Doing Business in Brunei Essay Sample
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Doing Business in Brunei Essay Sample
Brunei Darussalam is situated on the north coast of the island of Borneo, in South East Asia, where it borders Sarawak (East Malaysia) and the South China Sea. Brunei became fully independent from the UK on 1 January 1984. The country is a ‘Malay Muslim Monarchy’ (MIB in the Malay acronym), governed by His Majesty the Sultan, who appoints Ministers – in accordance with strong local customs – and ensures that the proceeds from Brunei’s oil and natural gas (LNG) exports are spent in the public interest. A small population (about 420,000) also helps keep Brunei towards the top of international rankings for per capita GDP.
An adult literacy rate of 96 percent, and English is widely spoken – it is used as a language of education in State schools and many Bruneians tend to study abroad, particularly in the UK and Australia. Economic stability – Brunei Darussalam is a stable and prosperous country which offers excellent infrastructure in a strategic location (within the ASEAN). The regulations relating to foreign participation in equity are flexible. In many instances there can be 100 percent foreign ownership. There are usually few difficulties in securing approval for foreign workers, ranging from labourers to managers. Safe and tranquil environment. The living conditions in Brunei are among the best and most secure in the region. The local market, while small, is relatively lucrative. The costs of utilities are among the lowest in the region. Brunei Dollar, pegged at par to the value of the Singapore Dollar. Bruneians are open to ideas, opportunities and new investments – particularly those which contribute to the diversification of their currently hydrocarbons-dependent economy and which lead to a range of job opportunities for Bruneians. No personal income tax, no sales tax, payroll, manufacturing or export taxes. Approved foreign investors can also enjoy a company tax holiday of up to eight years. Above all else, His Majesty’s Government genuinely welcomes foreign investment in almost any enterprise. This occasionally gets lost in translation by local bureaucracy; but the aim is to provide speedy, efficient and practical assistance with all your inquiries.
Opportunities in Brunei
As a young nation, there are plenty of opportunities in Brunei. Besides the energy sector, which includes renewables as well as energy efficiency and conservation, there is potential for opportunities in eco tourism, recreation and sports, creative industries, consumer goods, waste management, food and agriculture, ICT, and education (including biosciences research – associated with Brunei’s famously pristine rainforest, part of the “The Heart of Borneo”, the “Coral Triangle” and CO2-sequestering peat swamps) and vocational training.
Trade between UK and Brunei
It is difficult to quantify exactly the bilateral trade relationship between the UK and Brunei since many goods are transhipped through Singapore. Brunei ranks about 85th for UK exports and about 120th for UK imports. Official figures are that in 2010 (latest final figures available) Brunei imported goods worth about GBP 75 million from the UK, and exported to the UK goods of about GBP 10 million. Exports of services to Brunei in 2010 were about GBP 54 million and imports about GBP 8 million. With such low volumes the year-on-year change can be heavily influenced by a single large contract. UK exports are mainly in engineering (especially in the oil and gas sectors), defence and luxury goods. The UK was also the largest source of FDI in 2010, aimed primarily at capital investment in the oil and gas sector. Investment figures are difficult to ascertain, but a significant amount of Bruneian capital is invested through the City of London. Other invisible earnings are also significant, e.g. in legal and accounting services. The major UK investment in Brunei is Shell’s stake in Brunei Shell Petroleum and Brunei LNG, which are the main producers of Brunei’s oil and gas reserves.
Brunei is an independent (Sunni) Islamic State. Other religions are tolerated but not actively encouraged. Extremism in any form is not tolerated. Brunei has been governed by an absolute, but benevolent, monarchy under a nominal State of Emergency since an insurrection in 1962. The Head of State, His Majesty Sultan Hassanal Bolkiah, is also Prime Minister, Defence Minister and Finance Minister. Acting as Prime Minister, HM The Sultan appoints a Cabinet of eleven other ministers, not including the Crown Prince HRH Prince Billah and HRH Prince Mohamed who are, respectively, the Senior Minister in the Prime Minister’s Office and the Minister for Foreign Affairs and Trade. The non-royal members were last reshuffled in May 2010. In 2004, the Sultan revived an appointed Legislative Council and since then there have been a series of Constitutional Amendments to allow some elected representatives from the communities. The Council has since met annually to discuss and approve the State Budget. There is one political party (a further two were deregistered in 2007 and 2008), which plays little role in the day-to-day life of the country.
