Understanding Brunei

Cultural intelligence is key to achieving sustainable business outcomes. Being able to read cultural clues and respond appropriately helps develop relationships, communicate effectively and build trust. While cultural and communication norms are changing as virtual modes of engagement increase, core cultural values remain an important factor in business. Not understanding the particularities of doing business in Brunei can lead to missed opportunities, delays and lost engagements.

Communication

Malay is the local language in Brunei while English is widely used in business communication.

People in Brunei place high importance to the role of honour, face and shame. Indirect communication can be used to preserve face, avoid embarrassment and maintain harmony.

The country’s hierarchical structure influences team dynamics, leadership styles and business conduct. Initial business interactions tend to be formal. Senior figures and women are greeted by a gentle bow.

Punctuality is highly valued and conveys respect. Dressing conservatively is the norm in business circles. A firm handshake is appropriate with members of the same sex. When greeting a Bruneian member of the opposite sex, it is best to shake hands only after they have offered a handshake – if a handshake is not offered, greet them with a smile and by placing one’s right hand on one’s chest. The use of both hands is preferred while exchanging business cards.

Business etiquette is important in Brunei as is in other countries. Recognising cultural differences, respecting core values, adhering to nuances in communication and conveying respect is vital to building sustainable business partnerships.

Navigating culture in business – the importance of core cultural values

Relationships

Investing time in building relationships is essential to deciding business outcomes. Building rapport is important and informal discussions on hobbies, family, food and culture precede business discussions. Initial meetings may not focus on direct business considerations in lieu of relationship building. 

Negotiations involve senior figures in organisations and can be lengthy. During negotiations, addressing senior authorities with appropriate honorifics is expected. Agreements once reached are documented to avoid misinterpretations.

With a Muslim majority, Islamic values influence business practices. Principles such as fairness and respect are highly desired. The sale of alcohol is prohibited in Brunei. It is an offense to consume any food or drink in public during the fasting hours of Ramadan. Holidays are observed during the Islamic New Year, the Prophet’s birthday, Hari Raya Puasa and Hari Raya Haji in addition to the other religious events. Businesses should remain considerate of the festivities and plan accordingly.

Hierarchy

In Brunei, decision-making is hierarchical. Discretionary powers reside with senior leaders and decisions are taken by them and then passed to subordinates.

Business discussions usually commence with senior figures speaking first. Active listening and allowing a pause for consideration is considered respectful. Showing respect for senior members is desirable, for example, by not interrupting them during discussions. Leaders also adopt a protective style by sheltering and guiding subordinates.

The importance of partnerships

Succeeding in Brunei’s business landscape requires a clear understanding of the market and stakeholders influencing the environment. Relying on the expertise and knowledge of local talent and partners can be beneficial in dealings with local businesses.

Building a partnership requires having relationships that can simplify introductions. A strong network of contacts is a starting point for productive partnerships. After identifying a potential partner, due diligence is essential. This involves an understanding of a company’s customers and clients, reach across Brunei, support for product localisation, and in-market reputation. It is vital to conduct reference checks and evaluate risks before beginning any local partnership.

The strength of a local partnership brings multiple benefits across phases of a commercial operation – from procurement and contracting to gaining credit. Importantly, a local partner can often assist with bureaucratic requirements, including company and product-specific registration processes. Building a long-term and sustainable partnership takes time and patience. The Australian High Commission in Brunei can help identify potential partners in Brunei (details can be found in Section 5.2).

Although Brunei offers opportunities for informed and well-prepared Australian businesses, doing business in any new market can involve a range of uncertainties. These should be identified and mitigated as much as practicable – and managed carefully once business operations are established.

Risk factors in Brunei

Economic – including the potential for government default (sovereign risk), fiscal, monetary risk and exchange rate risk.

Brunei’s dollar is interchangeable with the Singapore dollar, offering its small economy macroeconomic stability and minimising exchange rate fluctuations. However, any change in the monetary policy of Singapore will have direct implications for Brunei’s monetary system.

Brunei’s high reliance on the oil and gas sector makes it vulnerable to energy price volatility. Inflationary and fiscal pressures continue to challenge the economy. Government spending and household consumption are expected to remain firm. Although Brunei does not have specific credit ratings, its two major banks have been rated by Standard & Poor’s. Baiduri Bank has a rating of rating of A-/A-2, while BIBD has a rating of A-.

