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 improved its protections for Intellectual Property Rights (IPR).

Despite repeated calls for diversification, Brunei’s economy remains dependent on the income derived from sales of oil and gas, contributing about 60 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 Brunei’s population. Citizens are not required to pay taxes, have access to free education through the university level, free medical care, and frequently, subsidized housing and car fuel.

Brunei has a stable political climate and is generally sheltered from natural disasters. Brunei’s central location in Southeast Asia, with good telecommunications, numerous 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, Islamic finance, and services. In 2014 Brunei released an Energy White Paper outlining its vision of leveraging its oil wealth to diversify its economy, create local employment, increase foreign direct investment (FDI), and sharply increase the use of renewable energy by 2035. Thus far, the government has shown it is committed to the priorities outlined in the Energy White Paper.

In 2014, Brunei began supplementing its existing common law-based penal system with a penal code based on Islamic law, which carries Sharia punishments. The Sharia Penal Code is applicable across the board. The first phase became effective in May 2014 and remains in place today. It expands restrictions regarding alcohol consumption, eating in public during the fasting hours in the month of Ramadan, and indecent behavior. Two subsequent phases, the timing of which is not yet clear, are expected to introduce severe punishments such as stoning to death for certain sex-related offenses and the amputating of limbs. Brunei officials say the most severe punishments will rarely, if ever, be implemented given the very high standard of proof required under the Sharia Penal Code. While the law does not specifically address business-related matters, potential investors should be aware that there is controversy surrounding the Sharia Penal Code issue. Thus far there have been no recorded instances of U.S. citizens, or U.S. investments, being targeted by the Sharia law.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2016 41 of 175 http://www.transparency.org/
World Bank’s Doing Business Report “Ease of Doing Business” 2016 84 of 190 doingbusiness.org/rankings
Global Innovation Index* 2016 N/A https://www.globalinnovationindex.org/
U.S. FDI in partner country ($M USD, stock positions) 2015 $ 7.0 M http://www.bea.gov/
World Bank GNI per capita 2015 $ 38,010 http://data.worldbank.org/

Policies Towards Foreign Direct Investment

Brunei has an open economy favorable to foreign trade and FDI as the government continues its economic diversification efforts to limit its long reliance on oil and gas exports.

FDI is important to Brunei as it plays a key role in the country’s economic and technological development. Brunei encourages FDI in the domestic economy through various investment incentives offered by the Energy and Industry Department, Prime Minister’s Office, and through activities conducted by the Ministry of Foreign and Trade and the Brunei Economic Development Board.

The 2016 World Bank Ease of Doing Business report indicated that Brunei’s ease of doing business ranking improved 21 spots to 84 out of 189 economies. The significant gain due largely to improvements in the “starting a business” indicator, which saw Brunei’s ranking improve to the 74th spot from last year’s 79th due to the elimination of miscellaneous licensing requirements and streamlining the business registration processes, mostly of which can be done online. Other indicators that have improved include paying taxes (6th in 2016, from 30th in 2015), obtaining construction permits (21st in 2016, from 53rd in 2015), and accessing credit (79th in 2016, from 89thin 2015). Improving Brunei’s Ease of Doing Business ranking has become a key focus for the government, and the Prime Minister’s Office has setup a special task force, referred to as “PENGGERAK to centralize government efforts to improve this ranking.

Brunei amended its laws to make it easier and quicker for entrepreneurs and investors to establish businesses. The Business License Act (Amendment) of 2016 exempts several business activities (eateries, boarding and lodging houses or other places of public resort; street vendors and stalls; motor vehicle dealers; petrol stations including places for storing petrol and inflammable material; timber store and furniture factories; and retail shops and workshops) from needing to obtain a business license. The Miscellaneous License Act (Amendment) of 2015 reduces the wait times for new business registrants to start operations, with low-risk businesses like eateries and shops able to start operations immediately.

Limits on Foreign Control and Right to Private Ownership and Establishment

There is no restriction on total foreign ownership of companies incorporated in Brunei. The Companies Act requires locally incorporated companies to have at least one of the two directors—or if more than two directors, at least two of them—to be ordinarily resident in Brunei, but exemptions may be obtained in some circumstances. The rate of corporate income tax is the same whether the company is locally or foreign owned and managed.

All businesses in Brunei must be registered with the Registry of Companies and Business Names at the Ministry of Finance. Foreign investors can fully own incorporated companies, foreign company branches, or representative offices, but not sole proprietorships and partnerships. FDI from multinational corporations may not require a local partner in setting up a subsidiary in Brunei if at least one company director is a Brunei citizen or permanent resident.

