I. Investment Climate
Brunei is a small, energy-rich Sultanate on the northern coast of Borneo in Southeast Asia. Brunei boasts a well-educated, largely English-speaking population, excellent infrastructure, and a government intent on attracting foreign investment and projects. In parallel with Brunei’s efforts to attract foreign investment and create an open and transparent investment regime, the country has taken steps to streamline the process for entrepreneurs and investors to establish businesses and has improved its protections for intellectual property rights (IPR).
Brunei has less than half a million people but ranks as having one of the highest rates of macroeconomic stability in the world. According to the statistics, in 2019, Brunei Darussalam's real gross domestic product grew by around 3.87 percent compared to the previous year.
II. Why Invest in Brunei Darussalam?
Brunei Darussalam’s location, virtually in the middle of the ASEAN region, renders it a fantastic base from which to do business in. The country enjoys convenient access to the Southeast Asian markets, with neighbours such as Vietnam, Thailand, Singapore, Malaysia, Philippines and Indonesia located just a couple of hours’ flight radius away.
Its deepwater port, Muara Port, has 13 shipping lines and is connected to 15 ports in the region – ports in Singapore, Hong Kong, Malaysia, Thailand, Philippines and China. Up to 34 sailings are made every month.
With an adult literacy rate of 94%, Brunei has one of the most highly educated populations in the world that is seen as an increasingly valuable resource.
Attractive investment incentives
Brunei has one of the most liberal tax regimes in the region with its corporate income tax being one of the lowest. There are also no taxes on personal income, sales, payroll, export, capital gains or manufacturing.
Only companies are subject to tax under the Income tax Act 1949.
Corporate income tax rate has been gradually reduced from 30% (2008) to the current rate of 18.5%.
Tax Exemptions at a Glance
No Personal Income Tax
No Sales Tax
No Payroll Tax
No Export Tax
No Manufacturing Tax
No Capital Gains Tax
Tax Incentives at a Glance
Pioneer Status Companies
Exempt from Corporate Income Tax
Exempt from import duties on machinery
Exempt from import duties on raw materials
Tax exemption for up to 11 years
Expansion of Established Enterprise
Exempt from Corporate Income Tax
Minimum capital expenditure of US$650,000.00
Tax exemption up to 20 years
Foreign Loans for Productive Equipment
Exemption from withholding tax for interest paid
Minimum amount US$130,000.00
Readily available industrial sites
Brunei offers investors readily available industrial sites with supporting infrastructure in order to facilitate the establishment of new industrial investments in Brunei. The industrial sites are as follow:
The Government of Brunei Darussalam, in its quest to diversify the country’s economy, has identified five key investment priority clusters which is halal, innovative technology & creative industry, business services, tourism and downstream oil & gas industry. These sectors capitalize on Brunei Darussalam’s strength as a strong Islamic nation with its abundant natural resources and highly-educated skilled people.
The 135km-long Muara-Tutong-Kuala Belait highway links the capital Bandar Seri Begawan, Seria (known as city of petroleum), and Kuala Belait. The main residence spots are connected by modern highway network. There are road connections between Brunei and Malaysia’s Sarawak and Sabah, but still no cross-border highway.
The roads are unblocked unless at the peak period. The highway network covers the capital. Therefore, people can drive to highway within 2-3 minutes from everywhere in urban areas.
Brunei has one of the highest levels of private vehicle ownership.
Accomplished in 1974, Brunei International Airport serves 15 destinations including ASEAN countries, Australia, the Middle East, the Europe and China. In addition, the airport operates code-sharing flights with the airlines of other countries.
Waterway transport plays an important role in Brunei’s transportation. The main registered ships are fishing boats, passenger ships and public service ships. Major destinations include ports of Singapore, Hong Kong, Kuala Lumpur and Manila.
The seaport of Brunei: Port of Muara, Port of Kuala Belait, Port of Seria, Port of Lumut and a commercial port in Bandar Seri Begawan.
Port of Muara is equipped with handling equipment, container base, refrigerating equipment and cement-sealed warehouse. There are one passenger wharf and one automotive terminal at Port of Muara. Brunei plans to expand Port of Muara. Meanwhile, Brunei has initiated to make it private, welcoming foreign investors to invest in Port of Muara.
Port of Seria and Port of Lumut are mainly for petroleum and natural gas exportation.
Brunei has basically finished the transformation of nationwide fixed telephone network. Brunei used the “Next Generation Network (NGN)” service provided by Huawei, which enables Brunei to telephone over 160 countries directly and switch data. Developed by Huawei and DST, largest mobile communication provider in Brunei, the 4G network has been formally put into use.
Brunei has one of the highest rates of Internet penetration in Southeast Asia. Currently, the Fiber to The Home project is undergoing construction, which can increase the speed of fixed-line broadband to 45Mbps. It takes a long time to visit a website via 3G network in Brunei. However, the recent 4G network has up to 20Mbps speed.
The government of Brunei endeavored to boost the popularity of e-government and IT in the fields of education and training. Brunei carried out e-government in 2001. From 2010 to 2014, Brunei’s total key project investment has exceeded 500 million BND, including building secure government network, world-leading data center, standardized sharing service and various systems of government and enterprises. Meanwhile, the Digital Government Strategy 2015-2020 was introduced to strength the collaboration of different sectors. This strategy is oriented by people and enterprises’ demands and provide innovative and efficient services. In addition, it establishes a bilateral communication platform for people and government, which enables citizens to participate in the decision making of national policies and other public matters. Brunei expects to achieve WAWASAN 2035 via developing communication technology and the supporting industries.
The rate of electricity penetration reached 99.9% by the end of 2017. Brunei’s power supply is plentiful, which is enough to meet basic demand of industrial and agricultural production. At present, Brunei mainly uses oil gas for power generation. Brunei plans to use renewable energy sources to generate power, which is expected to account for 10% of total energy consumption by the end of 2035.
Reference: 1. Chinese Ministry of Commerce Department of Outward Investment and Economic Cooperation
2. U.S. Department of State
3. Invest in ASEAN
4. Government of Brunei Darussalam
5. investBN of Government of Brunei Darussalam
6. EMBASSY OF BRUNEI DARUSSALAM IN TOKYO