While the Brunei/Singapore dollar is stable, involvement of foreign currency always carries potential risks. Potential mitigations for foreign exchange risk include forward contracts, foreign currency options and utilising foreign bank accounts and loans to manage currency inflows and outflows. Seek advice on the level of currency risk and potential mitigations.

Political – including the potential for political instability and restrictive government policies.

Brunei is ruled by an absolute monarchy which currently enjoys widespread public support. While it isn’t always the case in monarchic systems, historically the Sultan has created an environment of policy stability. Political risk is likely to remain low, but businesses should remain informed about changes in political sentiment. With no credible opposition, there are limited instances of political instability and dissent. While restrictive, this does make Brunei’s business environment stable. Businesses should be aware that Brunei introduced harsh capital and corporal punishments under Sharia law into its penal code in 2019, although these have not been applied at the time of writing.

Consider performing political risk due diligence for any major investments and be mindful of the laws of the sultanate. For significant investments, political risk insurance may provide potential mitigation.

Corruption – including the potential for bribery, embezzlement and conflicts of interest.

The government of Brunei has low tolerance of corruption and has strengthened its anticorruption and conflict of interest frameworks in the last decade. The Anti-Corruption Bureau has prosecuted officials and imposed penalties in cases of alleged corruption. However, concerns remain over a lack of transparency and corruption at lower levels. Brunei ranks 31st on Transparency International’s 2025 International Corruption Index, with a score of 63 out of 100.

You should familiarise yourself with Australia’s foreign corruption and bribery legislation and ensure you have a robust anti-corruption strategy.

Regulatory – including the potential for regulations that increase the cost of doing business, reduce the attractiveness of an investment or change the competitive landscape.

With scores higher than the global average on Heritage Freedom’s International Index 2023 in business freedom, labour freedom and monetary freedom, Brunei is moderately free. A high degree of market openness facilitates trade and investment. Strong property rights, taxation structures and favourable regulatory policies foster an open business environment.

A trusted local partner can help you understand, navigate and secure complex regulatory processes.

Intellectual property (IP) – including the potential for weak or underdeveloped IP protections and enforcement mechanisms.

Brunei’s framework to protect Intellectual Property (IP) rights is strong but requires further development. Penalties for IP violations and their enforcement have been strengthened; however, concerns remain over the conduct of trade in counterfeit goods and lack of transparency in this area. The 2025 Global Innovation Policy Centre’s International IP Index scored Brunei 40th out of 55 countries.

Registration for patents, trademarks and copyrights can help mitigate IP risk. Continual product development and brand updates can deter counterfeiting. Technology solutions such as RFID tags and QR codes to authenticate products can add an extra layer of protection.

Geopolitical – including the potential for trade relationships, security partnerships and territorial disputes to impact business activities.

As a small nation on the coastline of the South China Sea, Brunei balances its relationships with claimants in this contested region carefully. Territorial disputes with Malaysia have largely settled. Brunei has a “friends to all” foreign policy and seeks to maintain favourable bilateral and trade relations with other nations. Defence and geopolitical issues are largely resolved by strategic engagement with member nations at regional forums.

Boards and leadership teams should familiarise themselves with geopolitical issues that may impact a business and, if relevant, develop plans in response to potential scenarios. Companies may also wish to seek external advice.

Supply chain – including the quality of infrastructure, levels of corruption, corporate governance, supply chain visibility and timeliness.

Supply chain risk in Brunei is somewhat high due to infrastructure quality, the availability and efficiency of logistical services and constraints in connections to global value chains. Brunei ranks 88th out of 130 countries in logistics on FM’s Global Resilience Index 2025.

Potential mitigations include supplier diversification, holding additional inventory, and implementing new operating models and processes. Technology is also providing improved analytics, sensors and automation.

Climate – including the potential for extreme weather events and rising sea levels to impact trade routes, supply chains and infrastructure.

With rising temperatures and weather fluctuations, Brunei remains vulnerable to loss of forest cover, flooding and landslides, food security challenges and threat to public health arising from resurgence in diseases. Landslides and floods are common, damaging infrastructure, disrupting logistical networks and adversely affecting supply chains.

In response, the government has implemented policies to strengthen climate resilience by increasing awareness, reducing emissions, adopting electric vehicles and increasing the country’s carbon sink.

Identifying and mitigating climate change risks should be embedded in all elements of a company’s strategy and operating model.

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