More information on incorporation of companies can be found here on the Ministry of Finance website .

Other Investment Policy Reviews

The World Trade Organization (WTO) Secretariat prepared a Trade Policy Review of Brunei in December 2014. The review can be found online at the WTO website .

Business Facilitation

As part of Brunei’s effort to attract foreign investment, several facilitating agents were established including: the Brunei Economic Development Board (BEDB), FDI Action and Support Center (FAST), and Darussalam Enterprise (DARe). These organizations work together to smoothen the process of obtaining permits, approvals and licenses. Facilitating services are now consolidated into one government website .

BEDB, the frontline agency that promotes and facilitates foreign investment into the country, works with FAST under the Prime Minister’s Office to evaluate investment proposals, liaise with government agencies and obtain project approval from the government’s Foreign Direct Investment and Downstream Industry Committee. DARe will then support international investments once they are in full operation.

Outward Investment

A major share of outward investment is made by the government through its sovereign wealth funds, which are managed by the Brunei Investment Agency (BIA) under the Ministry of Finance. No data is available on the total investment amount due to a strict policy of secrecy. It is believed that the majority of sovereign wealth funds are invested in foreign portfolio investments and real estate. State-owned Brunei National Petroleum Company has also evolved into an outward foreign investor, winning tenders to explore and develop onshore blocks in Myanmar. Despite the limited availability of public information regarding the amount, the funds are generally viewed positively and managed well by BIA.

Brunei is a member of the Association of Southeast Asian Nations (ASEAN), as association of ten Southeast Asian nations, which has Free Trade Agreements (FTA) with Australia, New Zealand, China, India, and South Korea, and a Comprehensive Economic Partnership Agreement with Japan.

Brunei currently has Bilateral Investment Treaties with Bahrain, China, Germany, India, the Republic of Korea, Kuwait, Oman, and Ukraine. Brunei does not currently have a Bilateral Investment Treaty with the U.S. Information on Brunei’s Bilateral Investment Treaties can be found on the Ministry of Finance website .

Brunei served as the ASEAN Coordinator in negotiations for the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), which was signed February 2009 in Thailand and entered into force January 2010. Brunei is also negotiating party to the Regional Comprehensive Economic Partnership (RCEP), and was a founding member of the Trans-Pacific Partnership (TPP) trade agreement.

Brunei does not have a Bilateral Taxation Treaty with the United States. Information on Brunei’s taxation treaties can be found on the Ministry of Finance website .

Transparency of the Regulatory System

Brunei’s regulatory system is generally seen as lacking in transparency. There is little to no transparency in lawmaking processes, nor is there any available information on whether impact assessments are made prior to proposing regulations. Each ministry is responsible for coordinating with the Attorney General’s Chambers to draft proposed legislation. Legislation does not received broad review and few outside of the originating ministry are able to provide their input. The Sultan has final authority to approve proposed legislation. Laws and regulations that are in effect are readily available and accessible from the Attorney General’s Chambers.

International Regulatory Considerations

Brunei is an active member of ASEAN, through which if has concluded FTAs with Australia & New Zealand, China, India, Japan and South Korea. Brunei became a WTO member in 1995 and a signatory to the General Agreement on Tariffs and Trade (GATT) in 1993.

Legal System and Judicial Independence

Brunei’s constitution does not specifically provide for judicial independence, but in practice the court system operates without government interference. Brunei’s legal system includes parallel systems; one based on Common Law and the other based on Islamic law. In 2016, Brunei began to recognize the importance of protecting investors’ rights and contracts enforcement, and established a Commercial Court. In 2014, Brunei implemented Phase one of three of the Sharia Penal Code (SPC), which expanded existing restrictions on minor offenses—such as eating during Ramadan—that are punishable by fines.

The second phase of the SPC, which would include amputating the hands of thieves, is not scheduled to come into effect until one year after the publication of a Sharia Courts Criminal Procedure Code (CPC). The CPC has yet to be published. Phase three of the SPC – which includes punishments, in certain situations, such as stoning to death for rape, adultery, or sodomy, and execution for apostasy, contempt of the Prophet Muhammad, or insult of the Quran – is scheduled to be implemented two years after the publication of the CPC. The punishments included in phases two and three include different standards of proof than the common law-based penal code, such as requiring four pious men to witness personally an act of fornication to support a sentence of stoning.

