Business practicalities in Brunei

Land and property rights

In Brunei, indefinite land ownership is restricted to Bruneian citizens, while permanent residents and foreigners can enter leaseholds capped at 30 years (industrial/shophouse) and 60 years (residential/ commercial). The process of transfer of ownership in Brunei is lengthy, opaque and requires the approval of the Sultan’s councils.

Mortgages are recognised in the country. Foreigners considering investments in Brunei should consider partnering with a local business or individual to overcome the hurdles associated with land ownership. Partnering with a local business or individual allows a better understanding of the market and provides a better network. Temporary occupation permits are granted by the government for usage of land for agricultural, housing, commercial and industrial purposes. These licenses are granted for a year and have terms and conditions for renewal.

To ensure compliance and mitigate risks, Australian investors must perform thorough due diligence before considering land occupation permits in Brunei.

Cyber security 

Cyber Security Brunei is the agency responsible for monitoring and addressing cyber security threats and cybercrime. The Brunei National Cybersecurity Framework is a set of guidelines for organisations to protect against cybersecurity threats. The Cybersecurity Act establishes the framework for regulating cybersecurity in the country. The Code of Practice for Critical Information Infrastructure (CII) is designed to protect national assets from cyber threats. Businesses operating in Brunei must be mindful and ensure compliance with the country’s cybersecurity standards.

Intellectual property (IP)

Brunei is party to several international intellectual property (IP) treaties, namely TRIPS agreement, Berne Convention, Budapest Treaty, Hague Agreement, WIPO, Madrid Agreement, WIPO Copyright Treaty, Patent Cooperation Treaty, and WIPO Performances and Phonograms Treaty. The Brunei Darussalam Intellectual Property Office (BruIPO) was established to create an effective intellectual property framework for the economy. Registration of IP is done by the BruIPO.

IP is protected in Brunei with international registration systems for patents and designs. Over the past decade, amendments have imposed stringent penalties on IP violations. New offenses have been added and agencies responsible for overseeing IP infringements have been empowered. The lack of data around counterfeit goods trade remains a concern. The country’s intellectual property rights (IPR) framework is still under development, requiring further measures to protect IP and increase investor confidence.

Violation of IP and enforcement options:

Brunei has a basic framework for the protection of IPR which the country continues to develop. IPR infringements in Brunei are resolved through either civil or criminal litigation. Private settlements involving legal professionals are considered a viable measure. When infringement is on a commercial scale and involves dangerous goods, a criminal litigation is considered a cost-effective remedy.

For businesses involved in trading activities, written notice to Brunei’s controller of customs must be provided by the owner of trademarks to protect goods vulnerable to infringement. Counterfeit goods can be blocked by the customs department.

Import duties and tariffs 

Brunei has been a WTO member since 1995 and a member of GATT since 1993. The country imposes generally low tariff levels. The country’s customs legislation is aligned with WTO agreements to facilitate IPR protection and to streamline appeal procedures.

All dutiable goods entering the country are subject to customs import and excise duties. Preferential tariff treatment may be given to importers at the discretion of the Ministry of Foreign Affairs. Import duties are imposed on the basis of a tax rate proportionate to the value of goods, although a few items are taxed at a fixed rate.

The import of all goods entering Brunei is monitored by the Royal Customs and Excise Department. Importers are required to register with the port of entry. The customs and excise department requires additional documents including approval permits, import licenses, certificate of origin and other documents.

In 2017, the Customs Import and Export Duty Order was passed to facilitate trade, encourage FDI and fulfil commitments under Free Trade Agreements. The measures included reducing import and excise duties on heavy machinery, heavy vehicles, industrial machinery and spare parts, increasing excise on plastic, taxing high-sugar foods and applying a 5 per cent tax increase on luxury items such as video games, leather products and mobile phones.

Australia and Brunei share a mutual interest in open and free trade. The two countries are party to the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), and the Regional Comprehensive Economic Partnership (RCEP). Additionally, they are parties to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and founding members of the Indo-Pacific Economic Framework (IPEF).

