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Brunei

Brunei Darussalam strives to become a business-friendly centre in the region for companies to embark on their business growth. It also provides a platform for foreign companies to expand their operations in, from and through Brunei outward to other countries, particularly in the South-east Asian region.   The FAQs within this page will consider some of the most commonly asked questions in relation to the Brunei private limited company and foreign branch registration processes and their compliance requirements under the laws. The questions are grouped by general areas to make your search easier and some of the answers can be cross-referenced with other information from the linked websites provided.   In brief, a private limited company (or known as Sdn Bhd company) and a foreign branch registered in Brunei Darussalam are governed by the Companies Act (CAP. 39) and they are supervised by the Registrar of Companies (“ROCBN”), at the Ministry of Finance and Economy (“MOFE”). ​ Whereas a Brunei foreign branch is a registered legal entity and it is treated as an extension of its parent company. Foreign branch can carry on any type of business activity that falls within the scope of its parent company. It may repatriate its profits and capital to its parent company with little or no restrictions. Foreign branch will only be taxed for the earnings derived from its operations in Brunei. The main advantage is that it lets the foreign branch to contract under its own name and leverage on its brand name and existing reputation.   Certain restrictions or disadvantages may hinder the use of a foreign branch due to the notion that it is not a separate legal entity from its parent company. Thus, the parent company is held liable for any obligations or debts incurred by its foreign branch due to the lack of limited liability. Foreign branch cannot freely carry on activities which its parent company is not allowed to.

A quick look at Brunei Darussalam

Brunei is strategically located in the heart of South-east Asia and the country is flanked by premier financial services centres such as Hong Kong, Singapore and Kuala Lumpur. Being a former British protectorate, Brunei’s judiciary system is based on the English Common Law, thus making it a familiar turf for global players. The sultanate has always been known as one of the wealthiest nations due to its vast hydrocarbon resources. With a population stands at around 415,000, its people enjoy a standard of living that is among the highest in the world in terms of per capita GDP.

In recent years, increased emphasis has been placed for economic diversification and the government is focused on making the most of ASEAN’s recent surge in growth by attracting foreign direct investment. Brunei enjoys one of the most liberal tax regimes in the region. Attractive incentives in the form of tax exemption between 5 and 20 years are available for investor for pioneer industries in the form of corporate tax relief, exemption from import duties tax, machinery, equipment and adjustments of capital allowances and losses.

