Brunei proactively seeks foreign direct investments (FDIs) that will contribute to economic diversification and development by
increasing export-oriented industries, while providing spin-off business opportunities for local businesses and jobs for locals.
According to statistics published by the Department of Economic Planning and Statistics (DEPS), FDI inflows for Brunei amounted to BND266.7 million in Q2 2021. This includes equity amounting to BND131.3 million and debt instruments amounting to BND135.5 million.
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 have seen the country accelerate its pace of bringing in more FDIs.
One such incentive is the Strategic Development Capital Fund, a government trust fund under the Ministry of Finance and Economy (MoFE) that provides equity financing for local development projects. Through the fund where Brunei shares the capital risk, the country has already attracted a number of significant interests from foreign investors.
With the establishment of the Foreign Direct Investment and Downstream Industry (FDIDI) Steering Committee, the FDI Action and Support Centre (FAST) was formed in November 2015 to provide complete facilitation for investors to obtain their project requirements.
FAST provides investors with all requirements for the project to be implemented, including utilities and infrastructure. In addition, FAST ensures that investors obtain all government permits and approvals, including development and construction approvals.
While foreign companies may have 100 per cent ownership, they can also opt for co-investment partnership through the Strategic Development Capital Fund. This gives investors a peace of mind and assures that their investments are secure.
One example is the Hengyi Industries at Pulau Muara Besar, a USD3.4-billion joint venture between China’s Zhejiang Hengyi Group and Damai Holdings. It is a wholly owned subsidiary under Brunei Government’s Strategic Development Capital Fund-owning 70-per- cent and 30-per-cent stakes respectively.
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.
The fund provides risk capital and broadens the revenue base of the government while supporting foreign companies and facilitating the country’s diversification efforts. This initiative has resulted in signs of increased confidence in Brunei as a destination for investments, manifested in the recent healthy influx of FDIs in different sectors.
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