BRUNAI

Brunai

Basic InformationSize

Climate 5,765 sqCapital Bandar Sari Begawan

Political Structure Constitutional SultaneLeader Sultan and Prime minister Hassanl Bolkiah

Official languages Malay, English and ChineseOther Languages Hindi

Population 388.000Age breakdown 0-14 (27%), 15-64 (70,1%), 65 up (3,3%)Major religion Islam (67%)

Other Buddhism (13%), Christianity (10%)Industries Crude oil, natural gas, construction

GDP 15 Billion GDP per capita 53,100

Brunei• Oil rich country• Second smallest country in ASEAN after Singapore (by land area)• Smallest by population• Half of the area is forested• Urban rate is 74 %• Member of ASEAN 1984• Member of TPP 2015

continue• Independence from Britain 1984• Most stable legal, political and economic system• Relatively high standard of living• One of the highest Gross domestic product (GDP) in the world• No income tax• Free health care• Free education• Low interest loans• Free trip to Mecca

Political system• Constitutional Sultane• Same family control country over 400 year• Philosophy of politics: Malay, Islam, Monarchy• Parliament with 15 members (constitution in 2004) how ever not

election hold yet.• Sultan appoints ministers and deputy miniters• Sultan Prime minister, finance minister and defeence• In practically sultam have all powers

Economy• Brunei have stable economy • Strong central government influence• Free market economy• Government have big role in commercial activities• Example Brunei Shell Petroleum government have 50% share• GDP growth is stable (as inflation is under the control)

Foreign Trade Indicators

Foreign Trade indicators (Million USD)

2009 2010 2011 2012 2013

Import of goods 2,454 2,459 2,943 3,572 3,580 Export of goods 7,203 8,907 12,440 12,982 11,620 Import of services 1,215 1,366 1,546 --- --- Export of services 915 1,054 1,209 --- ---

Economy continue• Thirds largest oil producer in south East Asia• Ninth largest exporter in liquefied natural gas in he world• In long term Brunei must to concern new recourses (oil 25 year and

gas 40 year reserves)• Service sector count only 25% of GDP (relatively low level in rich

country)• Other industry than energy, account only 2 % of GDP• Export to Japan, China and United states

Economy continue• Imported machinery, transport equipment and manufactured goods

From ASEAN, United States, China and Japan ( high value add(• Despite simple structure of industry it is fiscally strong and has no debt• Three main importers are (low value add Malaysia, Singapore, ASEAN)• Most fastest growth industries outside the energy sector are • Man-made filaments (carbond fibers)• Base metal• Fish• Crustaceans (fish food)

Opportunities • Every effort is being made to enlarge the nonenergy sector• Expected to stimulate growth coming years• Currently Brunei has been taking steps to diversify its economy• It also attempting to develop offshore financial industry, including

Islamic banking system. (compare Malaysia)• Diversification is also being achieved by focusing ecotourism• Country have large amounts of untouched rainforests

Opportunities • In agriculture Brunei continues to develop key crops as rice, banana and

pineapple (Compare Thailand, Vietnam, Malaysia)• Government holding company (Semuan Holding) has interest • Poultry industry• food processing industries, • computer hardware development• Electronics• Biotechnology• Tourism• Information and communication technology

Economy continue• The world trade Organization (WTO) mention and find that • Government continues to hold monopolies• Dominating domestic manufacturing• Zero tolerance against corruption• Financial dealings by the royal family (remain confidential)• Brunei is ranked 96 out 183 World Banks survey on ease of doing business

(2010)• The Sultanate has fared well in recent international appraisals of its business

climate, rising to 79th in the World Bank’s Doing Business 2013 survey.• The country has strong need to diversify its economy

FDI and Brunei• The government in Brunei Darussalam is moving to speed up business

processes and improve communication between the public and the private sectors amid calls for the introduction of measures to boost foreign direct investment (FDI).

• Foreign direct investment (FDI) and trade in Brunei Darussalam are expected to increase under the recently agreed Trans-Pacific Partnership (TPP) deal, dovetailing with the Sultanate’s efforts to diversify its economy

Brunei Darussalam: Foreign investment• The reduced size of the domestic market discourages FDI in Brunei, despite

the advantages offered by the Sultanate (too small, economics of scale)• tax incentives and customs duties exemptions on certain sectors, especially

non-oil investments; freedom of investment in all sectors, with the exception of certain fields in which local participation is required• Since 2011, FDI inflows have been growing considerably• BUT….• the World Bank (2015 Doing Business ranking), Brunei ranked 101st out of

189 in terms of its business climate, which means a significant decline.

FDI continue• APEC Business Advisory Council (ABAC) published in 2013 gave a

mixed judgement in terms of the country's business climate in several domains (citing the absence of a Special Economic Zone, bureaucratic problems for investors, etc.). In order to increase transparency and strengthen corporate governance• the Company Act was amended in January 2015. The new version

aims to simplify the business climate. The corporate tax rate also decreased in 2015 and is now the second lowest among the ASEAN countries (18.5%).

FDI Continue Country Comparison For the Protection of Investors

Brunei Darussalam East Asia & Pacific United States Germany

Index of Transaction Transparency 4.0 5.0 7.0 5.0

Index of Manager’s Responsibility 2.0 5.0 9.0 5.0

Index of Shareholders’ Power 8.0 6.0 9.0 5.0

Index of Investor Protection 4.7 5.4 8.3 5.0

FDI continueForeign Direct Investment 2012 2013 2014

FDI Inward Flow (million USD) 865 776 568

FDI Stock (million USD) 5,661.6 6,250.7 6,218.9Number of Greenfield Investments 2.0 2.0 4.0

FDI Inwards (in % of GFCF) 37.5 31.4 24.2

FDI Stock (in % of GDP) 33.4 38.8 41.2

Tax rateNo consumption tax. No VAT Company Tax 18.5%

Withholding Taxes Interests: 15%; Royalties: 10%; Dividends: 0%

Social Security Contributions Paid By Employers