2023 Investment Climate Statements: Brunei

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 Ministry of Finance and Economy. The Brunei Economic Development Board, under the Ministry of Finance and Economy, is the government’s frontline agency that promotes and facilitates foreign investment into Brunei. BEDB is responsible for evaluating investment proposals, liaising with government agencies, and obtaining project approval from the government’s Foreign Direct Investment and Downstream Industry Committee.

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 reduced 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 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 residents of Brunei, but companies may request exceptions. The corporate income tax rate 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 and Economy. Foreign investors can fully own incorporated companies, foreign company branches, or representative offices, but not sole proprietorships or partnerships. Brunei does maintain its right to screen investment to ensure that foreign investments do not contradict and cause negative impact to the overall National Development Plan and to the national interest.

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

Other Investment Policy Reviews 

The World Trade Organization (WTO) Secretariat prepared a Trade Policy Review of Brunei  in December 2014 and a revision in February 2015.

Business Facilitation 

Darussalam Enterprise (DARe) is the government statutory body established to facilitate a conducive business environment. DARe provides business support services and advice on starting up or growing a business, which includes how toobtain permits, approvals, and licenses. Guidelines and information on government services for businesses can be found at this website .

Business registration can be done online at the Registry of Companies Business Names (ROCBN)  website.

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 and Economy. 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. Despite the limited availability of public information regarding the amount, the funds are generally viewed positively and managed well by BIA.

Transparency of the Regulatory System 

Brunei’s regulatory system has limited transparency, particularly in lawmaking processes and impact assessments. Each ministry is responsible for coordinating with the Attorney General’s Chambers to draft proposed legislation. Legislation does not receive broad review and little input is provided from outside of the originating ministry. The sultan has final authority to approve proposed legislation. Laws and regulations are readily accessible on the Attorney General’s Chambers website .

Brunei encourages environment, social, and governance (ESG) disclosure but does not mandate it.

International Regulatory Considerations 

Brunei is an active member of ASEAN, through which it 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 two parallel systems: one based on common law and the other based on Islamic law. The common law judicial system is presided over by the Supreme Court, which comprises the Court of Appeal and the High Court.

Recognizing the importance of protecting investors’ rights and contract enforcement, Brunei established a Commercial Court in 2016.

In 2014, Brunei implemented the first phase of its Sharia Penal Code (SPC), which expanded existing restrictions on minor offenses—such as eating during Ramadan—that are punishable by fines or imprisonment. On April 3, 2019, Brunei commenced full implementation of the SPC, introducing the possibility of harsher punishments such as stoning to death for rape, adultery, or sodomy, and execution for apostasy, contempt of the Prophet Muhammad, or insult of the Quran. However, these forms of punishment require higher standards of proof than the common-law-based penal code (for example, four pious men must personally witness an act of fornication to support a sharia-based harsh sentence), placing them under a de facto moratorium. The sultan confirmed the moratorium in a 2019 public statement.

Laws and Regulations on Foreign Direct Investment 

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The basic legislation on investment includes the Investment Incentive Order 2001 and the Income Tax (As Amended) Order 2001. Investment Order 2001 supports economic development in strategically important industrial and economic enterprises and, through the Ministry of Finance and Economy, offers investment incentives through a favorable tax regime. Although Brunei does not have a stock exchange, the government is reportedly planning to establish a securities market.

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 and Economy. Except for sole proprietorships and partnerships, foreign investors can fully own incorporated companies, foreign company branches, or representative offices. Foreign direct investments by multinational corporations do 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 .

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 materials; timber stores and furniture factories; and retail shops and workshops) from needing to obtain a business license.

Competition and Antitrust Laws 

Brunei’s Competition Order, published in 2015 to promote and maintain fair and healthy competition to enhance market efficiency and consumer welfare, entered into force on January 1, 2020. The sultan also announced the establishment of the Competition Commission in 2017 to oversee and act on competition issues that include adjudicating anti-competitive cases and imposing penalties on companies that violate the Competition Order.

Expropriation and Compensation 

Brunei is a signatory to the 1987 ASEAN Agreement for the Promotion and Protection of Investments. There is no history of expropriation of foreign owned property in Brunei, but there have been cases of domestically owned private property being expropriated for infrastructure development. The government provided compensation in such cases and claimants were afforded due process.

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 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention). Legislation related to dispute settlement is covered under Brunei’s Arbitration Order 2009.

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 through the judiciary website. 

International Commercial Arbitration and Foreign Courts 

In May 2016, Brunei’s Attorney General’s Chambers announced the establishment of the Brunei Darussalam Arbitration Center (BDAC). BDAC delivers services and administration for arbitration and mediation to fulfill 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 on its website .