Brunei Darussalam has a small but wealthy economy, which is growing at a slow and steady rate. It has remained stable with an average inflation rate of 1.5% over the past twenty years. The people of Brunei Darussalam enjoy a high quality of life with a per capita GDP of about GBP 20,000, the second-highest in ASEAN after Singapore. Brunei Darussalam’s economy has been dominated by the oil and gas industry for the past 80 years. Hydrocarbon resources account for over 90% of its export earnings and more than 60% of its GDP. Today, Brunei is the third largest oil producer in South East Asia and the fourth largest producer of liquefied natural gas in the world. However, there is growing awareness in the country that natural resources are finite, and that Brunei needs to diversify away from its reliance on oil and gas. Plans for the future include up-skilling the labour force, reducing unemployment, strengthening the tourism sector, and further widening the economic base beyond oil and gas.
Brunei Darussalam imports about 80% of its food requirements, with the government subsidising certain staples such as rice, sugar, cooking oil and milk. The government also subsidises housing, electricity, water and oil as well as providing comprehensive medical services and free education through to university level for citizens. Brunei has no central bank and operates a currency board system with the Brunei Dollar (BND) being pegged to the Singapore Dollar, allowing both currencies to be legally interchangeable in Brunei and Singapore. Brunei Darussalam has a low tariff regime and no capital gains or personal income tax. Under its Investment Incentives Order 2001 prospective investors will also enjoy a wide range of incentives, including up to a possible 20 years exemption from corporate tax; exemption from import duties taxes on raw material, machinery, equipment, component parts, accessories or building structures and adjustment of capital allowance and losses. Brunei’s major trading partners are Singapore, Malaysia, Japan, Korea, UK, USA and Australia
The population of Brunei is currently about 420,000 – 66% Malay, 11% Chinese, 6% other indigenous groups, and 27% other communities. 65% are citizens, 8% are Permanent Residents, and the remaining 27% are Temporary Residents. 71% of the population lives in the Brunei-Muara District, one of the four Districts of Brunei Darussalam.
Getting here and advice about your stay
FCO Travel Advice
The FCO website has travel advice to help you prepare for your visits overseas and to stay safe and secure while you are there.
For advice please visit the FCO Travel section
By Air Royal Brunei Airlines offer daily “direct flights” from London Heathrow to Brunei (with a brief stop in Dubai). All other routings are connections through regional hubs such as Singapore, Kuala Lumpur, Bangkok and Hong Kong. Brunei adheres to all international security protocols regarding the carrying of dangerous materials and liquids. At the airport The small size of Brunei’s International Airport allows for a quick and easy arrival. There are taxis readily available and the airport is conveniently located about 20 minutes from the Bandar Seri Begawan or Gadong (cost from airport to BSB is about BND 25). A Departure Tax of BND 12 is payable for most departing passengers from Brunei, depending on the ticket booked.
This is payable in local currency, in cash, at the airport check-in desk. Visas Passports should have 6 months validity remaining when you enter Brunei. UK citizens are exempt from the requirement of a visa for visits of up to 30 days. For a longer stay, visas can be acquired at the airport through immigration upon arrival. The fee is no more than BND 50. Please consult the Brunei immigration website for more information about residence/work permits: http://www.immigration.gov.bn/visiting.htm Your stay Many visitors stay at the Empire Hotel, which offers an affordable package for what it considers a 7 star hotel. Please note that the hotel is located some twenty minutes outside the central business district of Bandar Seri Begawan and local taxi services are limited and expensive. The Empire can service the full range of business meetings, conferences and functions. More information at: http://www.theempirehotel.com/ Other recommended hotels are the Radisson, Rizqun International, Brunei Hotel, Centrepoint Hotel and Orchid Garden Hotel. More information can be found at: http://www.asiahotels.com/hl/Brunei.asp
Preparing to Export to Brunei
Brunei has been a member of the Association of Southeast Asian Nations (ASEAN) since 1984. ASEAN’s primary economic concern is to make the region a competitive force on the global stage, including by development of an ASEAN Free Trade Area (AFTA). The AFTA aims to eliminate tariff and non-tariff barriers between ASEAN countries, resulting in greater economic productivity. Direct sales onto the Brunei market are possible for British companies. British goods enjoy a cachet here, partly reflecting the strength of bilateral relations and people-to-people ties between the two countries. However, in business dealings, “the last mile” may be slow and difficult. A good, local contact is often essential. It is also possible to set up a branch office in Brunei. In some cases special licenses must be obtained from the government before a company can commence business. This applies primarily to businesses that directly affect the public, such as banks, finance companies, insurance companies, travel agencies and moneylenders.
