Brunei has received dozens of accolades regionally and internationally for its macroeconomic stability, political stability, high standard of living, low crime rate, good connectivity, absence of natural disasters and strategic location in the Asean region.
The Sultanate has one of the most competitive tax rates in this region with a corporate income tax rate of 18.5 per cent. This is the second lowest rate in the Asean Region. There is no tax on personal income, sales, capital gains and manufacturing. It is also one of the few countries with strong guidelines on Halal food, pharmaceuticals and cosmetics.
Companies established in Brunei are permitted to have 100 per cent foreign ownership. Nonetheless credible co-investment partnership is available such as through the Ministry of Finance’s Strategic Development Capital Fund as well as Government Linked Companies (GLCs) under the Ministry of Finance.
With a literacy rate of 97.9 per cent, Brunei has a highly educated population, which is seen as an increasingly valuable resource globally. The country has put a strong commitment to research and development with the availability of training grants and research and development grants.
The government has also created several dedicated industrial parks with competitively priced utilities. Brunei understands that innovation plays a large part in ensuring organic growth within the country. Thus, to protect and encourage innovation, the country has made considerable efforts to enhance its Intellectual Property Rights infrastructure.
Over the past months, the Sultanate also has streamlined the procedures for approving foreign direct investments (FDIs) – especially government approvals, with the establishment of Darussalam Enterprise (DARe), which has reformed the way businesses are run in Brunei, by taking initiatives to ensure business is conducive and viable for start- ups and international investors.
The government has also cut down a lot of red tape and bureaucracy, along with establishing an online platform for business registrations for efficiency purposes.
Other initiatives undertaken by the government to make Brunei ‘pro-business’ include the establishment of the Business Support Centre to help businesses in information finding and centralise approvals, such as for getting work permits for businesses, and other significant reforms in order to boost the country’s economic production and growth.
These include online registration which enables new businesses to be set up in less than a day. Online application through the OneBiz system allows permits for construction to be obtained within 40 days, while the implementation of the new Building Control Order allows for significant renovation work to be carried out without prior approval.
Then there is the e-Amanah system, which allows employers to make online contributions to the Employees Trust Fund (TAP), and the new 30-day tax refund policy.
Exemption from corporate taxes and customs duties for pioneer status companies and exemption from taxes for local enterprises with revenue of less than B$1 million, are also some of the other significant reforms made by the government.
The government has also introduced the Land Application and Registration Information System (LARIS), which will allow the public to conduct land transactions and file applications online. The new system allows landowners and potential landowners to file applications related to ownership transfers, change of land title and private land leases.
Brunei has also improved on its ranking in the last World Bank’s Ease of Doing Business (EoDB), where it is currently ranked at 84, compared to 105 in the previous year. The country is aiming to achieve a ranking in the top 50 in the next EoDB assessment.
A slew of major oil and gas projects are already in the pipeline, including Hengyi Industries’ multi- billion dollar refinery and petrochemical plant project at Pulau Muara Besar, which will provide investment opportunities for foreign companies and spin-offs for local entrepreneurs.
Hybrid paddy farming, downstream oil and gas industries and fisheries are some of the other potential areas in Brunei where foreign investors can tap into.
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