Brunei company registration

Brunei company registration

DOING BUSINESS IN BRUNEI

Since 2003, Healy Consultants has assisted our Clients with business registration in Brunei. Our services include i) Brunei company incorporation ii) government license registration iii) business bank account opening iv) employee recruitment v) visa strategies and vi) office rental solutions.

SummaryTax exempt LLCResident LLC Free zone LLCBrunei PLC BranchRepresentative office
Best use of company?Intl HoldingLocal TradingManuf./LogisticsHolding/TradingAgent/TradingMarketing/Research
Legally tax exempt if properly structured?YesNoYesNoNoYes
Corporate bank account location?OCBC SingaporeHSBC BruneiSCB BruneiHSBC BruneiCitibank BruneiSCB Brunei
Client must travel to Brunei?NoNoNoNoNoNo
Can secure trade finance?YesYesYesYesYesNo
Limited liability entity?YesYesYesYesNoNo
GST/VAT payable on sales to local customers?NoNoNoNoNoNo
Withholding tax on payments to shareholders?NoNoNoNoNoN/A
Average total engagement costs?US$8,800US$10,960US$10,960US$17,130US$11,630Contact us
Average total engagement period?11 weeks21 weeks20 weeks21 weeks25 weeks14 weeks
Accounting and tax considerationsTax exempt LLCResident LLC Free zone LLCBrunei PLC BranchRepresentative office
Statutory corporation tax payable?0%18.5%Tax exemptions for upto 11 years18.5%18.5%0%
Must file an annual Brunei tax return?NoYesYesYesYesNo
Effective corporation tax rate on net profits of US$250,000?0%18.5%Tax exemptions for upto 11 years18.5%18.5%0%
Must file annual financial statements?NoYesYesYesYesYes
Investment income is legally tax exempt in Brunei?YesNoYesNoNoYes
Access to double taxation treaties?NoYesYesYesYesNo
Monthly GST reporting to the Government?NoNoNoNoNoNo
Legally tax exempt entity?YesNoTax exemptions for upto 11 yearsNoNoYes
Dividends received are legally tax exempt?N/AYesYesYesYesN/A
Company registrationTax exempt LLCResident LLC Free zone LLCBrunei PLC BranchRepresentative office
Resident director/partner/manager/secretary required?YesYesYesYesYesYes
Minimum number of shareholders\partners?1227Parent companyParent company
Minimum number of directors/managers?111211
Minimum paid up share capital?US$1US$1US$1US$1US$1US$1
Shelf companies available?YesYesNoNoNoNo
Time to incorporate a new entity?2 weeks12 weeks20 weeks12 weeks16 weeks14 weeks
Can easily convert to a local PLC company?NoYesYesYesNoNo
Can have preference shareholders?YesYesYesYesNoNo
Business considerationsTax exempt LLCResident LLC Free zone LLCBrunei PLC BranchRepresentative office
Can invoice local customers?NoYesYesYesYesNo
Can hire local staff?YesYesYesYesYesYes
Can rent local office space?YesYesYesYesYesYes
Secures a residence visa for business owner?NoYesYesYesYesYes
Good entity for trademark registration?YesYesYesYesYesNo
Other useful informationTax exempt LLCResident LLC Free zone LLCBrunei PLC BranchRepresentative office

Average monthly office rental? (US$ per sq m)60
Minimum statutory monthly salary?No legal minimum salary in Brunei
Average monthly US$ salary for local employees?2,780
Brunei dollar deposit interest rate? (1-year average)0.3%
US$ deposit interest rate? (1-year average)0.1%
Overseas remittance currency controls?No
Public register of shareholders and directors?No
Banking considerations
Multi-currency bank accounts available?Yes
Corporate visa debit cards available?Yes
Quality of e-banking platform?Good

Press the link headings below to read detailed, relevant, up to date information.

  • Advantages and disadvantages of a Brunei offshore company

    Advantages of Brunei offshore company registration

    1. A Brunei offshore company is easy to setup, because:
        Brunei business registration advantage

      • Healy Consultants can register a Brunei offshore company within two weeks, with just one director and one shareholder. The minimum share capital is US$1;
      • The offshore company can be wholly foreign owned, with no restriction on the nationality of shareholders and directors;
      • No resident director is required: our Clients will be able to manage their Brunei offshore company from abroad, while a resident company secretary will be responsible to maintain company records;
      • Global banks welcome Brunei companies for corporate bank account opening: Brunei Darussalam is not perceived as a high risk tax haven and has recently been de-blacklisted by several countries including i) France and ii) Canada.

