Following concerns that Brunei was faltering in its efforts to effectively compete on the world business stage after dropping sharply in the Ease of Doing Business index rankings from 98th place in 2014 to 105 in 2015, last year’s assessment by the World Bank sparked renewed confidence in the country’s ability to stand strong among its international counterparts.
Brunei’s ranking jumped to 84 for 2016, thanks to key reforms implemented in 2015, according to the World Bank’s Ease of Doing Business Report 2016.
The World Bank, in its latest report which centred on ‘Measuring Regulatory Quality and Efficiency’ and assessed business regulatory environments in 189 economies, attributed the country’s higher ranking to two areas: namely, starting a business and paying taxes.
In the beginning of 2015, the Ministry of Finance – which handles business name registrations – took to the World Wide Web as the government decided to go paperless in its attempts to boost private sector growth with the introduction of online business registration names under the Registrar of Companies and Business Names (ROCBN). This initiative made it possible for a business name to be registered within the same day, compared to the four to 10-day wait prior to 2015, with results so far positive.
Brunei’s ranking jumped to 84 for 2016, thanks to key reforms implemented in 2015, according to the World Bank’s Ease of Doing Business Report 2016
The system that was based on a model utilised by New Zealand – ranked second in the Ease of Doing Business Report 2015 – took into consideration feedbacks from the private sector, and required minimum input from users while preserving the integrity of the country’s business climate in line with Brunei’s laws. As a means of curbing fraudulent activities that often arise in cloaked environments such as cyberspace, an individual is required to provide a signature to related terms and conditions set by the Bruneian government when registering a business name.
Not only does this simplify the process of incorporating a company, it also enables users to pay related fees through a secure network fuss-free, eliminating the need to be physically present at the receiving department to conduct financial transactions.
As part of the process towards encouraging change, the government has also introduced legal reforms to ease tax payments, according to the report. For example, companies are now able to pay taxes more easily and cheaply with the merging of contributions for the Employee Provident Fund and the Supplemental Pension Fund.
These initiatives to facilitate doing business in the country are among a number of other measures including the replacing of the need for a Miscellaneous Licence to operate a business with what is now known as the Business Licence Certification under the Ministry of Home Affairs. This is aimed at offsetting unnecessary delays which used to result in almost a year in paperwork – hampering private sector growth and discouraging foreign direct investors.
Under the new Business Licence Act, authorities are now able to issue licences within one working day. Through changes made in the country’s legislation for business development, several redundant steps towards starting a business have been eliminated and the online system introduced by the ROCBN is designed to complement this.
As for the future, Brunei is looking to break into the top 20 in the Ease of Doing Business 2017 Report and has spent the better part of 2015 trying to meet the requirements set by unbiased, international assessors from the World Bank.
To satisfy these requirements, the government will introduce reforms that have been broken down into two areas, with the first aiming to further eliminating legal redundancies such as certain processes related to the setting up of a business. The second area focuses on the legal rights of borrowers, lenders and contracting parties, while strengthening the judiciary processes during disputes.
Other reforms will include changes in collateral law, expanding the scope of tax incentives and protecting minority investors.
The World Bank, meanwhile, reminded that the promotion of business growth must also take into account the needs of the private sector, stating that feedback from these industries will be one of the key determining factors that could make or break Brunei’s ambitions of breaking into the top 20 economies in the world for the ease of doing business by 2017.
One of the anticipated challenges is encouraging the public to take part and comply with these changes, thus it is imperative that these legislations are adapted to the needs of the country.
Brunei though, is not the only country introducing changes ahead of the game, especially in a competitive region home to rapidly developing economies that are also vying for global recognition.
Copyright 2015 Borneo Bulletin Yearbook 2015 All rights reserved.