Skip Ribbon Commands
Skip to main content

Skip Navigation LinksInvestment-Incentives


Investment Incentives



incentives01 

Competitive investment incentives are ready and available for investors throughout the business cycle of start up, growth, maturity and expansion. Investment incentives are provided for in the Investment Incentives Order 2001. This Act offers incentives in the form of tax exemption for the followings:

  1. PIONEER INDUSTRIES
    Any company which has been granted a pioneer certificate will be given the pioneer incentives provided the following requirements are met:

    • It is expedient in the public interest to do so;
    • The industry has not been carried out in Brunei Darussalam on a scale adequate to the economic needs of the country; and
    • There are favourable prospects for development to be a pioneer industry and any specific product of that industry to be pioneer product.

    TAX RELIEF PERIOD
    The tax relief period of pioneer industry will begin on its product will begin on its production day. The tax relief periods are as follows:

    incentives02  incentives03



    INVESTMENT INCENTIVES
    • Exemption from taxes on imported duties on machinery, equipment, component parts, accessories or building structures.
    • Exemption from taxes on imported raw materials.
    • A pioneer company is exempted from paying import duties on raw materials not available or produced in Brunei Darussalam intended for the production of the pioneer product.
    • Carry forward losses and allowances.
  2. PIONEER SERVICES COMPANIES
    Companies may be classified as Pioneer Services Companies:

    • It is expedient in the public interest.
    • When a company is engaged in any qualifying activity as follows:
      1. Any engineering or technical services including laboratory, consultancy and research and development activities;
      2. Computer-based information and other computer-related services;
      3. The development or production of any industrial design;
      4. Services and activities which relate to the provision of leisure and recreation;
      5. Publishing services;
      6. Services which relate to the provision of education;
      7. Medical services;
      8. Services and activities which relate to agricultural technology;
      9. Services and activities which relate to the provision of warehousing facilities;
      10. Services which relate to the organisation  or management of exhibitions and conferences;
      11. Financial services;
      12. Business consultancy, management and professional services;
      13. Venture capital fund activity;
      14. Operation or management of any mass rapid transit system;
      15. Services provided by auction house;
      16. Maintaining and operating a private museum; and
      17. Such other services or activities as the Minister may prescribe.

    TAX RELIEF PERIOD
    The tax exemption period of a pioneer service company shall start on the commencement day. Exemption period for eight years but extension not exceeding 11 years in total.

    INVESTMENT INCENTIVES

    • Exemption from income tax.
    • Carry forward losses and allowances.
  3. POST PIONEER COMPANIES
    Any company which is:

    • A pioneer company on or after May 1, 1975;
    • A pioneer enterprise or pioneer service company;
    • An export enterprise which had been a pioneer enterprise immediately before its tax relief period as export enterprise.

    TAX RELIEF PERIOD
    Tax relief period of Post Pioneer Company shall start on its commencement day and shall continue for a period not exceeding six years and may be extended, but not more than 11 years in total.

    INVESTMENT INCENTIVES

    • Exemption from income tax.
    • Deduction of losses.
    • Adjustment of capital allowances and losses.
  4. EXPANSION OF ESTABLISHED ENTERPRISES
    Any company intending to incur new capital expenditure for the purpose of the manufacture or increased manufacture of an approved product may apply to the Minister for an Expansion Certificate.

    To qualify for an Expansion Certificate:

    • The company must incur a new capital expenditure in the purchase of productive equipment exceeding $1 million; or
    • Where the expenditure is less than $1 million but exceeds $500,000 and will result in an increase of not less than 30 per cent in value at the original cost of all the productive equipment of the company.

    TAX RELIEF PERIOD

    incentives04 

    INVESTMENT INCENTIVE
    Exemption from income tax.

  5. EXPANDING SERVICE COMPANIES
    The tax relief period of expanding service company shall:

    1. Commence on its expansion day; or
    2. If the expansion day falls within the tax relief period specified in any certificate previously issued to the company for the same or similar qualifying activity, tax relief period will begin immediately after the expiry of the existing tax relief period.

    Exemption period of 11 years. The extension period not exceeding five years at any one time and may be extended but not more than 20 years in total.

    TAX RELIEF PERIOD

    incentives05 

    INVESTMENT INCENTIVE
    Exemption from income tax.