Laws and Regulations on Foreign Direct Investment

The basic legislation on investment includes the Investment Incentive Order 2001 and Income Tax (As Amended) Order 2001Investment Order 2001 supports economic development in strategically important industrial and economic enterprises and through the Energy and Industry Department of the Prime Minister’s Office EIDPMO, offers investment incentives through a favorable tax regime. Although Brunei does not have a stock exchange, government plans to establish a securities market are reportedly under way.

Foreign ownership of companies is not restricted, although under the Companies Act, at least one of two directors of a locally incorporated company must be a resident of Brunei, unless granted an exemption from the appropriate authorities.

Business Registration

All businesses in Brunei must be registered with the Registry of Companies and Business Names at the Ministry of Finance. Except for sole proprietorships and partnerships, foreign investors can fully own incorporated companies, foreign company branches, or representative offices. 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 of Brunei. Brunei’s “one-stop-shop” website for investments and business start-ups can be found here .

Competition and Anti-Trust Laws

Brunei does not have any competition legislation pertaining to the regulation of competition issues. In May 2012, Brunei formally started drafting the Brunei Competition Order, which seeks to enact prohibitions against anti-competitive agreements, abuse of dominance, and anti-competitive mergers. As of March 2017, there is no information on when the law might be approved and implemented.

Expropriation and Compensation

There is no history of expropriation of foreign owned property in Brunei. There have been cases of domestically owned private property being expropriated for infrastructure development. Compensation was provided in such cases, and claimants were provided with due process regarding their disputes.

Dispute Settlement

ICSID Convention and New York Convention

Brunei is a member state to the convention on the International Center for Settlement of Investment Disputes (ICSID Convention) and a signatory to the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention).

Investor-State Dispute Settlement

In 2016, Brunei’s Supreme Court announced the establishment of a commercial court to deal with business-related cases. More information about Brunei’s judiciary system is available at through their website .

International Commercial Arbitration and Foreign Courts

In May 2016, Brunei’s Attorney General’s Chambers has announced the establishment of the Brunei Darussalam Arbitration Center (BDAC). BDAC delivers services and administration for arbitration and mediation to fulfil the needs of domestic and international users in relation to commercial disputes, as a resolution alternative to court proceedings.

The International Arbitration Order (IAO) which regulates international and domestic arbitrations came into effect in February 2010. More information about Brunei’s Attorney General’s Chambers is available online .

Bankruptcy Regulations

In 2012, amendments to Brunei’s Bankruptcy Act increased the minimum threshold for declaring bankruptcy from BND 500 to BND 10,000 (USD $357 to USD $7,133) and enabled the trustee to direct the Controller of Immigration to impound and retain the debtor’s passport, certificate of identity, or travel document to prevent him from leaving the country. The amendment also requires the debtor to deliver all property under his possession to the trustee. Information about Brunei’s bankruptcy laws is available on the judiciary’s website .

Investment Incentives

Companies involved in the exportation of agriculture, forestry, and fishery products can apply for tax relief on export profits. For non-pioneer enterprises, the tax relief period is eight years and up to 11 years for pioneer enterprises.

The corporate income tax rate in Brunei has been reduced from 30 percent (2007 and earlier) to the current rate of 18.5 percent (2015 onwards).

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 the United Kingdom, Indonesia, China, Singapore, Vietnam, Bahrain, Oman, Japan, Pakistan, Malaysia, Hong Kong, Laos, Kuwait, Tajikistan, Qatar, and United Arab Emirates. Under the Income Tax (Petroleum) Act, a company is subject to taxes of up to 55 percent for any petroleum operation pursuant to production sharing agreements.

Foreign Trade Zones/Free Ports/Trade Facilitation

Muara Port is Brunei’s main seaport with an established Free Trade Zone called the Muara Export Zone (MEZ), which was established to promote and develop Brunei as a trade hub of the region. The establishment of the MEZ was an initial step towards developing other Free Trade Zones in the country. In Brunei’s 2017 Legislative Council session, the government announced that a 96 hectare area near Muara Port will be designated to be a Free Trade Zone.

Performance and Data Localization Requirements

The Brunei government seeks to increase the number of Bruneians working in the private sector. Brunei’s 2014 Energy White Paper calls for the number of people employed in the energy sector to increase from 20,000 in 2010 to 50,000 in 2035, and for the number of locals employed in the sector to increase from 10,000 to 40,000 during the same period. To advance this goal, all companies competing for a tender in the oil and gas industry are required to have at least half of their employees be Bruneian.