General Information

Time Zone: GMT +8 hours Geography: Situated on the north-western coast of Borneo, with a total area of 5,765 sq. km, borders the Malaysian state of Sarawak and the South China Sea ​Capital City and Business Centre: Bandar Seri Begawan ​Accessibility: Most South-east Asian key regional cities, as well as Hong Kong, Shanghai, Dubai and London Language: Malay language (official). English is widely spoken and the language of business Government: Constitutional sultanate (Malay Islamic Monarchy as guiding principle) ​Legal System: Based on English common law with a parallel Shariah law ​Exchange Control: No Currency: Brunei Dollar (B$) at par with Singapore SGD Economic Activities: Dominated by oil and gas industry, SMEs are well flourishing, ICT and tourism sectors are developing Tax Treaties: ADTAs with the UK, Indonesia, China, Singapore, Vietnam, Bahrain, Oman, Japan, Pakistan, Malaysia, Laos, HK SAR, Kuwait, Qatar, UAE, South Korea, Luxembourg and Cambodia ​Banking: Good with the presence of regional and local banks TIEAs: with Australia, Canada, India and the Nordic Countries ​AEOIs: Yes Other Service Providers: Small but mature with presence of long established legal and accounting firms ​Important Features of Sendirian Berhad Company (Private Limited Company) ​Legislation: Companies Act (CAP. 39) The Authority: Registrar of Companies (ROC) within the Ministry of Finance and Economy (MOFE) ​Types of Company: Limited by shares. All private companies name must end with the words “Sendirian Berhad” or its abbreviation “Sdn Bhd” to denote its limited by shares company Restriction on Activities: May carry out any business that is lawful in Brunei either in, from or through the country. Financial services and activities require licensing from the Autoriti Monetari Brunei Darussalam (AMBD) Corporate Tax: Headline tax of 18.5% for companies incorporated or registered as foreign branch under the Companies Act (CAP. 39). Corporate tax exemption is available for the first 3 consecutive years of assessment for newly incorporated companies as follows – - first B$100,000 of assessable income is exempted from tax; - 50% of the next B$150,000 of assessable income is chargeable at 18.5%; and - the full amount of the remaining assessable income is chargeable at 18.5% Tax of 55% for companies engaged in the exploration and production of oil and gas Exemption from corporate tax if gross sales/turnover during the basis period is less than B$1 Million Certain specific industry tax incentives are available Withholding Tax: Yes Personal Income Tax: No Value Added Tax: No Sources of Tax Law: Income Tax Act (CAP. 35), Income Tax Act – Petroleum (CAP. 119) Capital Requirement: Minimum paid-up capital of B$2.00 and minimum authorised capital is B$25,000.00 Currency of Capital: Brunei Dollar (B$) Registered Office: Required Shareholders: Minimum of 2 shareholders, they can either be individual or corporation. No residency requirement and 100% foreign owned is allowed Directors: Minimum of 2 directors, at least one must be ordinarily resident in Brunei. If more than 2 directors, at least 2 of them must be ordinarily resident Company Secretary: Not mandatory Registered Office: Local registered office and physical addresses are required (no PO box). Statutory books of the company must be maintained at the registered office Annual Fees Payable: Only pays the capital registration fee on incorporation. No annual recurring government fee Public Records: Limited, by way of an extract via company search at the ROC BN portal Register to Maintain at its Registered Office: ​ - Register of Directors (Form X) - Register of Members - Register of Secretaries - Register of Director's Shareholding - Register of Controllers - Register of Nominee Directors Company Accounts: 1st accounts must be prepared and adopted within 18 months from the date of incorporation and every subsequent 12 months thereafter. Accounts must be kept at the registered office Audited Accounts: Not mandatory if all shareholders individuals, the shareholders consist of less than 20 and if the revenue in a financial year is less than B$1 Million (for financial year which is less than 12 months, the revenue shall be proportionately adjusted) Incorporation Time: Minimum 6-8 months Company Meetings: Every company is required to hold an Annual General Meeting (“AGM”) of the shareholders to adopt the accounts. The first AGM must be held within 18 months from the date of incorporation and thereafter, an AGM must be held once in every calendar year and not more than 15 months from the date of the last AGM. In addition, the accounts tabled at the AGM must not be more than 6 months from the date of financial period Common Seal: Not required Annual Return: Yes Tax Return: Yes Online Incorporation: Available, via One Common Portal (OCP) ocp.mofe.gov.bn