Those interested in setting up a company or branch may find the following additional information useful: http://www.bedb.com.bn/doing_guides_setting_company.html British companies wishing to develop their business in Brunei are advised to undertake as much market research and planning as possible in the UK. UKTI’s team in Brunei can provide a range of services to British-based companies. These include the provision of market information, research reports, validated lists of agents/distributors, key market players or potential customers; establishing the interest of contacts in working with you; and arranging appointments. The UKTI team in Brunei can also organise seminars or other events for you to meet contacts or promote your company. You can commission these services under which are chargeable and operated by UK Trade & Investment (UKTI) to assist British-based companies wishing to enter or expand their business in overseas markets. To find out more about commissioning work, please contact your local UKTI office. See www.ukti.gov.uk
Sources of information
More information on business in Brunei is also available from these commercial and government websites: • Government of Brunei Homepage: http://www.pmo.gov.bn/ Links to information on tender opportunities as well as links to all Ministry and Department web pages. Ministry of Industry & Primary Resources: http://www.bruneimipr.gov.bn/ Includes the Promotion & Entrepreneurial Development Division. Brunei Industrial Development Authority: http://www.bina.gov.bn/ First point for Investors to set up SMES or Co-operatives in Brunei. Includes links to Investor Guides, newsletters and downloadable forms Brunei ‘Official’ Website:
http://www.bruneitourism.travel/home.html Official country information.
Brunei Economic Development Board: http://www.bedb.com.bn/ The leading economic development agency for Brunei Darussalam. Provides the official information on ‘Doing Business’ in Brunei. Brunei Customs: http://www.mof.gov.bn/English/RCE/Pages/default.aspx Customs and Excise rules and regulations and information on facilitating legitimate trade and collecting revenue Brunei World Bank ‘Doing Business’ Report 2010: http://www.doingbusiness.org/~/media/fpdkm/doing%20business/documents/profiles/country/b rn.pdf A breakdown of statistics looking at where Brunei stands, economically, against 183 economies [note that Brunei is developing an online Business Licensing System which will substantially improve some of the indicators].
Oxford Business Group: http://www.oxfordbusinessgroup.com/economic_updates/Brunei%20Darussalam Free updates that go alongside the purchasable ‘Country Report’ Brunei Journal: http://www.bruneijournal.com/ Local and regional business news from Brunei
How to do business in Brunei
What companies should consider when doing business
Although there are opportunities for doing business in Brunei, obstacles remain. Out of 183 economies, Brunei ranks 83 in the World Bank Doing Business report 2012. Difficulties cited include: low efficiency in dealing with construction permits, registering property, getting credit, protecting investors, enforcing contracts, as well as underdeveloped business clusters, a poorly developed local private sector, lack of entrepreneurial culture and slow government decision making. Many of these have been problems for a number of years and the government is taking steps to improve the country’s performance. The Employing Workers indicator was not included in the 2012 report but in the 2010 edition Brunei ranked 4th, and the current National Development Plan places heavy emphasis on enhancing business infrastructure to attract more foreign direct investment. In addition Brunei has one of the most liberal tax regimes in the region. Other than a 22% corporate income tax, Brunei has no taxes on personal income, sales, payroll, export, capital gains or manufacturing. However, there is a Withholding tax of up to 20% on payments sourced in Brunei and made to non-residents. There are also some tax incentives available for companies.
Gateways/Locations – Key areas for business
• In the northwest, the Capital City of Bandar Seri Begawan, and the adjacent districts of Gadong and Kiulap, would be the business areas to target, although there is potential for business growth in the quieter towns, with potential for development, such as Tutong and Kuala Belait. The commercial port area of Muara will also be of increasing importance for business growth. In the southeast, Seria and Kuala Belait, traditional home of the oil and gas/energy sector. Midway down the coast, the government has created an “industrial park”, at Sungai Liang (SPARK), next to the methanol production plant (and future location of urea and ammonia plants).
Market Entry and Start up Considerations
To enter the Brunei market a company almost always needs to identify and appoint a local representative, distributor/agent. Your local UKTI office will advise you on how to commission a tailored report for your specific
needs and provide a list of potential partners.