Expatriate employment is controlled by a labor quota system administered by the Labor Department and the issuance of employment passes by the Immigration Department. Brunei allows new companies to apply for special approval to expedite the recruitment of expatriate workers in select positions. According to the Ministry of Home Affairs, the special approval is only available to new companies for up to six months, and covers businesses such as restaurants and shops. The special approval cuts the waiting time for a quota to seven days instead of twenty one.

Currently, Brunei has not announced any specific legislation pertaining to data storage and data localization requirements. In early 2016, the Prime Minister’s Office (PMO) announced plans to develop a National Cyber Defense Framework which is expected to be completed by the end of 2017.

Real Property

Mortgages are recognized and enforced in Brunei; however, only Bruneians can own land property in Brunei. Foreigners and permanent residents can only hold properties under long-term leases. Most banks are reluctant to grant housing loans to foreigners and permanent residents. According to the International Monetary Fund (IMF) Brunei country report, Brunei did not attract any Foreign Direct Investment for real estate, rentals, and business activity in 2011 (latest data available). Brunei’s Department of Economic Planning and Development do not publish FDI data for real estate. The country is currently ranked 135 out of 190 economies for Registering Property in the World Bank’s Doing Business Report, this is because every transfer of ownership in Brunei Darussalam requires the approval of “His Majesty in Council” which is a council of officials representing the Sultan. This process can be lengthy and at times opaque.

Amendments to the Land Code are being considered to ban past practices of proxy land sales to foreigners and permanent residents using power of attorney (PA) and trust deeds (TD). PAs and TDs are no longer recognized as mechanisms in land transactions involving non-citizens. The proposed laws will also be retroactive, converting all existing property owned through PAs and TDs into 60-year leases. The government may grant temporary occupation permits over state land to applicants, for licenses to occupy land for agricultural, commercial, housing or industrial purposes. These licenses are not registered, and are granted for renewable annual terms.

Intellectual Property

Brunei’s intellectual property rights (IPR) protection and enforcement regime is still in development but is increasingly strong and effective. The country was removed from the U.S. Trade Representative’s Special 301 report in 2013, and has stayed off in recognition of its improving IPR protections, increasing enforcement, and efforts to educate the public about the importance of IPR.

Brunei’s Copyright (Amendment) Order 2013 was finalized and adopted in December 2013, a development long requested by the U.S. government. The amendment enhanced enforcement provisions for copyright infringement by increasing the penalties for IP offences; adding new offenses; strengthening the enforcement powers of the Royal Brunei Police Force and the Ministry of Finance Customs and Excise Department; and allowing for sanctioned private prosecution. The amendments are designed to deter copyright infringements with fines of BND 10,000 (USD $7,400) to BND 20,000 (USD $14,800) per infringing copy, imprisonment for a term up to five years, or both. The new penalty is up to four times more severe than the previously existing penalty. Enforcement agencies are authorized to enter premises and arrest without warrant, to stop, search, and board vehicles and also to access computerized and digitized data. The amendments further allow for admissibility of evidence obtained covertly and protect the identity of informants. Statistics on seizures of counterfeit goods are unavailable.

Brunei transferred its Registry of Trademarks from the Attorney General’s Chambers (AGC) to the Brunei Intellectual Property Office in 2013. The transfer expanded the country’s Patents Registry Office’s (PRO) ability to accept applications for trademarks registration, in addition to patents and industrial designs.

In September 2013, Brunei acceded to the Geneva (1999) Act of the Hague Agreement Concerning the International Registration of Industrial Designs to protect IP from industrial designs, making it the second ASEAN Member country, following Singapore, to accede. The accession emphasized Brunei’s commitment under the ASEAN Intellectual Property Rights Action Plan 2011 – 2015. Brunei also plans and has publicly committed to acceding to other World Intellectual Property Organization’s (WIPO) treaties including the Madrid Protocol for the International Registration of Marks, the WIPO Performances and Phonograms Treaty

(WPPT), and the UPOV Convention 1991 for the protection of New Varieties of Plants (PV). In February 2016, Brunei signed the Trans-Pacific Partnership which includes new commitments to IPR.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at: http://www.wipo.int/directory/en/ 

Resources for Rights Holders

Contact at U.S. Mission:

Fausto DeGuzman
Political/Economic/Consular Officer
+673 238-4616 ext. 2172

Capital Markets and Portfolio Investment

In 2013, Brunei signed a Memorandum of Understanding (MOU) with the Securities

Commission Malaysia (SCM) to boost cooperation in the capital markets. The MOU was designed to strengthen collaboration in the development of fair and efficient capital markets in the two countries. It also provided a framework to facilitate greater cross-border capital market activities and cooperation in the areas of regulation as well as capacity building and human capital development, particularly in the area of Islamic capital markets. In 2015, Autoriti Monetari Brunei Darussalam (AMBD)–Brunei’s central bank–announced plans to launch a capital market in Brunei by 2017, if the preconditions required for launching a security exchange are met. The plans to open a domestic exchange are welcomed by the finance industry players though it may be difficult to identify the companies interested to be listed.

