Brunei


ESSENTIAL FACTS

LOCATION: 4 30 N, 114 40 E
Brunei is bordered by the South China Sea and Malaysia.

POPULATION: 374,577

CURRENCY: Bruneian dollar (BND)

LANGUAGE: Malay (official), English, Chinese

CLIMATE: Brunei has a tropical climate - hot, humid and often raining.

EDUCATION: 92.7 percent of Bruneians age 15 and over can read and write.

PUBLIC HOLIDAYS: National Day, 23 February (1984)

HISTORY AND GOVERNMENT

HISTORY
The Sultanate of Brunei - headed by the same family dynasty for practically a millennium - had gained control of northwest Borneo and the southern Philippines in the 1400s and again in the 1600s, then became a British protectorate in 1888. As of 1984 it is independent of English rule.

POLITICAL SYSTEM
Brunei is a constitutional sultanate. The head of state is called “Sultan and Prime Minister.” The Council of Cabinet Ministers handle government matters; the Religious Council, religious matters; the Privy Council, constitutional; and the Council of Succession decides who is next on the throne once the current leader passes away or becomes unable to keep his duties.

JUDICIAL SYSTEM
Brunei’s legal system is based on English common law, and features a Supreme Court and the Judicial Committee of the Privy Council. Bruneian Muslims follow the Islamic Shari'a law, handled through Shari’a courts.

COMMERCE AND TRADE

COMMERCIAL ACTIVITY
Agriculture: Rice, vegetables, fruits; chickens, water buffalo, cattle, goats, eggs
Industry: Petroleum, petroleum refining, liquefied natural gas, construction

TRADE PRACTICES
Exports: Crude oil, natural gas, refined products, clothing to Japan, Indonesia, South Korea, Australia, US
Imports: Machinery and transport equipment, manufactured goods, food, chemicals from Singapore, Malaysia, UK, Japan, China, Thailand

BANKING, FINANCE AND INVESTMENT

FINANCIAL FACTS
Brunei enjoys one of the highest per capita GDP in Asia. Revenues from overseas investment and local industry sustain the economy. The government provides medical services free of charge, provides free education through the university level, subsidizes rice and subsidizes housing.

Fiscal year: 1 April - 31 March

BANKING LAW
Foreigners who choose to bank in Brunei are subject to the rules laid out in the International Banking Order (IBO) of 2000. The IBO includes laws and regulations for all financial activities, management and other tasks encompassed by modern international banking business - from making deposits to Internet-only banking.

MEMBERSHIPS
ADB, APEC, APT, ARF, ASEAN, C, EAS, G-77, IBRD, ICAO, ICRM, IDB, IFRCS, ILO, IMF, IMO, IMSO, Interpol, IOC, ISO (correspondent), ITSO, ITU, NAM, OIC, OPCW, UN, UNCTAD, UNESCO, UNWTO, UPU, WCO, WHO, WIPO, WMO, WTO

FOREIGN INVESTMENT
Foreign investment is crucial to the country’s economic stability, and therefore greatly encouraged - to the point that 20 years ago, the government formed a cabinet position to handle the issue, called the Ministry of Industry and Primary Resources. And for well over 30 years, Brunei has taken the region’s lead in promoting foreign investment with incentives, tax advantages and state assistance in every step in the life of the foreign business that has chosen Brunei.

REAL ESTATE
Brunei’s top priority in all real estate transactions - from residential to industrial - is that land use in the country does not pose a threat to the environment. Therefore, any industry that according to the state has a bad ecological record is prohibited from using Brunei land.

That being said, Brunei gives support in a variety of ways - from finance to resources - to those who wish to purchase, lease or rent land, facilities or other property.

IMMIGRATION

VISAS
Visa-free visits of no more than 30 days are offered to the citizens of Austria, Germany, Malaysia, Netherlands, New Zealand, Oman, Singapore, South Korea, the UAE and the UK. Australians do not need to obtain a visa before leaving for Brunei, but will be issued one once they arrive that lasts for 30 days.

Citizens of Belgium, Canada, Czech Republic, Denmark, France, Hungary, Indonesia, Italy, Japan, Laos, Luxembourg, Maldives, Norway, Peru, Poland, Philippines, Slovakia, Spain, Sweden, Switzerland, Thailand and Liechtenstein can stay in Brunei for 14 days without a visa. Those from Qatar will be issued a visa as soon as they arrive in Brunei for 14 days.

Visas for citizens of all other countries must be obtained in the visitor’s home country, at the Brunei embassy or consulate nearest them.

EMPLOYMENT
Foreigners may not work in Brunei without having obtained an employment visa from their employer before arriving in Brunei (immediate family of the employee receive “dependent” visas). Embassies and consulates will issue employment visas on behalf of the Department of Immigration and National Registration.

BUSINESS

BUSINESS ENTITIES
There are two types of business entities available to the foreign investor, trader or entrepreneur: An International Limited Partnership (ILP) or an International Business Company (IBC).

As long as one of the partners in International Limited Partnership is a trust company, the number of partners on can have is unlimited. ILPs cannot do business with any Brunei residents, but they can do business within Brunei borders as well as anywhere else in the world.

Under an International Business Company, corporations can enjoy tax-exempt operations offices and an extremely flexible organizational framework. If a company already in existence elsewhere chooses to open a branch of subsidiary in Brunei, this can be done easily as a Foreign International Company (FIC).

TRUSTS
Trusts in Brunei are offered to corporate, private and individual entities for use as a financial tool in practically any application. The requirements are as follows: The settlor may not be a Brunei national; the trust must be registered under the International Trust Order regulations; an independent third party must be named to administer the trust (which also facilitates additional tax advantages); there may be a single beneficiary, but cannot be from Brunei; a minimum of one trustee must have a RATLO license.

TAXATION
In Brunei there is no personal income tax, and there are no export, sales, payroll or manufacturing taxes. Sole-proprietorship and partnership businesses are not subject to income tax.

CORPORATE TAXATION
Any company whose management resides in Brunei (i.e., annual meeting location is Brunei) is a resident of Brunei and therefore subject to taxation.

Companies pay 30 percent tax on gains, dividends, interest, royalties and property income; there is no capital gains tax.

OTHER TAXATION/DUTIES
The majority of official documents and those submitted to Brunei government entities are subject to stamp duties. Depending on the type of transaction the documents are representing, the duty amounts vary from a set fee to a certain percentage of the monetary amounts submitted on the document.

An important note for individual and family investors - Brunei does levy an estate duty on the property of those who have passed.

DOUBLE TAXATION
Estate duty paid in Brunei is exempt from double taxation.