FAQs on Brunei Sdn Bhd

  • Hi, I am not Malaysian, but I am a director of my own Labuan company. Can I reside and work in Malaysia?
    Certainly! You can apply for a 2 years renewable work permit which allows multiple entry into Malaysia with no visa required. With the work permit, you can conveniently enter and reside in Malaysia to facilitate your business meetings and to carry out your business operation.
  • If I want to employ an expatriate to work with me in my Labuan company, can he obtain a work permit?
    Yes, he is eligible to apply for work permit. However, it should only be in respect of the following positions as specified by the Immigration Department of Malaysia – Top management (i.e. Chief Executive Officer, Chief Financial Officer, Chief Operating Officer); Technical experts (i.e. IT specialist or other specialists related to Labuan trading activities); Professionals such as accountant, lawyer, consultant, underwriter, economist, advisor, engineer, actuary, trader) – please note this is only applicable if you own a Labuan International Commodity Trading Company.
  • My family would like to join me to live in Malaysia. Am I able to sponsor them with my work permit?
    Yes, your spouse, children under age 21 and your parents may apply for dependent pass under your work permit. Please take note that a stamped duty paid personal bond signed by yourself is required to secure your parents' dependent passes.
  • With the work permit under my Labuan company, can I reside in any part of Malaysia?
    Unfortunately, no. Currently you are only eligible to reside anywhere in the Peninsular Malaysia and Labuan. You can base yourself in Kuala Lumpur but before doing that you will need to apply and obtain approval from Labuan FSA for a marketing office in KL, in addition to your Labuan main operational office.
  • Can you share with me on the eligibility criteria to apply for work permit?
    Sure, there’s a checklist of requirements to be fulfilled – minimum income of RM10,000 per month which may consist of basic salary, cash allowance, benefits-in-kind, value of living accommodation and other fees and commissions; possess competency and working experience related to the position applied; and meet the “fit and proper person requirements”.
  • Brilliant! Are there any fees to pay and documents that need to get prepared for my work permit application?
    Work permit application involves two approving authorities namely Labuan FSA and the Immigration Department. Fees to be paid and documents to be submitted to Labuan FSA are as follows – Make an advance payment covering 2 years of your company's annual fees, approx. USD1,600.00; Comprehensive business plan; Employment contract, duly stamped; Labuan office's tenancy agreement, duly stamped; Income tax reference number (Labuan entity, employer’s tax reference and employee’s tax reference); Recommendation letter from a trust company in Labuan; Form DP11; Copy of applicant’s passport, with validity period of not less than 12 months; Applicant’s passport sized-photo, high resolution with white background; CV and copy of academic certificates; and Any other documents required by the approving authorities. All supporting documents are to be certified by Notary Public in your home country. Documents which are not in the national language of Malaysia or in English is required to be translated by a qualified translator. Please contact us for the latest checklist of documents issued by the Immigration Department.
  • I am told that I need a residential address in Malaysia to apply for work permit? Is this the case?
    That is true. However, it is no longer a requirement under the new guideline issued by Labuan FSA. Instead, the employer or company must provide an address in Labuan. If, for example, the work permit holder will be based in KL, the company must first apply and obtain approval for a KL marketing office from Labuan FSA.
  • Do I have to travel to Malaysia to apply for work permit?
    Once your work permit is approved, you must travel to Labuan and proceed to the Immigration Department for visa stamping on your passport. If you're already in Malaysia at the time of approval, you must exit the country and re-enter into Malaysia for the work visa endorsement done in Labuan. This meeting is only mandatory for first time application of the work permit. Visa fee is payable to the Immigration Department when you're in Labuan. Fee varies depending on the applicant's nationality. The visa fee is payable via debit/credit card only. You may also be required to attend an interview session conducted by Labuan FSA at their discretion.
  • Am I subject to personal income tax after obtaining my work permit?
    Expatriates receiving income (including employment income) from a Labuan company is required to file a tax return with the Inland Revenue Board of Malaysia (“IRB”). Your employment income is taxable by the IRB and you are required to file for personal tax return before 30th April annually.
  • Beside the salary derived from Labuan company, I expect to receive director’s fee. Will the director's fee be taxed as well?
    Director’s fee is not taxable. However, you are required to declare this income in your personal tax filing annually. This incentive has been extended until YA2025.
  • What about the requirements for my dependents? Any checklist you can share with me?
    There is no need to re-apply separately with Labuan FSA. As long as you receive a letter of approval from Labuan FSA, you may apply to include dependent pass for your dependents simultaneously under your approved visa. Documents required for submission to the Immigration Department include the following - Covering letter from you or your employer (employing company); Spouse - copy of marriage certificate; Children - copy of birth certificate/custody letter (for adoptees); Parents - personal bond; Form DP11A; and High resolution passport-sized photo, with white background. All copy documents for your dependents must be duly certified by the employer and counter certified by your country's respective Consulate Office in Malaysia.

