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Brunei

Executive Summary

Brunei is a small, energy-rich sultanate on the northern coast of Borneo in Southeast Asia. Brunei boasts a well-educated, largely English-speaking population, excellent infrastructure, and a government intent on attracting foreign investment and projects. In parallel with Brunei’s efforts to attract foreign investment and create an open and transparent investment regime, the country has taken steps to streamline the process for entrepreneurs and investors to establish businesses and has improved its protections for Intellectual Property Rights (IPR).

Despite ambitions to diversify, Brunei’s economy remains dependent on the income derived from sales of oil and gas, contributing about 50 percent to the country’s GDP. Substantial revenue from overseas investment supplements income from domestic hydrocarbon production. These two revenue streams provide a comfortable quality of life for Bruneians by regional standards. Citizens are not required to pay taxes and have access to free education through the university level, free medical care, and subsidized housing and car fuel.

Brunei has a stable political climate and is generally sheltered from natural disasters. Its central location in Southeast Asia, with good telecommunications and airline connections, business tax credits in specified sectors, and no income, sales, or export taxes, offers a welcoming climate for potential investors. Sectors offering U.S. business opportunities in Brunei include aerospace and defense, agribusiness, construction, petrochemicals, energy and mining, environmental technologies, food processing and packaging, franchising, health technologies, information and communication, digital finance, and services. Brunei has ambitious climate change goals, aspiring to lower greenhouse gas emissions by more than 50 percent and increase its share of renewable energy to 30 percent of total capacity by 2035.

Brunei continues to take a cautious approach against the COVID-19 pandemic despite having fully immunized 95 percent of the population. As of March 2022, although the country is not under lockdown, Brunei has not fully opened its borders to non-essential travel. Travelers entering the country are required to obtain permission from the Prime Minister’s Office.

In 2014, Brunei began implementing sections of its Sharia Penal Code (SPC) that expanded preexisting restrictions on activities such as alcohol consumption, eating in public during the fasting hours in the month of Ramadan, and indecent behavior, with possible punishments including fines and imprisonment. The SPC functions in parallel with Brunei’s common law-based civil penal code. The government commenced full implementation of the SPC in 2019, introducing the possibility of corporal and capital punishments including, under certain evidentiary circumstances, amputation for theft and death by stoning for offenses including sodomy, adultery, and blasphemy. Government officials emphasize that sentencing to the most severe punishments is highly improbable due to the very high standard of proof required for conviction under the SPC. While the SPC does not specifically address business-related matters, potential investors should be aware that the SPC generated global controversy when it was implemented due to its draconian punishments and inherent discrimination toward LGBT communities. The sultan declared a moratorium on the death penalty for sharia crimes in response to the outcry and there have been no recorded incidents of U.S. citizens or U.S. investments directly affected by sharia law.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2020 35 of 175 http://www.transparency.org/research/cpi/overview
Global Innovation Index 2021 82 of 132 https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner country ($M USD, historical stock positions) 2020 USD $11.0 million https://apps.bea.gov/international/factsheet/
World Bank GNI per capita 2020 USD $31,510 https://data.worldbank.org/indicator/NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign Investment

3. Legal Regime

4. Industrial Policies

5. Protection of Property Rights

6. Financial Sector

7. State-Owned Enterprises

Brunei’s state-owned enterprises (SOEs), managed by Darussalam Assets under the Ministry of Finance and Economy, lead key sectors of the economy including oil and gas, telecommunications, transport, and energy generation and distribution. These enterprises also receive preferential treatment when responding to government tenders. Some of the largest SOEs include the following:

The telecommunications industry is dominated by government-linked companies. The service providers are Datastream Digital, Imagine, and Progresif. In 2019, the government consolidated the infrastructure of all three companies under a state-owned wholesale network operator called Unified National Networks (UNN).

Royal Brunei Technical Services (RBTS), established in 1988 as a government owned corporation, is responsible for managing the acquisition of a wide range of systems and equipment.

Brunei Energy Services and Trading (BEST) is the national oil company owned by the Brunei government. The company was granted all mineral rights in eight prime onshore and offshore petroleum blocks totaling 20,552 sq. km. PB manages contracts with Shell and Petronas, which are exploring Brunei’s onshore and deep-water offshore blocks. The government continues to modify BEST’s role in the oil and gas industry. In 2019, the government established Petroleum Authority as the oil and gas sector’s regulatory body, a function which had been filled by BEST.

Royal Brunei Airlines started operations in 1974 and is the country’s national carrier. The airline flies a combination of Boeing and Airbus aircraft.

8. Responsible Business Conduct

Responsible business conduct is a relatively new concept in Brunei, and there are no specific government programs encouraging foreign and local enterprises to follow generally accepted corporate social responsibility (CSR) principles. However, there is broad awareness of CSR among producers and consumers, and individual private and public sector organizations have formalized CSR programs and policies. There are no reporting requirements and no independent NGOs in Brunei that promote or monitor CSR.

9. Corruption

Since 1982, Brunei has enforced the Emergency (Prevention of Corruption) Act. In 1984, the Act was renamed the Prevention of Corruption Act (Chapter 131) . The Anti-Corruption Bureau (ACB) was established in 1982 for the purpose of enforcing the Act. The Prevention of Corruption Act provides specific powers to the ACB for the purpose of investigating accusations of corruption. The Act authorizes ACB to investigate certain offences under other written laws, provided such offences were disclosed during the course of ACB investigation. Corrupt practices are punishable under the Prevention of Corruption Act, which also applies to Brunei citizens abroad. Brunei is a member of the International Association of Anti-Corruption Authorities.

