Brunei Seeks to Improve Business Environment, Diversify Economy Ahead of AEC Compliance

Posted by Reading Time: 4 minutes

Brunei has acknowledged the need to diversify its economy away from its current focus on oil and gas industries, particularly with the ASEAN Economic Community soon to be implemented. As such, the government is attempting to foster the creation of new core industries and attract greater foreign investment. The governmental plan “Vision 2035” is part of the official attempt to create a more attractive business environment by developing a stable and economic climate in the country.

Brunei’s economy is still heavily dependent on oil and gas. According to the country’s Minister of Industry and Primary Resources, YB Pehin Dato Hj Yahya, “the oil and gas sector currently makes up close to 67 percent of our Gross Domestic product (GDP); represents close to 90 percent of the government’s revenues; contributes a staggering 96 percent of our exports; but employs less than five percent of our workforce.”

The ASEAN Economic Community (AEC) is intended to facilitate the creation of a single market and production base, partly through the near elimination of inter-region import duties. Nearly 80 percent of the AEC blueprint, a total of 259 different measures, has now been concluded in anticipation of its entry into force by December 2015.

Professional Service_CB icons_2015RELATED: Dezan Shira & Associates’ Pre-Investment and Entry Strategy Advisory

ASEAN – the Association of Southeast Asian Nations – was formed in 1967 and comprises 10 Asian countries as an economic trade bloc. It includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. Collectively, ASEAN represents a market of some 600 million people, with a combined GDP of about US$1.8 trillion. Effectively a trade bloc situated between China and India, ASEAN is the third Asian dragon in terms of its development as an emerging economy.

The government of Brunei believes that the country has much to gain from greater economic integration into the region. Key changes that Brunei has already enacted, or will soon implement, include the following:

  • Updating tariffs to comply with AEC regulations
  • Providing stronger protection for foreign direct investment
  • Enacting a National Competition Law
  • Creating a stable business environment
  • Making business practices more flexible and cost effective

Brunei’s permanent secretary at the Ministry of Foreign Affairs and Trade, Lim Jock Hoi, has stated “there will be more transparent rules and regulations for importers and exporters, as well as access to settlement procedures for when trade disputes arise.”


Asia Briefing Ltd. is a subsidiary of Dezan Shira & Associates. Dezan Shira is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in China, Hong Kong, India, Vietnam, Singapore and the rest of ASEAN. For further information, please email or visit

Stay up to date with the latest business and investment trends in Asia by subscribing to our complimentary update service featuring news, commentary and regulatory insight.

Related-Reading-Asean Book Title

Tax, Accounting, and Audit in Vietnam 2014-2015
The first edition of Tax, Accounting, and Audit in Vietnam, published in 2014, offers a comprehensive overview of the major taxes foreign investors are likely to encounter when establishing or operating a business in Vietnam, as well as other tax-relevant obligations. This concise, detailed, yet pragmatic guide is ideal for CFOs, compliance officers and heads of accounting who need to be able to navigate the complex tax and accounting landscape in Vietnam in order to effectively manage and strategically plan their Vietnam operations.

An Introduction to Tax Treaties Throughout Asia
In this issue of Asia Briefing Magazine, we take a look at the various types of trade and tax treaties that exist between Asian nations. These include bilateral investment treaties, double tax treaties and free trade agreements – all of which directly affect businesses operating in Asia.



The 2015 Asia Tax ComparatorAB 1214 Cover small small
In this issue, we compare and contrast the most relevant tax laws applicable for businesses with a presence in Asia. We analyze the different tax rates of 13 jurisdictions in the region, including India, China, Hong Kong, and the 10 member states of ASEAN. We also take a look at some of the most important compliance issues that businesses should be aware of, and conclude by discussing some of the most important tax and finance concerns companies will face when entering Asia.