Marketing and Branding
The importance of marketing and branding practices is yet to be fully recognised in Brunei. The traditional channels, such as advertising through print e.g. posters, newspapers, and broadcast media, such as TV and radio, are still the most important. Many businesses are now also exploiting the high use of social media among both younger and more well off demographics. There are also many businesses in the country that get by through word of mouth. Put another way, marketing, branding and advertising together represent a sector which offers business opportunities (especially to English-language based consultants).
Customs and Regulations
Brunei Customs authorities may enforce strict regulations concerning temporary importation into or export of items such as firearms, religious materials, antiquities, medications, business equipment, currency restrictions, ivory, alcohol, and strict import regulations on halal, chilled or frozen meat.
Items that are permitted to enter Brunei without incurring custom duty are: 60ml of perfume, 250ml of scented water, two litres of spirits or wine, and 12 cans of beer (alcohol for non-muslims only). Alcohol must be declared at Customs upon arrival. There is no cigarette or tobacco products allowance.
All goods may be imported or exported except for restricted, prohibited and controlled goods (see above). All imported and exported goods should be declared to the Customs and Excise Department by a declaration form, except for passengers’ hand baggage or personal effects on arrival, and goods arriving by post except for dutiable goods. More information is at:
Much of the law in Brunei derives from British Common Law. In particular, civil and criminal law descends from laws formulated during British administration. The influence of Islamic law is also prominent and an Islamic Criminal Law will soon be introduced to run in parallel to current law; the details of it are not currently known (July 2012). Brunei Law continues to evolve, so new business ventures are advised to consult the following website http://www.agc.gov.bn/ and /or a local law firm.
Brunei has a low tariff regime and no personal income tax. Company tax is 55 per cent for companies engaged in exploration and production of oil and gas, and is 22 per cent for other companies. Brunei has no personal income tax, no sales tax, payroll, manufacturing or export tax. Sole proprietorship and partnership businesses are not subject to income tax and approved foreign investors are not required to pay company tax for up to eight years. Companies are subject to tax on gains of profits from any trade, business or vocation, dividends received from companies not previously assessed for tax in Brunei, interest and discounts, rents, royalties, premiums and any other profits arising from properties However, there is no capital gains tax where the Collector of Income Tax can establish that the gains form part of the normal trading activities – they then become taxable as revenue gains. Brunei has a Double Taxation Agreement with the United Kingdom.
Responding to Tenders
Tenders are rare in Brunei and when they do arise, it is mainly to do with government infrastructure or development projects. They are announced in the national newspapers, sometimes only in the government Malay language paper, or directly conveyed to foreign Embassies. Each tender has different specifications and requirements, but most will have a short deadline, often as little as one month. UK companies bidding for work in Brunei, with or without a local partner, should be aware that as part of the tender process they would usually be required to submit certain certificates along with their tender bid. Tenders increasingly frequently require the lead company to be a Bruneian company which is registered with the appropriate government agency (eg with AITI for ICT tenders). These are certificates that state that they are registered, up to date with their tax, social and health insurance payments and that company directors, or members of the management board do not have a criminal record. Such certificates do not exist in the UK but there are equivalent UK documents or accepted substitutes that companies can submit to satisfy this requirement. Responses to tenders will normally require the payment of a variable administration fee in local currency.
Recruiting and Retaining Staffing
Unemployment is a major concern in Brunei with a current unemployment rate of 4% amongst locals. The majority of Brunei citizens and permanent residents work in the government and public sector, oil and gas industry or finance. There is an Employment Centre for Locals called ‘Pusat Pekerjaan Tempatan’ for local recruitment by the Ministry of Home Affairs. It helps the citizens of Brunei, especially graduate students, find employment. In spite of some restrictions, foreigners (particularly regional migrant workers) make up a significant portion of the work force. Work permits for foreigners are issued only for short periods (approximately 2 years) and must be continually renewed. Employment of regional migrant workers has to be through registered employment agencies.
