Brunei Darussalam through Brunei Vision 2035 has set out strategic routes for its economic goals with a focus on attracting more foreign direct investments (FDIs) as a key driver for sustainability and growth.
The country focusses mainly on economic activities that will attract new industries, knowledge, technologies, markets and businesses, as well as upskill the local workforce and create job opportunities.
Through an open economy policy favourable to foreign trade and FDIs, the government continues its economic diversification efforts to limit its long reliance on oil and gas exports. This is part of the government’s reform agenda to ensure a pro-business and conducive investment climate.
While foreign companies are allowed to have 100 per cent ownership, co-investment partnerships are also available with various incentives.
One such incentive is the Strategic Development Capital Fund (SDCF), a government trust fund under the Ministry of Finance and Economy (MoFE) that provides equity financing for local development projects.
Through this fund where Brunei is willing to share capital risk, the country has already attracted a number of significant FDIs over the last few years.
One great example is Hengyi Industries Sdn Bhd, with an investment of USD3.4 billion to establish a world-class petrochemical plant. The project is a joint venture between China’s Zhejiang Hengyi Group and Damai Holdings, a wholly-owned subsidiary under the Brunei government’s SDCF.
Damai Holdings owns a 30-per-cent stake in the project, while the rest is owned by the Zhejiang Hengyi Group.
Aside from the Hengyi Industries, the Brunei government also has holdings in Amann Shipping, CAE, SBI Islamic Fund, Western Foods and Packaging, Simpor Pharma and Brunei Fertilizer Industries through the SDCF.
With the main objective to support foreign companies investing in Brunei so that they become the national engine towards Brunei’s diversification efforts, the fund provides risk capital and broadens the revenue base of the government.
This initiative has 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 achieves Brunei Vision 2035.
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