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Brunei: Offshore Business Sectors

Banking

The International Banking Order 2000 ("IBO") governs the provision of international banking services to non-residents. While encompassing the traditional definition of banking by reference to taking of deposits, the IBO recognises that this is not the daily concern of a sophisticated International Bank.

Four classes of licence are provided for:

  • a full international licence for the purpose of carrying on international banking business generally;
  • an international investment banking licence for the purpose of carrying on international investment banking business;
  • an international Islamic banking licence for the purpose of carrying on international Islamic banking business, granted in respect of full, investment or restricted activities.
  • a restricted international banking licence for the purpose of carrying on international banking business subject to the restriction that the licensee may not offer, conduct or provide such business except to or for persons named or described in an undertaking embodied in the application for the licence.

Among the banks that have been granted international banking licenses in Brunei are HSBC and Sun Hung Kai International Bank [Brunei] Limited, a new subsidiary of Sun Hung Kai Securities Limited (SHKSL) in Hong Kong.

"International banking business" includes the taking of deposits from the (non-resident) public, the granting of credits, the issue of credit cards and money collections and transmissions. But the definition is expanded to embrace foreign exchange transactions, the issue of guarantees, trade finance, development finance and sectoral credits, consumer credit, investment banking, Islamic banking business, broking and risk management services whether conducted by conventional practices or using Internet or other electronic technology and includes electronic banking .

"International investment banking business" includes:

  • providing consultancy and advisory services relating to corporate and investment matters, industrial strategy and related questions, and advice and services relating to mergers and restructuring and acquisitions, or making and managing investments on behalf of any person;
  • providing credit facilities including guarantees and commitments;
  • participation in stock, or share issues and the provision of services relating thereto: or
  • the arrangement and underwriting of debt and equity issues.

"International Islamic banking business" is banking business whose aims and operations do not involve any element which is not approved by the Islamic Religion. Provision for Syariah Law to over-ride a conflicting provision in the IBO is made, subject to good banking practice, and there is a requirement for the appointment of a Syariah Council. The restriction to local ownership which applies under the domestic Islamic Banking Act does not apply to the international regime.

See Law of Offshore for further details of the regulatory regime, and Offshore Law and Tax Regimes for details of fees payable.

International banks will pay no tax, and neither will their staff, customers or products.

 

 

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