In 2019, Brunei was ranked 35th of 180 countries worldwide in Transparency International’s corruption perception index. U.S. companies do not generally identify corruption as an obstacle to conducting business in Brunei. The level and extent of reported corruption in Brunei is generally low. In January 2020, however, the government convicted two former judges with embezzling large sums from the court system. The sultan has repeatedly stated in public addresses that corruption is unacceptable.

Apart from the Anti-Corruption Bureau, there are no international, regional, local, or nongovernmental organizations operating in Brunei that monitor corruption.

Brunei has signed and ratified the UN Anticorruption Convention.

Resources to Report Corruption

Government Point of Contact:

Name: Hjh Anifa Rafiza Hj Abdul Ghani
Title: Director
Organization: Anti-Corruption Bureau Brunei Darussalam
Address: Old Airport Berakas, BB 3510 Brunei Darussalam
Tel: +673 238-3575
Fax: +673 238-3193
Mobile: +673 8721002 / +673 8130002
Email: info.bmr@acb.gov.bn 

10. Political and Security Environment

Brunei is an absolute monarchy and has no recent history of political violence. Sultan Hassanal Bolkiah is an experienced and popular monarch who rules the country as Prime Minister while also retaining the titles of Minister of Finance and Economy, Minister of Defense, and Minister of Foreign Affairs. The country experienced an uprising in 1962 when it was a British protectorate, which ended through the intervention of British troops. The country has been ruled peacefully under emergency law ever since. Brunei has managed to avoid demands for political reform by making use of its hydrocarbon revenues to provide its citizens with generous welfare benefits and subsidies.

11. Labor Policies and Practices

Brunei relies heavily on foreign labor in lower-skill and lower-paying positions, with approximately 25 percent of the labor force coming in from abroad to fulfill specific contracts. The largest percentage of foreign employees work in construction, followed by wholesale and retail trade, with the balance serving in professional, technical, administrative and support roles. Most unskilled laborers in Brunei are from Bangladesh, Indonesia, and the Philippines, and enter the country on renewable two-year contracts.

The skilled labor pool includes both foreign workers on short-term visas and Bruneian citizens and permanent residents, who often are well-educated but who generally prefer to work for the government due to generous benefits such as bonuses, education allowances, interest-free loans, and housing allowances. In 2019, the Labor Force Survey stated that approximately 33.8 percent of the labor force was employed in the public sector. In 2016, the Department of Labor under the Ministry of Home Affairs introduced an improved Foreign Workers License process with stricter policies to create more employment opportunities for Brunei citizens.

While the law permits the formation of trade union federations, it forbids affiliation with international labor organizations unless there is consent from the Minister of Home Affairs and the Department of Labor. Under the Trade Unions Act of 1961, unions must be registered with the government. The government prohibits strikes, and the law makes no explicit provision for the right to collective bargaining. The law prohibits employers from discriminating against workers in connection with union activities, but it does not provide for reinstatement for dismissal related to union activity.

All workers, including civil servants other than those serving in the military and those working as prison guards or police officers, may form and join trade unions of their choice without previous authorization or excessive requirements. The only active union in the country, which is composed of Brunei Shell Petroleum workers, appears to have had minimal activity in recent years. There are no other active unions or worker organizations.

Various domestic laws prohibit the employment of children under the age of 16. Parental consent and approval by the Labor Commission are required for those under the age of 18. Female workers under 18 years of age may not work at night or on offshore oil platforms. The Department of Labor enforces laws related to the employment of children. There were no reports of violations of child labor laws.

The law does not set a minimum wage. The public sector pay scale covers all workers in government jobs. Wages for employed foreign residents are wide ranging. Some foreign embassies set minimum wage requirements for their nationals working in the country.

Government data indicated approximately 94,200 foreigners live in Brunei, although government officials have publicly stated the number exceeds 100,000. Foreign workers receive a mandatory brief on labor rights from the Department of Labor when they sign their contract. The government also inspects workplaces and maintains a telephone hotline for worker complaints. Immigration law allows prison sentences and caning for workers who overstay their work permits and for workers who fall into irregular status due to their employers’ negligence.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount  
Host Country Gross Domestic Product (GDP) ($M USD) 2020 $12.211 billion 2020 $12.006 billion www.worldbank.org/en/country
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2020 $2.6 million 2020 $11.0 million BEA data available at https://apps.bea.gov/international/factsheet/
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A N/A N/A No data available
Total inbound stock of FDI as % host GDP 2020 $7.45 billion 2020 63.2% UNCTAD data available at

https://unctad.org/topic/investment/world-investment-report 

* Source for Host Country Data: Department of Economic Planning and Statistics, Ministry of Finance and Economy Brunei Darussalam 

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment (Not Available)
Total Inward 7,589 100% Total Outward Amount 100%
China 2,646 35% Country #1 Amount X%
United Kingdom 2,608 34% Country #2 Amount X%
The Netherlands 855 11% Country #3 Amount X%
Singapore 387 5% Country #4 Amount X%
Japan 259 3% Country #5 Amount X%
“0” reflects amounts rounded to +/- USD 500,000.

Source: IMF Coordinated Direct Investment Survey (2020)

14. Contact for More Information

U.S. Embassy Commercial Section
Simpang 336-52-16-9
Jalan Duta BC 4115
(+673) 238-4616
+637 238-4616 ext. 2232
BSBCommercial@state.gov 

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