flag Brunei Darussalam Brunei Darussalam: Investing

FDI in Figures

The reduced size of the domestic market discourages FDI in Brunei, despite the advantages offered by the Sultanate: tax incentives and customs duty exemptions on certain sectors, especially for non-oil investments; freedom of investment in all sectors, with the exception of certain fields in which local participation is required. According to UNCTAD’s World Investment Report 2021, Brunei's FDI inflows stand at USD 586.21 million in 2020, up from USD 275 million in 2019 (Department of Economic Planning and Development, Brunei, 2021), despite the global economic crisis triggered by the Covid-19 pandemic. The stock of FDI is on the rise, reaching USD 7.6 billion in 2020. The mining and quarrying sector receives the largest share of FDI. The largest foreign investment accomplished to this day is a methanol distillery, partially financed by the Japanese Mitsubishi Gas Chemical Company, while China is also present in the hydrocarbon sector. Malaysia was the immediate source of investments, with USD 496 million. The Government has been making an effort to diversify the economy and turn Brunei into a banking centre as well as an international offshore financial centre.

Brunei Darussalam performs better in innovation inputs than innovation outputs in 2021. That year, the country ranks 51st in innovation inputs, lower than both 2020 and 2019 (WIPO, 2022). Though Brunei Darussalam net FDI inflows in percentage of GDP fluctuated substantially in recent years, it tended to increase through the 1971 - 2020 period ending at 4.7 % in 2020 (Knoema, 2022). The latest FDI flows and stocks data in Brunei are available on the website of the country's Department of Economic Planning and statistics

Being an oil-producing country, Brunei's economy, of a relatively small size, is vulnerable to international oil price fluctuations, adding that in recent years, the country, with its efforts to attract foreign investment, has seen a number of foreign companies, particularly Chinese enterprises, come over for business, contributing to its economic diversification. To boost its economic diversification, Brunei is making further efforts to attract foreign investments, including from China. In the last years, FDI inflows have been growing considerably. However, a study of the APEC Business Advisory Council (ABAC) stressed the weaknesses of the country's business climate in several domains (citing the absence of a Special Economic Zone, bureaucratic problems for investors, etc.). In order to increase transparency and strengthen corporate governance, the Company Act was amended to simplify the business climate. The corporate tax rate also decreased and is now among the lowest in the ASEAN countries (18.5%). According to the last World Bank’s 2020 Doing Business report, Brunei ranked 66th out of 190 in terms of its business climate (down 11 places).

 

Country Comparison For the Protection of Investors

  Brunei Darussalam East Asia & Pacific United States Germany
Index of Transaction Transparency* 4.0 5.9 7.0 5.0
Index of Manager’s Responsibility** 8.0 5.2 9.0 5.0
Index of Shareholders’ Power*** 8.0 6.7 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

 
Foreign Direct Investment 201920202021
FDI Inward Flow (million USD) 375577205
FDI Stock (million USD) 7,127.07,589.07,301.7
Number of Greenfield Investments* 1.02.01.0
Value of Greenfield Investments (million USD) 4313,694117

Source: UNCTAD - Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

 

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Tax Rates

No consumption tax.
No VAT is levied in Brunei
Company Tax
18.5%, charged on a threshold basis as follows:
- 25% of the first BND 100,000 of assessable income is charged at 18.5%;
- 50% of the next BND 150,000 of assessable income is charged at 18.5%;
- the full amount of the remaining assessable income is charged at 18.5%
Withholding Taxes
Dividends: 0%; Interests: 0% (residents)/2.5% (non-residents); Royalties: 0% (residents)/10% (non-residents).
Social Security Contributions Paid By Employers
5% contribution to the Employees Trust Fund, plus 3.5% supplementary pension contribution.
Other Domestic Resources
System for Tax Administration and Revenue Services (STARS)
Overview of 'Brunei's tax measures in response to Covid-19
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.
 
 

Individual Taxes

Brunei does not levy any income tax on individuals 0%
Remuneration paid to a non-resident director 10% withholding tax
 
 

Country Comparison For Corporate Taxation

  Brunei Darussalam East Asia & Pacific United States Germany
Number of Payments of Taxes per Year 5.0 23.4 10.6 9.0
Time Taken For Administrative Formalities (Hours) 52.5 195.1 175.0 218.0
Total Share of Taxes (% of Profit) 8.0 33.8 36.6 48.8

Source: Doing Business - Latest available data.

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Investment Opportunities

Tenders, Projects and Public Procurement
Tenders Info, Tenders in Brunei
DgMarket, Tenders Worldwide
Setting Up a Company
Consult Doing Business Website, to know about procedures to start a Business in Brunei Darussalam.
Useful Resources
Brunei Investment Agency
 

Business Setup Procedures

Setting Up a Company Brunei Darussalam East Asia & Pacific
Procedures (number) 3.00 7.25
Time (days) 5.50 29.73

Source: Doing Business.

 
 
 

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Latest Update: May 2022

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