  6. PRODUCTION FOR EXPORT

    • Any company which is manufacturing any export product or is engaged in agriculture, forestry and fishery activities either wholly or partly for export, as an export enterprise will be issued a certificate subject to terms and conditions.
    • Every export enterprise shall specify the accounting period in which it is expected that the export sales of the export product or export produce:
      1. will not be less than 20 per cent of the value of its total sales; and
      2. will not be less than $20,000.

    TAX RELIEF PERIOD

    incentives06 
    Where an export enterprise has incurred or is intending to incur a capital expenditure of:

    • Not less than $50 million; or
    • Not less than $500,000 but less than $50 million; and
    • More than 40 per cent of the paid-up capital of export enterprise is held by citizens and persons to whom a resident permit has been granted under regulations made under Immigration Act (Chapter 17) and the export enterprise will promote or enhance the economic or technological development of Brunei Darussalam.

    TAX RELIEF PERIOD

    incentives07

    INVESTMENT INCENTIVES

    • Exemption from income tax.
    • Exemption from import duties on machinery, equipment, component, parts, accessories or building structures.
    • Exemption from import duties on raw material.
  7. EXPORT OF SERVICES
    Qualifying services are as follows:
    1. Technical services including construction, distribution, design and engineering services;
    2. Consultancy, management supervisory or advisory services relating to any technical matter or to any trade or business;
    3. Fabrication of machinery and equipment and procurement of materials, components and equipment;
    4. Data processing, programming, computer software development, telecommunications and other computer services;
    5. Professional services including accounting, legal, medical and architectural services;
    6. Educational and training services; and
    7. Any other services as the Minister may prescribe.

    TAX RELIEF PERIOD
    Tax relief period of an export service company shall commence on its start day, not exceeding 11 years. The extension shall not exceed three years at any one time but not in aggregate exceeding 20 years.

    INVESTMENT INCENTIVES

    • Exemption from income tax.
    • Deduction of allowances and losses.
  8. INTERNATIONAL TRADE
    Where a company is engaged in:
    • International trade in qualifying manufactured goods or Brunei Darussalam domestic product and export sales of those goods or product separately or in combination exceed or are expected to exceed $3 million per annum; or
    • Entreport trade in any qualifying commodities and export sales of those qualifying commodities exceed or are expected to exceed $5 million per annum.

    incentives08 

    TAX RELIEF PERIOD
    The tax relief period of an international trading company, in relation to any certificate issued to that company, shall commence on start day and shall continue for a period of eight years.

    INVESTMENT INCENTIVE
    Exemption from income tax.

  9. FOREIGN LOANS FOR PRODUCTIVE EQUIPMENT
    There is a 20 per cent withholding tax for interest paid to non-resident lenders. However, the government may grant tax exemption for any "approved foreign loan" if:

    • The loan is utilised for the purchase of productive equipment;
    • The credit facilities are obtained through financial agreement with the foreign lending company; and
    • The amount of loan is not less than $200,000.

    TAX RELIEF PERIOD
    Depend on the financial agreement with the foreign lender.

    INVESTMENT INCENTIVE
    Exemption of approved foreign loan interest from paying withholding tax.

  10. INVESTMENT ALLOWANCES
    Subject to the economic, technical and other merits of the project, an investment allowance may also be applied in respect of the fixed capital expenditure of any of the following:

    • For the manufacture or increased manufacture of any product;
    • For the provision of specialised engineering engineering or technical services;
    • For research and development;
    • For construction operation;
    • For recycling of domestic industrial waste;
    • In relation to any qualifying activity under pioneer services company;
    • For promotion of the tourist industry (other than a hotel) in Brunei Darussalam.

    Every certificate issued under this section shall specify a date from the investment day.

    INVESTMENT ALLOWANCES
    Where a company proposes to carry out a project, the investment allowance granted for the approved project shall be a specified percentage not exceeding 100 percent of the amount of the fixed capital expenditure incurred on each item specified on an approved project if the fixed capital expenditure is incurred.

    • Within such period, not exceeding five years, commencing from the investment day.
    • In the case of the promotion of tourist industry, not exceeding 11 years commencing from the investment day.

    INVESTMENT INCENTIVE
    Exemption from income tax.