Money and Banking System

Brunei has a small banking sector which includes both conventional and Islamic banking. The Monetary Authority of Brunei Darussalam (AMBD) is the sole central authority for the banking sector, in addition to being the country’s central bank. Banks in the country have high levels of liquidity, good capital adequacy ratios and well-managed levels of non-performing loans. A handful of foreign banks have established operations in the country such as Standard Chartered and Bank of China (Hong Kong). In late 2016, HSBC announced that it will be down-sizing its operations in Brunei. All banks are under the supervision of AMBD, which has also established a credit bureau that centralizes information on an applicant’s credit worthiness.

The Brunei dollar (BND) is pegged to the Singapore dollar , and is accepted currency in the country.

Foreign Exchange and Remittances

Foreign Exchange

In June 2013, the Financial Action Task Force (FATF) announced that Brunei is no longer subject to FATF’s monitoring process under its global Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) compliance process. Brunei will work with the Asia-Pacific Group (APG) as it continues to address the full range of AML/CFT issues identified in its Mutual Evaluation Report. The report cited Brunei’s significant progress in improving its AML/CFT regime and noted that Brunei had established the legal and regulatory framework to meet its commitments in its Action Plan regarding the strategic deficiencies that the FATF identified in June 2011.

Remittance Policies

Remittance services are provided by local financial institutions including banks such as Bank Islam Brunei Darussalam (BIBD) and Standard Chartered Bank. AMBD, Brunei’s central bank, regulates and supervises these financial institutions that provide remittance services.

Sovereign Wealth Funds

The Brunei Investment Agency (BIA) manages Brunei’s General Reserve Fund and their external assets. Established in 1983, BIA’s assets are estimated to be USD 170 billion. BIA’s activities are not publicly disclosed and are ranked the lowest in transparency ratings by the Sovereign Wealth Fund Institute.

Brunei’s state-owned enterprises (SOEs) lead key sectors of the economy including oil and gas, telecommunications, transport, and energy generation and distribution. These enterprises also receive preferential treatment when tendering for lucrative government contracts. The government does not publish a list of SOEs, but prominent SOEs include:

Under the Telecommunications Order 2001, the Authority for Info-communications Technology Industry (AiTi) regulates the licensing of the telecommunications industry. The establishment, installation, maintenance, provision or operation of unlicensed telecommunication systems or services within Brunei is a punishable offense, resulting in imprisonment, and large fines. AiTi has not opened up the telecommunications industry to foreign participation. The telecommunications industry is dominated by government-linked companies Telekom Brunei (TelBru), Data Stream Technologies (DST) Communications, and Progresif Cellular. Telbru is the sole provider of fixed line telephone and internet services. DST, founded in 1995, and Progresif, which took over from failed telecom company B-Mobile in 2014 and is owned by a government investment fund, provides mobile phone and internet services.

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 and maintaining those acquired systems and equipment.

Brunei National Petroleum Sendirian Berhad (PB) is the national oil company owned by the Brunei government. The company was granted all the mineral rights in eight prime onshore and offshore petroleum blocks, totaling 20,552 sq. km. Currently, the company manages contractors, including Shell, Total, and Petronas, which are exploring the onshore and deep water offshore blocks.

Privatization Program

Brunei’s Ministry of Communication has made corporatization and privatization part of its Strategic Plans for 2008-2017, which calls for the Ministry to shift its role from a service provider to a regulatory body with policy-setting responsibilities. In that role, the Ministry will develop specific policies through corporatization and privatization; establish a regulatory framework and business facilitation. Currently, the Ministry is studying initiatives to privatize a number of state-owned agencies: the Maritime and Port Authority of Brunei Darussalam, the Postal Services Department, and Brunei International Airport management. These services are not yet completely privatized and there is no timeline for privatization, as the Ministry is still in the process of considering the initiative. Guidelines regarding the role of foreign investors and the bidding process are not yet available. The strategy can be found on the Ministry of Communication’s website .

