Through its Brunei Vision 2035, Brunei Darussalam has set out strategic routes to attract more foreign direct investments (FDIs), which will lead to a sustainable economic growth. The country’s economic goals mainly focus on economic activities that will attract new industries, knowledge, technologies, markets and businesses. At the same time, the country aims to hone the skills of Bruneians 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.
Thanks to a slew of investment incentives, political stability and peaceful environment in the country, the last few years saw the country accelerating its pace on bringing in more FDIs. Some of these incentives include programmes such as the Strategic Development Capital Fund, a government trust fund under the Ministry of Finance and Economy (MoFE).
The trust fund provides equity financing for local development projects and has attracted a number of significant FDIs from foreign investors, such as the Hengyi Industries.
While foreign companies are allowed to have 100 per cent ownership, the Strategic Development Capital Fund also allows co-investment partnerships. This gives foreign investors a peace of mind, assured that their investments are perfectly secured. A good example is Hengyi Industries.
Located at Pulau Muara Besar, Hengyi Industries is a USD3.4 billion joint venture between China’s Zhejiang Hengyi Group and Damai Holdings, a wholly owned subsidiary under Brunei government’s Strategic Development Capital Fund. In this joint venture, the Hengyi Group holds 70 per cent of the stakes, while Damai Holdings holds 30 per cent.
Through the Strategic Development Capital Fund, the Brunei government also has holdings in Amann Shipping, CAE, SBI Islamic Fund, Simpor Pharma, Brunei Fertilizer Industries and Western Foods and Packaging.
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, ensuring the country sustains the right trajectory to achieve Brunei Vision 2035.
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