FAQs on Brunei Foreign Branch

  • Hi, I am not Malaysian, but I am a director of my own Labuan company. Can I reside and work in Malaysia?
    Certainly! You can apply for a 2 years renewable work permit which allows multiple entry into Malaysia with no visa required. With the work permit, you can conveniently enter and reside in Malaysia to facilitate your business meetings and to carry out your business operation.
  • If I want to employ an expatriate to work with me in my Labuan company, can he obtain a work permit?
    Yes, he is eligible to apply for work permit. However, it should only be in respect of the following positions as specified by the Immigration Department of Malaysia – Top management (i.e. Chief Executive Officer, Chief Financial Officer, Chief Operating Officer); Technical experts (i.e. IT specialist or other specialists related to Labuan trading activities); Professionals such as accountant, lawyer, consultant, underwriter, economist, advisor, engineer, actuary, trader) – please note this is only applicable if you own a Labuan International Commodity Trading Company.
  • My family would like to join me to live in Malaysia. Am I able to sponsor them with my work permit?
    Yes, your spouse, children under age 21 and your parents may apply for dependent pass under your work permit. Please take note that a stamped duty paid personal bond signed by yourself is required to secure your parents' dependent passes.
  • With the work permit under my Labuan company, can I reside in any part of Malaysia?
    Unfortunately, no. Currently you are only eligible to reside anywhere in the Peninsular Malaysia and Labuan. You can base yourself in Kuala Lumpur but before doing that you will need to apply and obtain approval from Labuan FSA for a marketing office in KL, in addition to your Labuan main operational office.
  • Can you share with me on the eligibility criteria to apply for work permit?
    Sure, there’s a checklist of requirements to be fulfilled – minimum income of RM10,000 per month which may consist of basic salary, cash allowance, benefits-in-kind, value of living accommodation and other fees and commissions; possess competency and working experience related to the position applied; and meet the “fit and proper person requirements”.
  • Brilliant! Are there any fees to pay and documents that need to get prepared for my work permit application?
    Work permit application involves two approving authorities namely Labuan FSA and the Immigration Department. Fees to be paid and documents to be submitted to Labuan FSA are as follows – Make an advance payment covering 2 years of your company's annual fees, approx. USD1,600.00; Comprehensive business plan; Employment contract, duly stamped; Labuan office's tenancy agreement, duly stamped; Income tax reference number (Labuan entity, employer’s tax reference and employee’s tax reference); Recommendation letter from a trust company in Labuan; Form DP11; Copy of applicant’s passport, with validity period of not less than 12 months; Applicant’s passport sized-photo, high resolution with white background; CV and copy of academic certificates; and Any other documents required by the approving authorities. All supporting documents are to be certified by Notary Public in your home country. Documents which are not in the national language of Malaysia or in English is required to be translated by a qualified translator. Please contact us for the latest checklist of documents issued by the Immigration Department.
  • I am told that I need a residential address in Malaysia to apply for work permit? Is this the case?
    That is true. However, it is no longer a requirement under the new guideline issued by Labuan FSA. Instead, the employer or company must provide an address in Labuan. If, for example, the work permit holder will be based in KL, the company must first apply and obtain approval for a KL marketing office from Labuan FSA.
  • Do I have to travel to Malaysia to apply for work permit?
    Once your work permit is approved, you must travel to Labuan and proceed to the Immigration Department for visa stamping on your passport. If you're already in Malaysia at the time of approval, you must exit the country and re-enter into Malaysia for the work visa endorsement done in Labuan. This meeting is only mandatory for first time application of the work permit. Visa fee is payable to the Immigration Department when you're in Labuan. Fee varies depending on the applicant's nationality. The visa fee is payable via debit/credit card only. You may also be required to attend an interview session conducted by Labuan FSA at their discretion.
  • Am I subject to personal income tax after obtaining my work permit?
    Expatriates receiving income (including employment income) from a Labuan company is required to file a tax return with the Inland Revenue Board of Malaysia (“IRB”). Your employment income is taxable by the IRB and you are required to file for personal tax return before 30th April annually.
  • Beside the salary derived from Labuan company, I expect to receive director’s fee. Will the director's fee be taxed as well?
    Director’s fee is not taxable. However, you are required to declare this income in your personal tax filing annually. This incentive has been extended until YA2025.
  • What about the requirements for my dependents? Any checklist you can share with me?
    There is no need to re-apply separately with Labuan FSA. As long as you receive a letter of approval from Labuan FSA, you may apply to include dependent pass for your dependents simultaneously under your approved visa. Documents required for submission to the Immigration Department include the following - Covering letter from you or your employer (employing company); Spouse - copy of marriage certificate; Children - copy of birth certificate/custody letter (for adoptees); Parents - personal bond; Form DP11A; and High resolution passport-sized photo, with white background. All copy documents for your dependents must be duly certified by the employer and counter certified by your country's respective Consulate Office in Malaysia.

Please note that whilst considerable care has been taken to ensure the information contained within this page is accurate and up to date, no warranty is given as to the accuracy or completeness of any information and no liability is accepted for any errors or omissions in such information. The information given in this page is based on our present understanding of the current laws, guidelines and regulations and may therefore be subject to change without notice.

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