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.

OECD Guidelines for Multinational Enterprises

Brunei does not adhere to the OECD guidelines for multinational enterprises. OECD’s guidelines for multinational enterprises can be found on the OECD website .

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.

The ACB strives to ensure a corruption-free public service. Corrupt practices are punishable under the Prevention of Corruption Act. The Act also applies to Brunei citizens abroad. There is the perception that corruption is more prevalent in the private sector than in the public sector. This has prompted the ACB to focus on the private sector, as the private sector plays a critical role in Brunei’s economic diversification. Brunei is a member of the International Association of Anti-Corruption Authorities.

In 2016, Brunei was ranked the 41st of 176 countries worldwide in Transparency International’s corruption perception index. No scores were recorded for 2014 and 2015, but the ranking is an improvement from its 2013 ranking.

U.S. companies do not generally identify corruption as an obstacle to conducting business in Brunei.

The level and extent of corruption in Brunei is relatively low. For example in June 2016, a police officer was found guilty of accepting a USD 30 bribe in exchange for not taking action over a driver’s alleged traffic offenses of not wearing a seatbelt and using a mobile phone while driving.

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: Dato Paduka Haji Mohammad Juanda bin Haji Abdul Rashid
Title: Director
Organization: Anti-Corruption Bureau Brunei Darussalam
Address: Old Airport Berakas, BB 3510 Brunei Darussalam
Tel: +673 238-3575
Fax: +673 238-3193
Email: info.bmr@acb.gov.bn

Brunei is an absolute monarch 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, Minister of Defense, and Minister of Foreign Affairs and Trade. 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 welfares and subsidies.

Brunei relies heavily on foreign labor in lower-skill and lower-paying positions, with approximately 6.9 percent of the labor force coming in from abroad to fulfill specific contracts. The largest percentage of those work in construction, followed by wholesale and retail trade, and then professional, technical, administrative and support services. Most unskilled laborers in Brunei are immigrants from Bangladesh, India, Indonesia, Malaysia, and the Philippines, and enter the country on renewable two-year contracts.

The skilled labor pool includes both foreign laborers 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. The 2014, the latest year for which there are available statistics, Labor Force Survey stated that approximately 43.5 percent of the total Brunei citizen workforce is employed in the public sector. In 2016, the Department of Labor under the Ministry of Home Affairs, introduced the improved Foreign Workers License process that with stricter policies in an effort to create more employment opportunities for Brunei citizens.

While Brunei 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 minimal activity in recent years. There are no other active unions or worker organizations.

Various domestic laws prohibit the employment of children under age 16. Parental consent and approval by the Labor Commission are required for those under age 18. Female workers under age 18 may not work at night or on offshore oil platforms. The Department of Labor, which is part of the Ministry of Home Affairs, effectively enforced 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, but most employed citizens receive good salaries. 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 from 2014, the latest data available, indicated approximately 86,500 foreigners lived in the country temporarily. Foreign workers receive a mandatory brief on labor rights from the Department of Labor when they sign their contract. The government also protects the rights of foreign workers through inspections of facilities and a telephone hotline for worker complaints. Immigration law allows prison sentences and caning for workers who overstay their work permits, for workers who fall into irregular status due to their employers’ negligence.

Overseas Private Investment Corporation (OPIC) programs are not available in Brunei given the country’s affluence.

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) 2016 $11.25 Billion 2015 $12.93 Billion http://data.worldbank.org/
Foreign Direct Investment Host Country Statistical source USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2015 $6.92 million 2015 $7.0 million BEA data available at http://bea.gov/international/direct_investment_
Host country’s FDI in the United States ($M USD, stock positions) 2015 N/A 2015 $9.0 million BEA data available at http://bea.gov/international/direct_investment_
Total inbound stock of FDI as % host GDP 2015 $170 million N/A N/A N/A

Brunei’s GDP data obtained from Brunei Darussalam Statistical Yearbook 2015. Data is not available for US-Brunei’s stock FDI positions.

Table 3: Sources and Destination of FDI

Department of Economic Planning and Development and IMF Coordinated Direct Investment Survey data are not available for Brunei’s stock FDI positions.

Table 4: Sources of Portfolio Investment

Department of Economic Planning and Development and IMF Coordinated Direct Investment Survey data are not available for Brunei’s sources of portfolio investment.

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

2017 Investment Climate Statements: Brunei
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