Dato Mohd Amin Liew Abdullah, Deputy Minister, Ministry of Finance; and Chairman, Brunei Economic Development Board (BEDB): Interview

Dato Mohd Amin Liew Abdullah, Deputy Minister, Ministry of Finance; and Chairman, Brunei Economic Development Board (BEDB)

Interview: Dato Mohd Amin Liew Abdullah

What are your expectations in terms of long-term inflows of foreign direct investment (FDI)?

DATO MOHD AMIN LIEW ABDULLAH: Over the last few years we have attracted interest from various international firms to invest in Brunei Darussalam, notably from Canada, China, Japan, Malaysia, Taiwan and Turkey. These FDI projects, mainly in export-oriented industries, have been successfully implemented and are currently in commercial operations. There are a further six FDI projects currently in the implementation stage. These projects not only provide spin-off opportunities for local businesses in providing support services to these FDI companies, they also provide opportunities for meaningful employment for the local population.

The government, through the BEDB, will make continuous efforts to attract foreign investments. As a country it is important to understand our strengths and weaknesses so that we can capitalise on our strengths and attract those investments that we believe would bring benefits to the economy and create more meaningful jobs for the population. In order to grow and diversify the economy, Brunei Darussalam will focus its long-term efforts on attracting FDI in prioritised clusters within the non-oil-and-gas sectors, with an emphasis on export-oriented manufacturing and services with good market prospects and potential to bring about value-added activities and economic development to the country.

How does Brunei Darussalam differ from neighbouring countries in terms of providing an environment conducive to private investments?

ABDULLAH: In creating a more conducive business environment and increasing our attractiveness for FDIs, Brunei Darussalam offers a comprehensive package of value propositions and incentives. Apart from offering a stable macroeconomic environment, access to key markets and a sound legal and regulatory framework, Brunei Darussalam offers a favourable tax environment. There is no personal income, sales, payroll or capital gains tax. Manufacturing tax is further made attractive with the ability for companies to apply for pioneer status and be exempt from corporate income tax and import duties on raw materials and machinery for a period of eight to eleven years for strategic industries. Additionally, companies established in Brunei Darussalam are permitted to have 100% foreign ownership.

Furthermore, Brunei Darussalam provides industrial parks dedicated towards housing FDI projects, prepared and installed with the required utilities, such as power, water and telecommunications. These industrial parks are strategically located within close proximity to the airport and ports, which helps to reduce logistics costs and delivery time for export-oriented businesses.

On top of these incentives, a FDI fast-track system has also recently been put in place to facilitate speedy approvals from various government agencies in a coordinated, streamlined and expedited manner.

Is there scope for private equity funds to invest in specific local businesses?

ABDULLAH: Of course foreign private equity firms are welcome in Brunei Darussalam. Indeed, they can look into the existing businesses already operating in the country and understand whether some of these companies have the potential to grow, both domestically as well as internationally.

Private equity funds are certainly another source of financing, which offer an alternative to traditional financing services. Private equity funds generally come in and provide capital along with technology transfer and, at the same time, introduce best corporate practices that improve the overall performance of the companies. In return, the private equity firms will generate returns for themselves through their investments in the companies. It is a win-win situation.

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Dato Mohd Amin Liew Abdullah

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The Report: Brunei Darussalam 2016

Economy chapter from The Report: Brunei Darussalam 2016