Brunei’s Employment Order (2009) provides protection of employees’ rights. The Order covers aspects such as annual leave, fringe benefits and retirement benefits, as well as better protection of rights of part-time workers. The Order applies to both local and foreign workers in Brunei but does not apply to Civil Servants, Seamen, Domestic Workers and Managers, Executives and those in Confidential Positions. The main points are as follows: Salaries • No minimum salary. • Staff to be paid at least once a month. • Pay to be received no later than 7 days after the end of a working period. Employees in Brunei are paid on a monthly basis at the end of every month. Those working in the public and government sector receive bonuses at the end of the year (December), and some others at the end of the financial year (April/May). Pay can be done by cheque but is increasingly by bank transfer. Although the service can be slow, banks are reliable in Brunei. Hours (maximums) • Non-shift workers: • Shift workers: • Maximum overtime: • Rest day: 8 per day, or 44 per week. 44 per week over a 3 week period (maximum 12 hours per day). 72 hours per month. At least one per month.
Annual Leave Eleven (11) bank holidays per year. Paid leave applicable as shown below: Service (years) 1 2 3 4 5 6 7 8+ Paid Leave (days) 7 8 9 10 11 12 13 14
Sick Leave Up to 14 days certificated after at least 6 months service. Maternity Leave Brunei citizens are entitled by law to 105 calendar days on full pay after at least 6 months service with a company. Others are entitled to 63 days.
Intellectual Property Rights
Brunei has recently made significant developments in the protection of IPR, and will continue to take steps to strengthen the protection of IPR. For more information on Brunei Intellectual property rights, it is recommended that you consult the Attorney General’s Chambers at www.agc.gov.bn or for Patents visit the Patent Registry Office website at: http://www.brunei-patents.com.bn/ .
Chambers of Commerce
There is an active Britain Brunei Business Forum which has corporate and individual members from a range of business sectors. They have many years experience of doing business in Brunei and are a mine of relevant information; it is recommended that enquiries are made directly to this organisation and web links can be found through the British High Commission’s web-site: http://ukinbrunei.fco.gov.uk/en/
Business Etiquette, Language and Culture
All the ‘movers and shakers’ of Brunei are familiar with Western European business etiquette and culture, especially with the UK. Society is predominantly Muslim and although male dominated there is no real discrimination in the roles women can undertake in commerce, the legal profession and the civil service; and there is a Women’s Company in the Armed Forces. Attitudes are more conservative than in parts of Malaysia and Indonesia, for example. While tourists are greeted with pleasure by the bulk of the population their movements are well monitored and their leisure activities are restricted by the state – for example, even the tourist hotels do not serve alcohol and bikinis for women are frowned upon outside the immediate swimming pool areas. Bruneians are extremely friendly and peaceful people – living up to the word “Darussalam” in the country’s title, which means “Abode of Peace”. Crime is rare and violent crime almost unheard of. It is a familyorientated culture. Indeed, being a small country with many extended families, an unsurprising number of those in positions of power are related.
His Majesty The Sultan’s power is absolute. The country is governed through a Council of Ministers, all appointed by the monarch. The Sultan and Royal Family are universally treated with deference and respect. Care should be taken to say nothing that could be construed as derogatory or insulting.
As with any different culture there are customs and religious mores to be observed. Local titles indicate social or religious standing. Some of the more familiar one will encounter are: 1. Pehin (pronounced Pee-in) – an ancient honorific non-hereditary title bestowed on those the Sultan wishes to serve the Royal Court; it equates to a British Lord. A Pehin naturally commands respect because of his position. He should always be addressed as Pehin even when a close relationship has been established. Pehin should also be used instead of any military rank. There are also a small number of female Pehins. 2. Dato (Male) / Datin (Female) – a title bestowed by HM The Sultan. Dato is the equivalent of a UK Knighthood. 3. Pengiran (Male) & Dayangku (Female) – an ancient hereditary title which indicates there is some connection to the royal lineage. This may be very distant but nevertheless commands respect. For this reason it is not unusual to encounter Pengirans in more junior positions. Many Bruneians use this to their advantage in the business arena. 4. Haji (Male) / Hajah (Female) – one who has undertaken the Muslim Haj pilgrimage to Mecca. This will usually be included in someone’s name, for example Haji Abdul Aziz.
Bruneians are extremely polite and expect the same in return. While the index finger can be used to point at objects it is rude to use it to point to people; use the thumb of a clenched fist instead. Signals might be confusing to the westerner, for example a nod of the head may not mean “yes” but merely “I hear what you are saying”. This is an important cultural difference which needs to be understood by the visiting businessman who otherwise will leave a meeting with an entirely different perspective from the local host.