Bankruptcy Regulations 

In 2012, amendments to Brunei’s Bankruptcy Act increased the minimum threshold for a creditor to present a bankruptcy petition against a debtor from BND 500 to BND 10,000 (USD 350 to USD 7,060) and enabled an appointed bankruptcy trustee to direct the Controller of Immigration to impound and retain the debtor’s passport, certificate of identity, or travel document to prevent the debtor from leaving the country. The amendment also requires the debtor to deliver all property under the debtor’s 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. Tax exemption may be available for pioneer industry companies. For non-pioneer enterprises, the tax relief period is eight years and up to 11 years for pioneer enterprises.

In 2015, the government reduced the corporate income tax rate in Brunei from 20 percent to 18.5 percent.

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.

Darussalam Assets is a private limited company established in December 2012 under the purview of the Ministry of Finance and Economy to spur the growth of government-linked companies (GLC) through active ownership and management of its GLC portfolio based on commercial principles, in line with Brunei’s 2035 development vision. More info on Darussalam Assets may be found at their website .

Foreign Trade Zones/Free Ports/Trade Facilitation 

In 2017, Brunei announced the creation of its first Free Trade Zone, Terunjing Industrial Park, a 235-acre site located between two main highways near Brunei International Airport and Muara Port.

Darussalam Enterprise (DARe), under the Ministry of Finance and Economy, works closely with other relevant government agencies to facilitate the implementation of investors’ projects. DARe oversees and manages 26 industrial parks across Brunei.

Performance and Data Localization Requirements  

The government of Brunei seeks to increase the number of Bruneians working in the private sector. Brunei’s Local Business Development Framework seeks to increase the use of local goods and services, train a domestic workforce, and develop Bruneian businesses by placing requirements on all companies operating in the oil and gas industry in Brunei to meet local hiring and contracting targets. These requirements also apply to information and communication technology firms that work on government projects. The Framework sets local content targets based on the difficulty of the project and the value of the contract, with more flexible local content requirements for projects requiring highly specialized technologies or with a high contract value.  In 2019, senior officials stated an intent to extend local hiring targets to additional sectors of the economy.

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 retail stores. The special approval cuts the waiting time for a quota from 21 days to seven.

Brunei has not announced any specific legislation pertaining to data storage and data localization requirements.

Real Property 

Mortgages are recognized and enforced in Brunei; however, only Bruneian citizens can own land property in Brunei indefinitely. Foreigners and permanent residents can only own properties for up to 99 years. Brunei’s Department of Economic Planning and Development does not publish FDI data for real estate. Each transfer of ownership in Brunei requires the approval of “His Majesty in Council” which is a council of officials representing the Sultan. This process can be lengthy and opaque.

Brunei is considering amending the Land Code are being considered to ban past practices of proxy land sales to foreigners and permanent residents using power of attorney and trust deeds. The amendments to the Land Code have eliminated the recognition of powers of attorney and trust deeds as mechanisms in land transactions involving non-citizens. 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 granted for renewable annual terms.

Intellectual Property Rights 

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 in recognition of its improving IPR protections, increasing enforcement, and efforts to educate the public about the importance of IPR.

Brunei finalized and adopted the Copyright (Amendment) Order 2013 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 offenses; adding new offenses; strengthening the enforcement powers of the Royal Brunei Police Force and the Ministry of Finance and Economy’s 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. Enforcement agencies are authorized to enter premises and arrest without warrant; to stop, search, and board vehicles; and 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 established the Brunei Intellectual Property Office (BruIPO) in 2013 under the Attorney General’s Chambers. The establishment of BruIPO 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 has also 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).

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/ 

Capital Markets and Portfolio Investment 

In March 2021, the Minister of Finance and Economy II renewed the ministry’s annual budget of USD 292 million to fund infrastructure, technology, and socio-economic studies related to the implementation of Brunei’s own stock exchange, which is expected to launch in the next few years.

In 2013, Brunei signed a Memorandum of Understanding (MOU) with the Securities
Commission Malaysia (SCM) 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 Islamic capital markets.

The capital market industry in Brunei is primarily governed by the Securities Markets Order, 2013 and the Securities Markets Regulations, 2015 which are both administered by Brunei Darussalam Central Bank. In addition, securities with any Shariah or Islamic component would be additionally governed by the Syariah Financial Supervisory Board Order, 2006.

Brunei has accepted the obligations under IMF Article VIII, Sections 2(a), 3 and 4, and maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions and multiple currency practices.

Money and Banking System 

Brunei has a small banking sector which includes both conventional and Islamic banking. The Brunei Darussalam Central Bank (BDCB) is the sole central authority for the banking sector, in addition to its role as the country’s central bank. Banks have high levels of liquidity, good capital adequacy ratios, and well-managed levels of non-performing loans. Several foreign banks such as Standard Chartered Bank and Bank of China (Hong Kong) have established operations in Brunei. In March 2018, HSBC officially ended its operations in Brunei after announcing its planned departure from Brunei in late 2016. All banks fall under the supervision of BDCB, which has also established a credit bureau that centralizes information on applicants’ credit worthiness.