Under the AANZFTA, customs duties on goods originating from either country will be progressively reduced or eliminated as per the schedule of tariffs. The agreement ensures the implementation of WTO and GATT obligations to facilitate ease of trade.

Calculations and payments 

Brunei follows the WTO Valuation agreement on imported goods. The import duty is calculated by multiplying the imported goods’ dutiable value by the corresponding import duty rate. The dutiable value of imported goods is typically based on the cost, insurance and freight level under the International Commercial Terms.

Other taxes and charges

There is no Value Added Tax in Brunei. Goods entering the country for personal use such as perfume and alcoholic beverages may be subject to restrictions as to their quantity, place of usage and sale.

Export duties

Brunei has not imposed duties on exported goods since 1973. All goods exported should be declared to the RCED with a declaration form describing details such as description of good, weight, value, measure, quantity, number and country of origin of goods.

Import and export regulations

Businesses engaged in imports, exports or movement of goods into and from Brunei must be registered with the RCED. They may also appoint a customs agent or forwarder who is registered with the RCED. It is advisable that the services of customs agents are sought.

Brunei prohibits the import and export of certain goods. Restrictions exist on the import of poisonous drugs, animals, converted timber, used vehicles, radioactive material and alcohol among others. Export of kerosene, cigarettes, sugar, diesoline and gasoline are prohibited.

Brunei adheres to conservative Islamic social values and the sale of alcohol, cigarettes and products related to gambling are prohibited in Brunei.

All exports and imports must be declared to the RCED with details of products and the quantity and types of products on a customs declaration form. The customs declaration form must be supported by documents including an invoice or purchase bill, freight and insurance payment slips, packing list and delivery order or airway bill.

The Revenue Division under the Ministry of Finance and Economy is responsible for tax administration. Brunei has a liberal tax structure with tax exemptions on personal income, sales, exports, capital gains, manufacturing and payroll. Additionally, various types of tax incentives are given for the expansion of established enterprise, foreign loans for equipment and to pioneer status companies.

This section provides an overview of the primary taxes that Australian businesses can expect to face when doing business in, or exporting to, Brunei. Professional advice from firms operating in Brunei is vital for understanding tax rules specific to a business. Not all applicable taxes are covered in this guide, and the information provided is of a general nature.

Table 1: Overview of Brunei’s taxes for businesses

Corporate Income Tax (CIT)

Businesses regardless of their incorporation locally or overseas are subject to corporate income tax (CIT). Tax is payable on income accrued in, received or derived from Brunei. Branches of foreign companies are taxed subject to their profits on the same rate as corporations.

The rate of CIT is 18.5 per cent for resident and non-resident companies in the non-petroleum sector.

Companies engaged in petroleum pay a tax rate of 55 per cent. For non-petroleum companies, the first AUD 113,107.50 (BND 100,000) of chargeable income is taxed at one-quarter of the tax rate while the next AUD 169,661.20 (BND 150,000) is charged at half of the applicable CIT rate. This exemption applies for a company’s first three years of tax assessment. Companies recording a turnover of over AUD 1.13 million (BND 1 million) are exempt from paying the CIT. Certain companies considered vital for the economic development of the country are exempt from paying CIT.

Brunei has signed double taxation avoidance agreements with several countries including Australia. These treaties eliminate double taxation by identifying exemptions and reducing the burden of taxes while operating in Brunei and Australia.

Personal income tax 

There is no personal income tax on residents or non-residents in Brunei.

Indirect taxes

There is no Value Added Tax (VAT) or sales tax imposed on businesses in Brunei.

• Stamp duty: Stamp duties are charged on various business documents at a fixed rate or a rate in proportion to the value of goods or transaction.
• Property taxes: Buildings located in the country’s capital Bandar Seri Begawan attract a tax of 12 per cent. No taxes are levied on buildings located elsewhere in the country.
• Estate duty: Estate taxes are not applicable in Brunei.

Auditing and accountancy play a vital role in enhancing transparency and accountability in a business, especially one engaged in a foreign market. It increases business performance by identifying risks and highlighting areas for improvement.