    2. A Brunei offshore company enables our Clients to minimize taxation on their global earnings because:
      • The earnings of a Brunei offshore company are fully tax-exempt. Brunei offshore companies are not subject to i) corporate tax ii) capital gains tax iii) stamp duties and other direct taxes;
      • Our Clients will be able to easily repatriate their earnings outside Brunei, as earnings from offshore companies are exempted from withholding tax and the Sultanate does not implement any i) foreign exchange or ii) capital controls;
      • Owners of a Brunei offshore company will also never have to pay personal income tax on their earnings, as Brunei does not implement such tax on both residents and non-residents;
      • Our Clients using a Brunei offshore company to legally reduce taxation on their earnings will not suffer any financial penalties. Brunei has been removed from the OECD blacklist of tax havens, thanks to i) government efforts to counter money laundering and terrorist financing and ii) signature of new exchange of tax information treaties.

    3. Registering a Brunei offshore business is more confidential than doing so in traditional tax haven jurisdictions, because:
      • Brunei is a small Muslim Sultanate with little relations with Western countries. It is hence less likely to cooperate with them re exchange of information;
      • There is no public register of shareholders and directors maintained in Brunei, unlike Caribbean tax havens like the British Virgin Islands;
      • Bank secrecy in Brunei exceeds that of most other countries. Corporate bank account opening forms do not include clauses that allow the sharing of customer information. In fact, local regulations forbid the sharing of information and offenders guilty of sharing customer information are subject to up to 2 years of imprisonment and a US$100,000 fine;
      • A Brunei offshore business is not required to i) prepare annual financial statements nor ii) corporation tax return nor iii) undergo an annual audit;
      • The majority of traditional tax havens have signed approximately 15 to 20 tax information exchange agreements with other countries. By contrast, Brunei has signed with only nine countries, including i) France ii) Canada iii) Denmark iv) Finland v) Sweden and vi) Norway;
      • For all the reasons listed above, the Sultanate’s bank secrecy regulations are ranked as the 3rd most protective in the world after the Seychelles and Samoa, according to the Tax Justice Network;
      • Like the Marshall Islands offshore company, registration of a Brunei offshore company is a below the radar solution for our Clients’. It is not a common solution compared to traditional tax have countries. The majority of our Clients are attracted to this low profile jurisdiction.

    Disadvantages of Brunei offshore company registration

    1. Brunei is still perceived as a tax haven in some circles because:
      • While the Sultanate is not anymore on the black list of tax havens prepared by the OECD, Brunei-based companies continue to attract additional scrutiny from Western tax authorities and banks, but less than traditional tax haven countries;
      • While many countries including i) France and ii) Canada have recently removed Brunei from their list of tax havens, but others including i) Portugal and ii) Colombia have not done so yet. As a result, funds transfers from these countries to a Brunei company are still subject to higher withholding tax rates.

  • Advantages and disadvantages of a Brunei resident company

    Advantages of Brunei resident company registration

      company registration in Brunei - onshore and offshore
    1. Foreign entrepreneurs benefit from generous tax incentives aimed at diversifying Brunei’s economy outside of the oil and gas industry, including:

      • Brunei-based SMEs benefit from reduced corporate tax rates of i) 5% on their earnings of up to US$80,000 and ii) 10% on earnings between US$80,000 and US$200,000;
      • Brunei Darussalam does not levy value added tax (VAT) on services and goods sold in both Brunei and abroad;
      • Companies in the list of “pioneer industries” benefit from 100% corporate tax exemption of up to i) 5 years for investment projects over US$400,000 and ii) 8 years for projects over US$2 million;
      • Our Clients can also deduct from their income the expenses related to acquisition of production equipment, provided such expenses represent over US$800,000;
      • Brunei authorities also waive withholding tax for interest payments related to a loan to buy production equipment, provided that its principal amount represents over US$150,000;
      • Exporting companies engaged in agriculture, forestry and fishery activities benefit from corporate tax exemption for up to 8 years, provided over 20% of their sales are exported abroad. Companies exporting manufactured goods can also claim similar benefits, if their exports amount to over US$2.4 million;
      • Companies investing at least US$1.6 million in real estate and equipment related to the provision of warehousing services are exempted from corporate tax for up to 20 years;
      • For all the reasons listed above, all taxes paid by corporations average only 16% of their earnings in Brunei Darussalam, as compared to a 35% average in other Asia Pacific countries.