Generally a handshake is gentler than a westerner might be used to, sometimes amounting to not much more than a light touch. If in doubt wait, judge and reciprocate. A Bruneian female will offer her hand if she wishes; some ladies prefer not to, so always wait before offering one’s own. Direct questions often embarrass and answers tend towards the oblique. Individuals can be reluctant to offer information without getting to know one well first. Patience is a prized virtue, and frequent visits to establish personal relationships are key. This is not a country to do business in by email, fax or telephone. The relationship-based aspect of Brunei can seem labour-intensive to the outsider, especially if under pressure to “cut to the chase”.
Up-front investment of time and courtesy in key business relationships is the best way to establish the necessary trust. Without it, monitoring of your business in Brunei may suggest that “something is wrong”, but it may be almost impossible to find out what that is! It is also common in Brunei to come across complaints about bureaucracy, from foreign and local business people alike. Only very rarely is this a reference to corruption, which is not tolerated; for example, there is a very active and pro-active Anti-Corruption Bureau. Instead, it reflects the fact that, in Brunei, the public sector has evolved as much to provide employment as to deliver services (the government employs a majority of the working population), resulting in unnecessary layers of administration. Spurred by lowrankings in various international indexes, and by a growing sense that the nation needs a more efficient public sector (and more FDI), the government has prioritised reform of the civil service, e-governance, and consistent messaging for potential foreign investors (e.g. “one-stop-shops”). The energetic Brunei Economic Development Board (BEDB) is the most obvious embodiment of these reforms. But until they are fully realised, business people in Brunei will continue to come up against the occasional “Kafkaesque” instances of red tape.
Other ‘Dos and Don’ts’
Avoid visiting Brunei around Hari Raya (immediately after the end of the Muslim fasting month) or Chinese New Year. These holidays fall on a different month every year and many businesses are closed at this time. When inviting Bruneians to lunch or dinner, consider their ethnic origins (eg, pork is forbidden for Muslims). As an option, you may find it easier to ask your guests to recommend a restaurant. Avoid conversations concerning sex, religion or politics. When entering a Malay house, shoes should be taken off and left outside. It is considered impolite to show the soles of your feet when seated opposite a person. Do not cross your legs, but keep your feet flat on the floor. Use your right hand at all times when giving or receiving. The left hand can be used to support it if necessary. Avoid touching and pointing. If you need to point, use the thumb of your right hand with your other fingers clenched. Public displays of affection such as hugging and kissing are not usual in Brunei. It is not customary to shake hands with a member of the opposite sex. Wait for them to offer first.
Female Dress Foreign visitors should give respect to the Islamic traditions prevalent in Brunei and dress accordingly. The sight of all local Muslim women wearing head-covering scarves (tudongs) may be strange to some, but it is the local way and visitors should follow suit where practicable. Women should at least dress conservatively; plunging necklines and low-back dresses are to be avoided and skirts should be at least below the knee. Care should be taken when crossing legs, so as not to expose the knee. Trousers and mid-calf or long skirts/dresses are the safest option. Arms should be covered; avoid bare shoulders. Three-quarter length o sleeves are ideal. The temperature is fairly constant (26-34 C) as is the humidity (around 90%), so lightweight clothing is essential. However, business premises are also frequently over-air-conditioned.
Alcohol The sale of alcohol is banned, although a non-Muslim is permitted to bring in small amounts of alcohol for personal consumption. It is illegal for hotels to serve alcohol, even with meals, so it is recommended that, should one wish to drink, it is done in private. Bruneians generally respect foreigners’ freedom to consume alcohol “at home” but over-indulgence is to be avoided. Drink drive laws are becoming more strictly enforced by the local police, and failure of a breathalyser test will be viewed very seriously.
Meetings and Presentations
As mentioned above, Bruneians look to build relationships first before they place trust in an individual. This puts a premium on face-to-face interaction, making it both more important and sometimes more difficult to secure appointments and meetings. Arrangements to meet must constantly be followed up. It helps if a local, well-known contact is in the loop, and preferably present at the meeting, to serve as middleman; and as metaphorical note-taker (as elsewhere in Asia, meetings in Brunei often take place without minutes or informal record, leaving follow-up action rather at the discretion of both parties). Lunch meetings are becoming increasingly common, but they are used more as a way to cement good relations than to hammer out details. As in many other countries, the person who proposes such a meeting will pay the bill.