Accounting standard

Local and foreign businesses are required to adhere to the Brunei Darussalam Accounting Standards Council (BDASC). The BDASC is tasked with issuing accounting standards applicable to companies and other incorporated entities in the country. Brunei adopts two types of accounting standards. Public interest entities are required to follow the IFRS principles. Non-public interest entities follow the Brunei Darussalam Accounting Standards. To ensure transparency of financial statements prepared by non-public interest entities, the BDASC implemented the Brunei Darussalam Accounting Standards.

Statutory audits

Public companies or companies limited by guarantee must audit their accounts and file them with the ROCBN. A company limited by shares with less than 50 shareholders is required to audit its accounts but not obligated to submit or file them with the ROCBN. Companies must file their annual returns with the ROCBN within 28 days of the Annual General Meeting (AGM).

Companies must appoint an auditor and ensure the audit of accounts. Auditors must be appointed at each AGM. If an auditor is not appointed, the court may appoint an auditor subject to an application made by any member. Audited accounts are to be submitted to the Collector of Income Tax with records of income tax returns.

Books and records

Companies are required to maintain proper books of accounts detailing sums of money spent and received, sales and purchases, and assets and liabilities. Typically, books and records of companies in Brunei are kept in US dollars, although there is no legal requirement. Books of accounts are to be maintained for a period of at least 5 years from the end of each financial year. The Brunei Government’s fiscal year is considered for a period of 12 months starting from 1 April to the following 31 March.

Annual General Meetings

Companies are required to conduct an initial AGM within 18 months of incorporation. Subsequently, AGMs are to be held once in a calendar year with a gap of not more than 15 months between successive AGMs. Dormant companies must also hold AGMs and file annual returns. Businesses that fail to hold an AGM can be fined AUD 7,625 (BND 6,741) for the company and every officer guilty of default.

Quality control

The Public Accountants Oversight Committee (PAOC) is responsible for regulating accountants and establishing ethical requirements for accounting in Brunei. From 2022, International Auditing and Assurance Standards Board (IAASB)’s previous standards were replaced by International Standard on Quality Management 1 (ISQM 1), International Standard on Quality Management 2 (ISQM 2) and International Standards on Auditing 220 (Revised). The new standards are aimed at strengthening and improving the robustness of the quality reviews.

Doing business in Brunei will often require employing local and foreign workers. Understanding Brunei’s labour market regulations, recruitment methods and country-specific management styles are crucial to building and supporting an effective team.

Labour market

Skill level: Brunei has a notably small, but relatively young and incrementally growing population. Literacy levels are high at 96 per cent and labour force participation was 67.4 per cent in 2024. The country enjoys high levels of productivity relative to other countries in the Asia Pacific, but at a lower rate than higher income countries.

Unemployment has remained low in Brunei. In 2024 it was 4.7 per cent . In Brunei, the private sector is the biggest source of employment for both local and foreign workers. The largest employer is the services sector which accounted for 79 per cent of employees in 2024.

Employment contracts: Brunei’s Employment Order 2009 governs employment terms and conditions in the country. There are three typical types of employment in Brunei: contract of service (COS), fixed contract and part time contract.

Minimum wage: Brunei’s Employment Order 2023 sets out minimum wage requirements in a phased manner. The banking, finance and information and communications technology (ICT) sectors are included in the first phase of its application with minimum wages of AUD 565.5 (BND 500) per month for full-time employees and AUD 2.9 (BND 2.6) per hour for part-time workers. The minimum wage policy extends to local and foreign workers in all private companies engaged in a full-time or part-time arrangement. Employees working in the government sector, foreign workers on a professional visit visa, or special authorisation work pass holders are exempt from the minimum wage policy.

Human resources and employment law: Several laws govern employment in Brunei – The Employment Order, Workmen’s Compensation Act, Workplace Safety and Health Order, Employment Agencies Order and Employment Information Act. The Employment Order is the main labour law governing all terms and conditions connected with employment under a contract with the employer. The regulation lays out employment details including conditions of poor performance, redundancy, gross misconduct, grounds for dismissal and contract expiry.

