Doing Business in Brunei Darussalam 2014 Country

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Return to table of contents,Chapter 1 Doing Business In Brunei Darussalam. Market Overview,Market Challenges,Market Opportunities. Market Entry Strategy,Fact Sheet,Market Overview Return to top. Brunei Darussalam is a Southeast Asian oil rich Sultanate on the northern coast. of Borneo A British protectorate until 1984 it boasts a well educated and largely. English speaking population excellent infrastructure and a government intent on. diversifying the economy and bringing foreign investment to Brunei. Despite repeated calls for diversification Brunei s economy remains. overwhelmingly dependent on the income derived from the sale of oil and gas. which represents 91 5 of Brunei s total exports and 67 7 of gross domestic. product 2011 Additionally substantial revenue from overseas investment. supplements income from domestic production These two revenue streams. provide a comfortable quality of life for Brunei s population Citizens pay no. taxes and receive free education through to the university level free medical care. and subsidized housing, Brunei s central location in Southeast Asia with good telecommunications and. airline connections no personal income sales or export taxes and its stable. political situation offer a welcoming climate for would be investors Brunei has an. investment incentive scheme where companies that are granted a pioneer. certificate can enjoy corporate tax exemptions up to 5 8 or 11 years with. possible extensions depending on the nature of industry and amount of fixed. capital through a program administered by the Ministry of Industry and Primary. Resources Additionally a low crime rate good schools housing and sports. facilities as well as low utility costs make Brunei an attractive location for short. and long term residence Life in Brunei reflects the national philosophy of the. Malay Islamic Monarchy MIB in Malay, Brunei has no debt domestic or foreign and has not been the recipient of.
economic aid Despite importing most consumer goods and food Brunei s large. oil exports keep its trade balance positive The Brunei dollar is pegged to the. Singapore dollar at a one to one ratio and the Singapore dollar is legal tender in. the Sultanate, The five largest destinations for Brunei exports mostly mineral fuels in 2013. were Japan 39 8 Korea 16 3 India 7 6 Australia 7 3 and Vietnam. 5 3 The five largest sources of imports to Brunei during 2013 were Malaysia. 21 9 Singapore 19 1 China 11 2 the United States 11 1 and. Japan 5 8 The largest import sectors by market value were machinery and. transport equipment manufactured goods and food, Brunei is currently the United States 121st largest goods trading partner with. 576 million in total two way trade during 2013 The U S trade surplus with. Brunei was 541 million in 2013 exports totaled 559 million imports totaled 17. million Brunei is a negotiating partner in the Trans Pacific Partnership TPP. Market Challenges Return to top, With a population of 425 000 in 2014 Brunei s local market is relatively small. Foreign enterprises are allowed 100 ownership of Business scope operation. and investment As such it is not a requirement for foreign investors to find a. local partner to enter the market However in certain cases foreign companies. may be required to find a local partner to enter the market in order to be qualified. for certain government and Brunei Shell Petroleum projects U S. businesses investors should expect delays sometimes long ones when. dealing with the local government,Market Opportunities Return to top. Formed in 2001 the Brunei Economic Development Board BEDB promotes. Brunei as an investment destination to stimulate and develop the domestic. economy away from dependence on oil and gas revenues BEDB is mandated. to work with foreign and domestic investors to develop new economic. opportunities where Brunei has competitive advantages focusing on four key. growth areas attracting investments strengthening local businesses increasing. Research and Development R D and innovation and delivering infrastructure. BEDB has identified several industries as potential investment sectors in its. efforts to diversify the economy including aviation green energy data centers. and halal food pharmaceutical processing BEDB has also launched several. National Housing supply and infrastructure projects Further information on. BEDB s projects is available at BEDB s website http www bedb com bn U S. firms are welcome to participate in BEDB s projects. BEDB has identified and dedicated several industrial parks for the purpose of. accommodating foreign direct investments including. 1 Sungai Liang Industrial Park SPARK Gas based petrochemicals. 2 Pulau Muara Besar PMB oil and gas downstream and supporting. activities, 3 Salambigar Industrial Park SIP Formerly known as Lambak Kanan East.
LKE Food pharmaceutical cosmetics and light industries. 4 Rimba Digital Junction High technology industries and data center. 5 Bukit Panggal Industrial Park Energy intensive industries. 6 Telisai Industrial Site Aquaculture and mixed industries. 7 Anggerek Desa Technology Park ADTP iCentre KHub ADTP phase. 3 ICT related industries, The Government of Brunei has established several agencies to promote foreign. investment In addition to BEDB the Brunei Industrial Development Authority. the Malay acronym is BINA has developed several industrial parks near the. Muara Port and in other parts of Brunei close to transportation infrastructure to. facilitate and nurture small and medium sized enterprises The government has. also solicited bids from foreign companies for a number of recent major. infrastructure projects for both civilian and military uses Further information on. BINA is available at BINA s website http www bina gov bn. The Ministry of Industry and Primary Resources offers an investment incentive. scheme where companies that are granted the pioneer certificate can enjoy. corporate tax exemption of up to 5 8 or 11 years with a possible extension. depending on the nature of industry and amount of fixed capital Sole. proprietorships and partnerships are not subject to tax Individuals do not pay. any capital gains tax and profits arising from the sale of capital assets are not. taxable Brunei has double taxation agreements with Britain Indonesia China. Singapore Vietnam Bahrain Oman Japan and Pakistan Malaysia Hong. Kong Laos and Kuwait Tax on petroleum operations is codified in the 1960. Income Tax enactment which is similar to tax policies in other oil producing. Investment opportunities in Brunei are driven both by government planning and. consumer demand The most attractive commercial sectors include. o Oil and Gas Upstream and Downstream,o Commercial Aviation. o Construction,o Defense Industry Equipment,o Franchising. o Renewable Energy and Clean Technology,o Information and Communication Technology. In the agricultural sector the following two investment opportunities may offer. lucrative investment opportunities,o Food Imports Food Production.