    2. Brunei is a good trade hub for entrepreneurs looking to tap into the Asian-Pacific markets because:
      • Companies registered in Brunei can export goods and services to most Asia-Pacific countries without paying customs duties, thanks to the Sultanate’s free trade agreements with i) other ASEAN countries ii) China iii) Japan iv) India v) Australia and vi) New Zealand;
      • Companies can trade overseas using the Pulau Muara Besar deep seawater port, which is also a free zone offering various tax advantages, excellent infrastructure and low cost warehousing space. Kindly refer to Healy Consultants’ Brunei Free Zone page for further information;
      • Electricity costs for industrial and commercial uses are heavily subsidized and recorded at only US$0.05 per KwH;
      • Brunei authorities easily allow employers to obtain work permits for their foreign workers. Employees of Malaysian and Singaporean citizenship are furthermore exempted from visa requirements.

    Disadvantages of Brunei onshore company registration

    1. Market opportunities are limited in Brunei. While Bruneians are affluent consumers boasting a purchasing power of US$42,000 per capita annually, the country hosts a small population of only 400,000;
    2. Our Clients find it difficult to start and run a resident business in Brunei because:
      • Half of the directors of a Brunei resident LLC must be resident in the country. If requested, Healy Consultants will be pleased to provide professional, passive nominee resident director services to our Clients;
      • All resident LLCs are required to obtain an operating license (rampaian) and it takes an average of two months for the government to approve an application;
      • All resident companies in Brunei also have to appoint an auditor. As a result, they have to submit audited annual financial statements to the Ministry of Finance’s Economic Planning Unit;
      • The Brunei administration is notoriously slow and all government procedures are tiresome to complete. For instance, registering real estate ownership in Brunei takes on average a full year.

    3. Hiring workers and HR management can prove difficult in Brunei because:
      • Due to the abundance of government jobs, Bruneians are particularly picky when looking for employment in the private sector and will not hesitate to quit their job if provided with a better opportunity with the government;
      • While the government makes it easy to hire foreign employees, employers are still financially responsible for their foreign employees’ behavior and have to a deposit a bond which will be forfeited in case of wrongdoing;
      • The Sultanate does not implement minimum wage regulation, but wages still average US$2,000 per month, a fairly high amount compared to the rest of Southeast Asia;
      • The company’s premises and employees’ dormitory (if any) may be inspected by a government health officer.

    4. Western expatriates find Brunei a difficult place to live because:
      • Because of i) implementation of Sharia Law ii) a complete ban on alcohol and iii) limited entertainment options, employers have a hard time convincing Western employees to relocate to Brunei;
      • It is boring to live in Brunei because i) there are twenty shopping centers and ii) the country is small iii) the number of westerners expats on the island is below 10,000 and iv) outdoor sports are limited and average temperature is 32 degrees with humidity of 70%;
      • While the government makes it easy to hire foreign employees, employers are still financially responsible for their foreign employees’ behavior and have to a deposit a bond which will be forfeited in case of wrongdoing;
      • Every time you need to leave the island, you can only fly to Singapore or Kuala Lumpur to get your connecting flight.

  • Why invest in Brunei Darussalam?

    1. Brunei is a stable and prosperous country that offers not only excellent infrastructure but also a strategic location within the Asean group of countries;
    2. No personal income tax is imposed in Brunei. Businesses are also not imposed sales tax, payroll, manufacturing tax, capital gains and export tax;
    3. The local market, while relatively small, is lucrative;
    4. The living conditions in Brunei Darussalam are among the best and most secure in the region;
    5. A Brunei private limited company provides access to the local market.

Company registration

  • Time to incorporate: Two weeks
  • Cost to set up: US$8,800
  • Minimum capital: US$1
  • Physical office required: No

Required appointments

  • Shareholders: 2
  • Directors: 1
  • Company secretary: No
  • Resident director: No

Key facts

  • Corporate tax rate: 20%
  • Corporate tax base: Territorial
  • Shelf companies: Available
  • Main company type: Offshore IBC

Contact us

For additional information on our company registration services in Brunei, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Karen Lee, directly:
client relationship officer - Karen