branch must have a registered office in Brunei Darussalam and
must appoint a local agent. On registration,
a foreign company is entitled to the same
powers and authority as a local company.
Branches of foreign companies are required to file a copy of their
head office annual financial accounts with
the Registrar of Companies every year. Branches
are also required to prepare branch accounts
for tax computation.
Registration fees payable in respect of the registration of a branch
depend on the authorised share capital of
the holding company but are 50% of the fees
payable for locally incorporated companies.
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