Although the local language is Malay (with some variations from that spoken in Malaysia), and necessary for conversing “on the shop floor”, English is almost universally spoken in business and government circles. Bruneian professionals speak fluent English, making it totally unnecessary to acquire a translator. However, the UKTI team can help you find a translator or interpreter for exceptional cases. Even if you are using an interpreter for the substance of your meeting, a few words of Malay go a long way. Below are some commonly used phrases: English Hello Good day/morning Good evening Goodbye Yes / no Please / thank you That’s all right Excuse me My name is… Malay Hello Selamat Pagi Selamat Malam Selamat Jalan/ Selamat tingal Awu/Inda Tolong/Terima Kasih Tidak Apa Apa Excuse Nama saya
P ronunciation Heh-loh Seh-lah-maht Pah-gee Seh-lah-maht Mah-lahm Seh-lah-maht Jah-lahn/ Se-lahmaht Ten-gahl Ah-woo/Een-dah Toh-lohng/Teh-rri-mah Kah-seh Tee-duck Ah-pah Ah-pah Excuuuse Nah-mah Sah-yah
What are the Challenges?
The “etiquette issues” mentioned above should not prove a barrier or disincentive to anyone interested in building a business relationship over time and able to adapt to local sensitivities. More problematic is the way Brunei’s hierarchical and risk-averse society (which has benign effects on social cohesion and nationhood) translates into the business environment. Brunei is not short of well-educated, energetic and innovative individuals. But they operate within a structure which – in the public sector – is prone to “silos” (slow communication between Ministries), and – even in Brunei’s small private sector – requires messages to go all the way up the chain, sometimes to the very top, before decisions can be taken. This makes doing business “iterative”; more of a continuous conversation than a single transaction. It is also quite usual for there to be a lack of outward communication while the internal processes are in train. A lack of communication does not mean that nothing is happening, but, on the other hand, it could mean precisely that if your business approach has not taken account of the local etiquette. Please note, the High Commission cannot intervene directly in commercial disputes on behalf of UK companies.
How to Invest in Brunei
An overview of the current investment priorities for Brunei can be found on the website of the Brunei Economic Development Board at: http://www.bedb.com.bn/bisop_fdi.html . The government encourages foreign investment in Brunei. New enterprises that meet certain criteria can receive pioneer status, exempting profits from income tax for up to 5 years, depending on the amount of capital invested. The normal corporate income tax rate is 22%. There is no personal income tax or capital gains tax.
If you have a specific export enquiry about the market which is not answered by the information on this report, you may contact: UK Trade & Investment Enquiry Service Tel: +44 (0) 20 7215 8000 Fax: +44 (0) 141 228 3693 Or visit the UKTI ‘Contact Us’ page for further options http://www.ukti.gov.uk/uktihome/contactus.html UK Trade & Investment Brunei Desk 1 Victoria Street London, SW1H 0ET United Kingdom Mike Qureshi Tel: +44 (0)20 7215 4734 Fax: +44 (0)20 7215 8313 Email: [email protected] UKTI Team Bandar Seri Begawan British High Commission 2.01, 2nd Floor, Block D Bangunan Yayasan Sultan Haji Hassanal Bolkiah Jalan Pretty, B.S.B, BS8711 Brunei Darussalam Current Head of UKTI Brunei: Stephen Phillips Tel: +673 222 2231 Email: [email protected]
Business Link: International Trade Business Link’s International Trade pages provide an overview of export basics including licensing, customs procedures, classifying and movement of goods, other regulatory information and export paperwork issues. It also introduces exporters to the UK Trade Tariff. Essential reading for exporters! Country Information: BBC Website: http://news.bbc.co.uk/1/hi/country_profiles/default.stm FCO Country Profile: http://www.fco.gov.uk/en/travel-and-living-abroad/travel-advice-by-country/country-profile/ Culture and communications: CILT – National Centre for Languages – Regional Language Network in your area: http://www.cilt.org.uk/workplace/employer_support/in_your_area.aspx Quintessential culture guides: http://www.kwintessential.co.uk/ Customs & Regulations: HM Revenue & Customs: www.hmrc.gov.uk Import Controls and documentation (SITPRO): http://www.sitpro.org.uk Economic Information: Economist: http://www.economist.com/countries/ Export Control Export Control Organisation: http://www.berr.gov.uk/whatwedo/europeandtrade/strategic-export-control/index.html/strategic-exportcontrol/index.html Export Finance and Insurance: ECGD: http://www.ecgd.gov.uk/