  11. WAREHOUSING AND SERVICING

    • Any company intending to incur fixed capital expenditure of not less than $2 million for the establishment or improvement or warehousing facilities wholly or mainly for storage and distribution of manufactured goods to be sold and exported by the company, with the processing or the provision of related services; or
    • The purpose of providing technical or engineering services (or such other services as the Minister may, by notification in the gazette, specify) wholly or mainly to a person who is not resident in Brunei Darussalam.

    TAX RELIEF PERIOD
    The relief period of warehousing company shall commence on its start day and shall continue but not exceeding 11 years. The extension shall not exceed three years at one time but not exceeding 20 years in aggregate.

    INVESTMENT INCENTIVE
    Exemption from income tax.

  12. INVESTMENT IN NEW TECHNOLOGY COMPANIES
    Any company incorporated in Brunei Darussalam which is desirous of developing or using in Brunei Darussalam a new technology in relation to a product, process or service may make application for this incentive provided as follows:

    • The technology, if introduced in Brunei Darussalam, would promote or enhance the economic or technological development in Brunei Darussalam.
    • In respect of which not less than 30 percent of the paid-up capital is beneficially owned by citizens or persons to whom a resident permit has been granted under regulations made under the Immigration Act (Chapter 17) throughout the whole of the qualifying period of the technology company.

    INVESTMENT INCENTIVE
    Deduction allowable to eligible holding company.

  13. OVERSEAS INVESTMENT AND VENTURE CAPITAL
    Application for and issue of certificate to venture company:

    • Any company incorporated in Brunei Darussalam, which is desirous of developing or using in Brunei Darussalam a new technology in relation to a product, process or service may make an application in the prescribed form to the Minister to be approved as venture company.
    • Where the Minister is satisfied that the technology, if introduced in Brunei Darussalam, would promote or enhance the economic or technological development of Brunei Darussalam. Application for and issue of certificate to technology investment company or overseas investment company:
    • Any company, incorporated and resident in Brunei Darussalam, desirous of investing in an overseas company which is developing or using a new technology in relation to product, process or services may make an application in prescribed form to the Minister to be approved as a technology investment company.
    • That technology, if introduced in Brunei Darussalam would promote or enhance the economic or technological development of Brunei Darussalam.
    • Any company, incorporated and resident in Brunei Darussalam, desirous of investing in an overseas company for the purpose of acquiring for use in Brunei Darussalam any technology from overseas company or for gaining access to any overseas market for its eligible holding company or any subsidiary.

    incentives09 

    INVESTMENT INCENTIVE
    Deduction of losses allowable to eligible holding company.

    OTHER INCENTIVES UNDER THE INCOME TAX (CHAPTER 35)

    • Basic right and guarantees to investors Repatriation of capital is not restricted. No restrictions are imposed on remittance of earning profits and dividends on investment.
    • Carry forward of losses Losses arising from trade, business, profession or vocation in basis period can be set off against the statutory income of that period.
    • Carry forward capital allowances during the relief period Capital allowances which remain unabsorbed at the end of the tax relief period may be applied against post pioneer profits.
    • Deduction from taxable corporate income (depreciation allowance) Depreciation is not allowable expense and replaced by capital allowance for qualifying capital expenditure. Tax payer is entitled to claim wear and tear allowance calculated as follows:
      1. Industrial Buildings 
        An initial allowance of 10 per cent is given in the year of expenditure, and an annual allowance of 2 per cent of the qualifying expenditure is provided on a straight line basis until the total expenditure is written off.
      2. Machinery and Plant 
        An initial allowance of 20 per cent of the cost is given in the year of expenditure together with annual allowances calculated on the reducing value of assets. The rate prescribed by the collector of income tax range from 3 per cent to 25 per cent depending on the nature of the asset.
    • Exemption from capital gains tax There is no capital gains tax in Brunei Darussalam.
    • Other exemptions

    There are no export, sales payroll and manufacturing taxes in Brunei Darussalam.



DECLARED PIONEER INDUSTRIES AND PRODUCTS
The following industries have been declared as pioneer industries and pioneer product

incentives10  incentives11

incentives12 
NOTE * The pioneer Certificates have already been granted to companies.


 

For further information and clarification, please contact:


Promotion and Facilitation Services

Ministry of Industry and Primary Resources

Jalan Menteri Besar BB3910

Brunei Darussalam

Tel: (673) 238 0022 Fax: (673) 238 2835

Website: www.industry.gov.bn

Back to Top