Working hours: A standard working week consists of 44 hours in Brunei with 8-hour shifts per day. Non-shift workers are not permitted to work more than 12 hours a day under any circumstances.

Public and private sector employees tend to work a five-day week in Brunei from Monday to Thursday as well as Saturday. Some private sector organisations work Monday to Friday. Banks, businesses, retailers and food and beverage outlets are closed between 12pm until 2pm on Fridays to observe the traditional Friday prayer time for Muslims.

Holidays: Employees are entitled to one rest day every week and 11 public holidays each year. Paid annual leave granted to employees varies by years of service.

Overtime: If an employee is required to work more than their contracted hours, they must be paid an overtime rate of 1.5 times their hourly basic pay. An employee is permitted to work up to 72 hours of overtime in a month and the labour commissioner may grant approval on reaching this limit. Payment for overtime is to be made within 14 days of salary disbursal. Failure to pay overtime can lead to fines and imprisonment. Overtime rates use the following formula:

Sick leave: Employees are eligible for 14 days outpatient sick leave annually and 60 days hospitalisation leave (inclusive of the outpatient sick leave) subject to the fulfilment of certain conditions.

Social, health and unemployment insurance contributions: All citizens and permanent residents are required to contribute to the state managed provident fund scheme, Tabung Amanah Pekerja (TAP). All employees under 55 years of age must contribute 5 per cent of their basic salary to the TAP scheme. Mandatory retirement contributions apply only to citizens and permanent residents. With effect from July 2023, the Employee Trust Fund (TAP) and the Supplemental Contributory Pension (SCP) schemes were consolidated into the Skim Persaraan Kebangsaan (SPK). Under SPK, employees contribute a total of 8.5 per cent of their basic salary. Employer contributions are progressive and range from a fixed BND 57.50 to 10.5 per cent, depending on the employee’s salary level. Foreign employees are not required to participate in the scheme.

Employers must also contribute the same amounts for their employees to the provident fund.

Ending employment: An employment contract may be terminated when the work has been completed or the contract has reached expiry. Parties to an agreement may also end the contract by serving appropriate notice or in the case of a breach. Notice periods vary. If not otherwise specified, the following notice periods shall apply:

Severance pay: Severance pay is not mandatory in Brunei. However, an employee is entitled to receive severance pay in the case of redundancy or breach of contract by the employer.

Recruiting staff

Online advertising: Online job advertisements are an effective way to access talent. Many employers recruit online to increase the likelihood of getting skilled workers. The following websites are effective for recruitment:

• Brunei Work: A job portal connecting employees and employers across locations and sectors.
• Job Centre Brunei: A recruitment service provider.
• BruRecruit: A recruitment platform connecting businesses with professionals.

Executive search and recruitment: Executive search firms can provide tailored searches for more senior roles. Firms such as Atlantic Research, Airswift, Keller Executive Search and JB Hired offer services in Brunei.

Work permits: Employers intending to hire foreign workers must get a valid Employment Visa authorised by the Department of Immigration and National Registration, issued at the High Commission. Malaysians and Singaporeans are exempt from an employment visa.

Table 2: Different types of work visas in Brunei

Foreign companies establishing a commercial presence in Brunei will need a local bank account to conduct business. Brunei has a dual banking system comprising Islamic banks and conventional banks and financial companies.

The Brunei Darussalam Central Bank (BDCB) is the country’s monetary authority. As well as maintaining monetary stability, the BDCB supervises financial institutions and manages currency. The Ministry of Finance and Economy supervises the Department of Financial Services and the Brunei Investment Agency.

Table 3: Financial institutions in Brunei

Australian banks in Brunei:

Currently, Australian banks do not have a presence in Brunei.

Foreign exchange controls

Under the Currency Interchangeability Agreement, the Brunei Dollar is interchangeable with and pegged to the Singapore Dollar. Banks and vendors in Singapore accept the Brunei Dollar as legal tender and exchange it without levying additional charges and vice versa. The relatively stable Singapore dollar protects Brunei from exchange rate fluctuations. There is no restriction on foreign exchange.

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