Written by David Pingree
Brunei Darussalam appears to be improving as an ideal location to start a new business, according to doingbusiness.org’s new rankings.
The site has ranked Brunei as the world’s 139th best location to start a business. The kingdom was also ranked 59th in terms of overall pro-business environment, up from 79th in 2013.
Doingbusiness.org attributed its high ranking to the country’s high marks in getting credit, 55, and its liberal tax policy, 20.
Brunei boasts one of the most liberal and pro-business tax systems in the world, according to the Brunei Economic Development Board. A company worth USD 400,000 to USD 2 million is exempt from corporate taxation for its first five years of operation, with extensions available for an additional 9 years. If the company is located in Brunei’s Hi-Tech Park, it is tax-exempt for its first 11 years, which can then be extended for another 20 years.
Furthermore, the oil-rich nation lacks personal income, sales, export, payroll, capital gains and manufacturing taxes.
Modern infrastructure, a well-educated populace and a strategic location also make Brunei an attractive location for new business, the BEDB’s site stated. With ASEAN’s second largest GDP per capita, the kingdom also has plans to upgrade its labor force, strengthen its finance and tourism industries and widen its economic base, which remains heavily dependent on oil and natural gas.
However, according to the BEDB, it can take up to five to six weeks for a new company to formally become incorporated.
Based on private limited companies with fewer than 50 employees, doingbusiness.org found that it took, on average, two months to receive a miscellaneous license from the Municipal Board of Bander Seri Begawan. The site also noted that it took up to ten days just to register a company’s name with the Registry of Companies.
To fix these bureaucratic drawbacks, the Brunei government has created the Business Facilitation Center and launched its OneBiz program.
Soft-launched in February of 2013, OneBiz aims to facilitate the license application process with integrated form filing. When fully operational, OneBiz hopes to cut down on a company’s registration time by half.
Regardless of the country’s slow start-up process, Brunei is seen by many economic analysts to become a hot location for outside investors, according to Forbes.
The Milken Institute Global Conference held an economic panel discussion focusing on ASEAN in April. The panel recommended Brunei as one of ten ASEAN countries as a prime site for investors.
–Edited by Kristine Diaz