 |
| Brunei's Flag |
·
Smallest
country in ASEAN
·
One
of the major economic and political power in ASEAN
·
Affluent
population
·
Supportive
government
·
Generally
open market
BACKGROUND
 |
| Omar Ali Saifuddin Mosque |
· Well-educated and largely English-speaking population
· Government intent to bringing foreign investment and projects to Brunei
· Second income revenue from overseas investment
· Citizen pay no taxes, receive free education through to the university level, free medical care, and subsidized housing
· Investor attraction
o
Central
regional location
o
Excellent
telecommunications and airline connections
o
No
personal income tax, sales or export taxes
o
Stable
political situation
o
Foreign
businesses exporting goods and services enjoy a renewable ten-year corporate
tax holiday
o
Low
crime rate
o
Good
schools, housing and sport facilities
o
Low
utility costs
· Not been the recipient of economic aid
· Large oil exports keep balance positive for importing of consumer goods and food
· Brunei dollar pegged to the Singapore Dollar at one-to-one ratio, Singapore currency is legal tender
· One of the lowest GDP growth rates in ASEAN
· One of the highest rates of macroeconomic stability in the world and highest in Asia
· Fourth-largest oil producer in Southeast Asia
· Ninth largest exporter of liquefied natural gas in the world
· Non-petroleum industries includes
o
Agriculture
o
Forestry
o
Fishing
o
Aquaculture
o
Banking
· Brunei’s substantial foreign reserves
o
Managed
by the Brunei Investment Agency (BIA)
o
An
arm of the Ministry of Finance
o
Guiding
principle is to increase the real value of Brunei’s foreign reserves while
pursuing a diverse investment strategy
o
New
enterprises can receive pioneer status, exempting profits from the income tax
for up to 5 years if meet certain criteria
o
No
personal income tax or capital gains tax
o
30%
normal corporate income tax rate
o
Foreign
direct investment (FDI) outside the oil and gas industry remains limited
o
Helps
when tendering for contracts with the government or Brunei Shell Petroleum
o
Incorporated
locally
o
Registered
as a branch of a foreign company
o
Must
be registered with the Registrar of Companies
o
Public
companies must have a minimum of seven shareholders
o
Private
companies must have a between two to 50 shareholders
o
Half
of the directors in the company must be residents of Brunei
· Philippines and China involved with the largest join projects with the Government of Brunei to increase agriculture and fisheries production
· Aims to develop Brunei into
o
International
offshore financial centre
o
Centre
for Islamic banking
MAIN CHALLENGES
· Foreign investors need to find a local partner to enter the market
· SMEs and investors should expect delays when dealing with the local government
MAJOR OPPORTUNITIES
o
Promotes
Brunei as an investment destination
o
Responsible
for shaping government policies for foreign investment, marketing, incentives
and promotion
o
Key
initiatives
§
Sungai
Liang Industrial Park (SPARK)
§
Pulau
Muara Besar deepwater port and industrial zone (PMB)
§
iCenter
(ICT)
o
Identified
industries as potential investments
§
Aviation
§
Green
energy
§
Halal
food / pharmaceutical processing
o
Launch
National Housing supply and infrastructure projects
o
Announced
significant incentives and loans to encourage other investment and projects
from abroad
o
Developed
several industrial parks
o
Facilitate
and nurture small and medium sized enterprises
DOING BUSINESS IN BRUNEI
o
Regular
visits
o
Establishing
resident representation
USING AN AGENT OR DISTRIBUTOR
ESTABLISHING AN OFFICE
o
Sole
proprietorships
o
Partnerships
o
Branches
of a foreign company
§
Registered
as a branch of a foreign company
§
Incorporate
as a Brunei limited company
·
At
least two the directors in the company must be citizens or permanent residents
of Brunei
o
Agent
o
Distributor
o
Partner
JOINT VENTURES /
LICENSING
o
Owners
have limited liability
o
Partners
have unlimited liability
o
Liability
is limited to that of the participating corporations
· Except products marketed door to door by local sales person
· Does not need Brunei citizen representative to do business
o
Commercially
o
Selling
directly to the government
SELLING TO THE GOVERNMENT
o
Only
authorized agent of the Royal Brunei Armed Forces and national security to
procure military equipment and ammunition
o
Wholly
owned company of His Majesty’s Government
· Government tender require participation of local companies
· Foreign companies are encourage to collaborate with local companies
DISTRIBUTION AND SALES CHANNELS
o
Contracts
Act
o
Unfair
Contract Terms Act
o
Sales
of Goods Act
ELECTRONIC COMMERCE
· Enhancing telecommunications infrastructure
· Enhance human and institutional capacity building
· Usage of ICT will be widened to
o
Create
an electronic system for the government
o
Transform
a paper-based procedural system into an electronic system
o
Enable
provision of services and governance processing using an online system for the
creation of civil services that are more efficient, effective and responsive
OPENNESS TO FOREGIN INVESTMENT
· The Investment Incentives Order 2011 provides
o
guidelines
for granting pioneer status
o
tax
relief
o
extending
tax relief period
· Foreign firms need a local partner to purchase land or apply for a long term lease
· Strata Title Act allows non-citizens
o
Own
property in accordance with the terms of a 99 year lease
o
Applies
to properties more than two stories high and townhouse
RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT
o
Registrar
of Companies
o
Attorney
General’s Chambers
o
locally
incorporated limited companies
o
foreign
company branches
o
representative
offices
BUSINESS CUSTOMS
· Handshakes are common among male businessmen
· Muslim women prefer not to shake hands with men
· Do not offend a dinner host by offer paying for the dinner
· Shoes should be removed before entering private home
· Avoid passing in front of a seated person
· Avoid pointing with the index finger (point with thumbs with hands clenched)
· Yellow is royal-designated colour and should not be worn in the presence of royalty
· Tipping is not customary in Brunei
· Large hotels and restaurants add 10% service charge to the bill
· Alcohol is not available for purchase
· Muslims generally will not offer or accept alcoholic beverages
LOCAL TIME, BUSINESS HOURS, AND HOLIDAYS
o
Government
offices : 7.45am to 12.00pm, 1.30pm to 4.30pm, Monday to Thursday and Saturday,
closed on Friday and Sunday
o
Shopping
centres : 10am to 10pm, everyday
o
Private
offices : 8am to 5pm on weekdays, 8am to 12pm on Saturday
o
Banks
: 9am to 3pm on weekdays, 9am to 11am on Saturday
 |
| Bandar Seri Begawan |
Population
|
401890
|
Capital
|
Bandar Seri Begawan
|
Area
|
5765 sq km
|
Ethnic
Groups
|
Malay 66.3%
Chinese 11.2%
Indigenous 3.4%,
Other 19.1%
|
Religions
|
Muslim (official) 67%
Buddhist 13%
Christian 10%
Other (includes
indigenous beliefs) 10%
|
Major
Language
|
Malay (official),
English (widely spoken), Chinese
|
Monetary
Unit
|
Brunei Dollar (1BND =
1SGD)
|
Major
Industries
|
Petroleum, petroleum
refining, liquefied natural gas, construction, some agriculture
|
Major
Export
|
Crude oil, natural
gas, garments
|
Major
Imports
|
Machinery and
transport equipment, manufactured goods, food, chemicals
|
GDP
|
US$ 20.38 billion
|
GDP
per capita
|
US$ 51600
|
Source: SME Magazine, October 2011, Malaysia
Edition, Market Focus
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