o Fishing Industry Aquaculture, Brunei has a biotechnology industry that seeks to benefit from international. expertise There are also opportunities in the healthcare technology and medical. devices sector,Market Entry Strategy Return to top. Brunei s population largely clustered around the capital Bandar Seri Begawan. with other population centers connected by a well maintained highway system. provides a ready destination for U S exports with low transit costs once goods. arrive in country The relatively small population of Brunei is an asset in that. exported products once a foothold is gained may gain national prominence. relatively quickly, Market access and promotion strategies typically focused on cities may be. applied with modification to enter the Brunei market Firms that are able to. export goods and services that will serve to increase the capacity of Bruneian. enterprise and increase Bruneian employment will be particularly welcomed. U S businesses should build personal relationships with local representatives. and customers through regular visits or by establishing resident representation. U S companies can set up their subsidiary companies or branch offices in Brunei. as private limited companies registered with the Registrar of Companies and. Business Names, Please note that throughout this report except where otherwise noted the. following Brunei dollar U S dollar exchange rates were used. 2009 1 513,2010 1 418,2011 1 308,2012 1 300,2013 1 245.
2014 1 250,The source of the rates above is, http www irs gov Individuals International Taxpayers Yearly Average Currency. Exchange Rates,Return to table of contents,Return to table of contents. Chapter 2 Political and Economic Environment, For background information on the political and economic environment of the country. please click on the link below to the U S Department of State Background Notes. http www state gov r pa ei bgn 2700 htm,Return to table of contents. Return to table of contents,Chapter 3 Selling U S Products and Services.
Using an Agent or Distributor,Establishing an Office. Franchising,Direct Marketing,Joint Ventures Licensing. Selling to the Government,Distribution and Sales Channels. Selling Factors Techniques,Electronic Commerce,Trade Promotion and Advertising. Sales Service Customer Support,Protecting Your Intellectual Property.
Due Diligence,Local Professional Services,Web Resources. Using an Agent or Distributor Return to top, Personal relationships are important in Brunei and U S businesses may find a reputable. local agent distributor worthwhile The individual should be thoroughly familiar with local. business customs and high ranking government officials The Commercial Section of. the U S Embassy provides services that can help U S businesses locate an appropriate. agent distributor The U S Department of Commerce provides detailed descriptions of. the commercial services provided to U S businesses wanting to do business in Brunei. on its website http brunei usembassy gov doing business in brunei html. Establishing an Office Return to top, Businesses may be established in Brunei as sole proprietorships partnerships or. branches of a foreign company Generally U S companies operating in Brunei must. either register as a branch of a foreign company or incorporate as a Brunei limited. company with the Registrar of Companies within the Ministry of Finance Foreigners are. not eligible for sole proprietorship, With the exception of sole proprietorships foreign investors can fully own incorporated. companies foreign company branches or representative offices Partnerships generally. require the participation of Brunei citizens although some dispensation for companies. with 100 foreign equity may be made for high tech or export oriented firms. American businesses can establish a private or public corporation Sendirian Berhad or. limited by Guarantee company As a private corporation the business must have at. least two Directors one of which must be a resident of Brunei A public corporation. must have at least seven shareholders with no residency requirement Branches of. foreign companies can be established in Brunei without local incorporation The branch. office must have a registered office in Brunei and must appoint two local authorized. persons Currently the branches are subject to a 20 corporate tax rate of annual gross. profit but it was announced in the 2014 legislative council session that the corporate tax. will be reduced to 18 5 by 2015, Foreign direct investments by multi national corporations may not require local.
partnership in setting up a subsidiary of their parent company in Brunei However at. least one company director must be a Brunei citizen or permanent resident. A multinational company with an operating plant in a Ministry of Industry and Primary. Resources MIPR industrial park is required to have 30 of its board represented by. Brunei citizens or permanent residents, While no central system exists to help locate foreign and domestic partners MIPR and. the Brunei Economic Development Board BEDB can informally announce a company s. interest in finding an agent distributor or partner through their business channels. The Authority for Info Communications Technology Industry AITI offers assistance to. local information and communications technology ICT small and medium sized. enterprises SMEs to connect with potential ICT partners and customers The AITI. website provides additional information on these services. http www aiti gov bn industrydevelopment ebusiness marketcreation Pages ebusiness. marketcreation aspx,Additional Resources,BEDB s guide to setting up a company in Brunei. http www bedb com bn doing guides setting company html. Ministry of Foreign Affairs and Trade s guide to setting up businesses in Brunei. http www mofat gov bn index php investing in brunei darussalam setting up. businesses, Ministry of Foreign Affairs and Trade s 2012 Ease of Doing Business Report. http www industry gov bn index php option com content view article id 401. brunei darussalam ease of doing business 2012,Registry of Companies Ministry of Finance. http www mof gov bn index php divisions registry of companies and business. Export gov Brunei,http export gov singapore doingbusine.
profit but it was announced in the 2014 legislative council session that the corporate tax will be reduced to 18 5 by 2015 Foreign direct investments by multi national corporations may not require local partnership in setting up a subsidiary of their parent company in Brunei However at

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