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

Foreign Exchange and Remittances 

Foreign Exchange 

In June 2013, the Financial Action Task Force (FATF) announced that Brunei would no longer be subject to FATF’s monitoring process under its global Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) compliance process. Brunei’s Mutual Evaluation 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 strategic deficiencies that the FATF identified in June 2011.

Remittance Policies 

Any person or company providing services for the transmission of money must be licensed by the Brunei government. Only Brunei citizens may hold remittance licenses. Local financial institutions such as Bank Islam Brunei Darussalam (BIBD), Baiduri Bank and Standard Chartered Bank provide remittance services. Remittance companies require the customer’s full name, identification number, address, and purpose of the remittance. They are also required to file suspicious transaction reports with BDCB.

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 60-75 billion. BIA’s activities are not publicly disclosed and are ranked the lowest in transparency ratings by the Sovereign Wealth Fund Institute.

Privatization Program 

Brunei’s Ministry of Transportation and Info-Communication has made corporatization and privatization part of its strategic plan, which calls for the Ministry to shift its role from a service provider to a regulatory body with policy-setting responsibilities. The Ministry is studying initiatives to privatize a few state-owned agencies, including the Postal Services Department and public transportation services. These services are not yet completely privatized and there is no timeline for privatization. Guidelines regarding the role of foreign investors and the bidding process are not yet available.

Additional Resources  

Department of State

• Country Reports on Human Rights Practices ( https://www.state.gov/reports-bureau-of-democracy-human-rights-and-labor/country-reports-on-human-rights-practices/)
• Trafficking in Persons Report ( https://www.state.gov/trafficking-in-persons-report/)
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities ( https://www.state.gov/key-topics-bureau-of-democracy-human-rights-and-labor/due-diligence-guidance/)
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises ( https://www.state.gov/u-s-national-contact-point-for-the-oecd-guidelines-for-multinational-enterprises/)
• Xinjiang Supply Chain Business Advisory ( https://www.state.gov/xinjiang-supply-chain-business-advisory/)

Department of the Treasury

• OFAC Recent Actions ( https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions )

Department of Labor

• Findings on the Worst Forms of Child Labor Report ( https://www.dol.gov/agencies/ilab/resources/reports/child-labor/findings  )
• List of Goods Produced by Child Labor or Forced Labor ( https://www.dol.gov/agencies/ilab/reports/child-labor/list-of-goods )
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World ( https://www.dol.gov/general/apps/ilab )
• Comply Chain ( https://www.dol.gov/ilab/complychain/ )

Climate Issues 

Brunei recognizes its extreme dependence on finite fossil fuels is a vulnerability in the long-term. The sultanate has committed to ambitious economic diversification and climate change goals with solar power, electric vehicles, and industrial emissions reduction as key pillars. Despite challenges presented by the COVID-19 pandemic, Brunei is slow to build momentum on these fronts. Ultimately, the greatest test of Brunei’s clean energy policies will be whether they successfully foster a culture shift away from the oil and gas industry which fueled the country’s rise.

The Brunei National Climate Change Policy 2020 ( BNCCP ) outlines ten country strategies to combat climate change focusing on reducing industrial emissions, forest cover, electric vehicles, renewable energy, power management, carbon pricing, waste management, climate resilience and adaptation, carbon inventory and awareness and education. The climate change policy was developed after Brunei recorded the highest number of forest fires in 10 years and rising temperature. The policy aims to reduce Brunei’s greenhouse gas emissions to more than 50 percent by 2035.

• Solar Power: The sultanate aspires to increase its share of renewable energy (RE) to 30 percent of total capacity for power generation by 2035. Though it will continue to explore different RE options, Brunei plans to rely heavily on solar photovoltaics in the near term to meet this objective. The Ministry of Energy (MoE) pledged to build large-scale photovoltaic solar plants with 100 megawatts of capacity by 2025.
• Electric Vehicles: Brunei stood up an Electric Vehicles Joint Task Force (EVJTF) in early 2020 that aims to increase electric vehicle sales to 60 percent of total annual sales by 2035. The Bruneian government recognizes the need to facilitate the shift from heavily subsidized gasoline cars to EVs, and plans to offer duty exceptions, special license plates, lanes, and parking spaces as incentives; however, its pilot project has made little progress.
• Reducing Industrial Emissions: Fugitive emissions from oil and gas production account for 18.1 percent of the sultanate’s GHG emissions. The BNCCP seeks to reduce emissions to zero routine flaring and “As Low as Reasonably Practicable” standards. An Industrial Emissions Committee ensures key emitters from the oil and gas sector set targets that align with Brunei’s national goals. In 2021, Brunei introduced a mandatory carbon reporting requirement for “all facilities and agents that emit and absorb greenhouse gases.”

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