BBYB 2019

Borneo Bulletin Yearbook 2019

Other efforts to attract more foreign investment

include the establishment of the BEDB, the

FDI Action and Support Centre (FAST) and

the Darussalam Enterprise (DARe). These

organisations also work together to smoothen

the process of obtaining permits, approvals

and licenses. Facilitating services are now

consolidated into one government website.

In an effort to encourage business activities,

the Revenue Division of the Ministry of Finance

(MoF) was appointed to handle the country’s

tax administration. It continuously reviews

and strengthens the income tax legislations to

increase tax compliance and collection.

The division is also responsible for conducting

and negotiating Avoidance of Double Taxation

Agreement (DTA), Bilateral Investment Treaty

(BIT) and Tax Information Exchange Agreement

(TIEA).

Several units were also established in assisting

taxation processes in the country. Under

the Revenue Division, the System for Tax

Administration and Revenue Services (STARS)

is set up as an online tax system to facilitate

companies in handling matters related to taxes

such as filing of income tax returns and payment

of corporate income tax online.

The Income Tax Board of Review (ITBOR) was

established in February 2017 by the MoF to

oversee processes of hearing, examining and

settlement of objection cases as brought about

by companies. ITBOR illustrates the ministry’s

efforts in pushing for a transparent and fair

corporate tax system.

There are no sales, payroll, capital gains,

manufacturing and personal income tax.

Corporate income tax in Brunei is at 18.5 per

cent – which is one of the lowest in the region.

However, companies involved in the exploration

and production of oil and gas receive a tax rate

of 55 per cent. Newly incorporated companies

receive an exemption for the first BND100,000

chargeable income.

Additionally, a tax threshold is granted to both

newly incorporated and existing companies

to reduce the tax liabilities of Small and

medium-sized enterprises (SMEs). Other

notable incentives include tax relief for capital

expenditure in excess of BND1 million and the

withholding of tax exemptions for interest on

certain loans from non-residents.

The country does not levy any indirect taxes such

as value added tax (VAT) or other consumption

based taxes. It also has no export duty. Property

tax is only imposed on properties for commercial

use with rates determined by the local municipal

board.

More foreign companies are choosing

the country as their preferred investment

destination to take advantage of the congenial

business atmosphere.

With smooth processes and efficiency in mind,

Brunei throughout the years has successfully

enhanced the business environment and the

government’s pro-business policy has led to

significant improvement in the country’s position

in the 2019 World Bank’s Ease of Doing Business

ranking from 72 in 2017 to 55 in 2019.

BEDB, FAST and other relevant government

agencies work closely to provide assistance

to investors from submission of proposals up

to implementation and operation of projects

with the FDI processes streamlined for quicker

approval.

Companies incorporated in Brunei are permitted

to have 100 per cent foreign ownership. Credible

co-investment partnerships are available with

partners including MoF’s Strategic Development

Capital (SDC) Fund and Government Linked

Companies (GLCs).

Brunei laws foster a pro-business and pro-

investor environment featuring a robust and

comprehensive Intellectual Property (IP)

Protection and accessibility to international

filing routes. The country also has one of

the lowest tariffs for basic utilities in the

region, keeping business operating costs to a

minimum and readily available infrastructure

of over 30 designated industrial sites with

good connectivity to roads, water, electricity,

broadband Internet and more.

The government of His Majesty Sultan Haji

Hassanal Bolkiah Mu’izzaddin Waddaulah ibni

Al-Marhum Sultan Haji Omar ‘Ali Saifuddien

Sa’adul Khairi Waddien, Sultan and Yang Di-

Pertuan of Brunei Darussalam, through the Ease

of Doing Business Steering Committee, has

been actively driving business reforms.

These reforms streamline inefficient government

processes, ensure the costs of doing business

are competitive and assure that regulations are

aligned with international best practices.

The initiatives have resulted in signs of

increased confidence in Brunei as a destination

for investments – manifested in the recent

healthy influx of FDIs from different sectors.

Improving the business environment and

ultimately Brunei’s global competitiveness is

a key priority of His Majesty’s government to

ensure the country sustains the right trajectory

to achieve Brunei Vision 2035.