DOING BUSINESS IN BRUNEI IN 2023
Since 2003, Healy Consultants Group PLC 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.
|Compare different Brunei entities||Resident LLC||Free zone LLC||Brunei PLC||Branch||Representative office|
|Best use of company?||Local Trading||Manuf./Logistics||Holding/Trading||Agent/Trading||Marketing/Research|
|Legally tax exempt if properly structured?||No||Yes||No||No||Yes|
|Corporate bank account location?||HSBC Brunei||SCB Brunei||HSBC Brunei||Citibank Brunei||SCB Brunei|
|Client must travel to Brunei?||No||No||No||No||No|
|Can secure trade finance?||Yes||Yes||Yes||Yes||No|
|Limited liability entity?||Yes||Yes||Yes||No||No|
|VAT payable on sales to local customers?||No||No||No||No||N/A|
|Withholding tax on payments to overseas shareholders?||No||No||No||No||N/A|
|Average total engagement costs?||US$18,215||US$21,380||US$26,730||US$14,780||Contact us|
|Average total engagement period?||5 months||5 months||5 months||6 months||3.5 months|
|Accounting and tax considerations||Resident LLC||Free zone LLC||Brunei PLC||Branch||Representative office|
|Statutory corporation tax payable?||18.5%||0%||18.5%||18.5%||0%|
|Must file an annual tax return?||Yes||Yes||Yes||Yes||No|
|Effective corporation tax rate on net profits of US$250,000?||18.5%||0%||18.5%||18.5%||0%|
|Must file annual financial statements?||Yes||Yes||Yes||Yes||Yes|
|Investment income is legally tax exempt in Brunei?||No||Yes||No||No||Yes|
|Access to double taxation treaties?||Yes||Yes||Yes||Yes||No|
|Monthly GST reporting to the Government?||No||No||No||No||No|
|Legally tax exempt entity?||No||Yes||No||No||Yes|
|Dividends received are legally tax exempt?||Yes||Yes||Yes||Yes||N/A|
|Company registration||Resident LLC||Free zone LLC||Brunei PLC||Branch||Representative office|
|Resident director required?||Yes||Yes||Yes||Yes||Yes|
|Minimum number of shareholders/partners?||2||2||7||Parent company||Parent company|
|Minimum number of directors/managers?||2||1||2||1||1|
|Minimum paid up share capital?||US$1||US$1||US$1||N/A||N/A|
|Shelf companies available?||Yes||No||No||No||No|
|Time to incorporate a new entity?||3 months||3 months||3 months||3 months||3 months|
|Can easily convert to a local PLC company?||Yes||Yes||Yes||No||No|
|Can have preference shareholders?||Yes||Yes||Yes||No||No|
|Business considerations||Resident LLC||Free zone LLC||Brunei PLC||Branch||Representative office|
|Can invoice local customers?||Yes||Yes||Yes||Yes||No|
|Can hire local staff?||Yes||Yes||Yes||Yes||Yes|
|Can rent local office space?||Yes||Yes||Yes||Yes||Yes|
|Secures a residence visa for business owner?||Yes||Yes||Yes||Yes||Yes|
|Good entity for trademark registration?||Yes||Yes||Yes||Yes||No|
|Brunei has signed free trade agreements?||Yes|
|This country is a member of WIPO and TRIPS?||Yes|
|The country is a member of the ICSID?||Yes|
|Average customs duties suffered?||3.3|
|Government foreign investment approval is required?||No|
|Average monthly office rental? (US$ 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|
|Multi-currency bank accounts available?||Yes|
|Corporate visa debit cards available?||Yes|
|Quality of e-banking platform?||Good|
|Crowd funding available in this country?||Yes|
Brunei business setup summary
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Advantages of Brunei company registration
- Brunei has signed 18 agreements for the avoidance of double taxation. This implies a lessening of the tax burden from all the companies operating in Brunei that directly deal with these 18 countries.
- The country has a stable economy and currency, with the Brunei Dollar directly pegged to the Singapore Dollar;
- It offers several incentives for foreign investments, such as:
- Companies which are given a pioneer certificate will enjoy i) exemption of 30% of corporate tax for a period of up to 11 years, depending on the capital expenditure; ii) exemption of import taxes on certain products and raw materials, among other incentives;
- Companies which produce products or services for export are also eligible for exemption of income tax for up to 11 years;
- Tax exemption may also be granted for companies which acquire foreign loans for the purchase of production equipment.
- Brunei has an online portal for registration of companies making the incorporation process quick and easy. The first step is to obtain usual login credentials and the proposed company/ branch name should be validated. Thereafter, all statutory documents need to be submitted online. After payment, the application is reviewed and the applicant is notified by email. Moreover, templates of all statutory documents are easily available.
Disadvantages of Brunei company registration
- By the 24th December 2017, all Brunei IBCs as well as Brunei Offshore Companies were fully closed, as declared by the Brunei Registry. The Brunei government took this step in order to promote and protect the local businesses in Brunei. As a result, all the foreign investors had to shut down or sell their businesses, thereby reducing the foreign investor’s confidence and reliance over this jurisdiction.
- 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.
- Half of the Brunei Limited Liability Company (SDN BHD) directors must be resident Bruneian’s or Brunei permanent residents, while branches require a minimum of two resident representatives. If our Client does not have staff on the ground in Brunei, Healy Consultants Group PLC will supply your business with passive professional passive resident nominee director services.
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Useful links for Brunei
Government and public authority websites:
- Registrar of Companies
- Chamber of Commerce
- Central Bank of Brunei
- Investment Authority
- Ministry of Finance
- Brunei airport
- Visiting Brunei
- KPMG – Brunei Tax profile
- Business Opportunities in Brunei Darussalam
- Brunei Darussalam Structural Policy
- Economic Diversification in Negara Brunei Darussalam
- Brunei Darussalam Trade Summary
- IFC – Doing business in Brunei