Brunei’s Industrial Parks – Should They Be Part of Your ASEAN Strategy?

Brunei’s expanding network of industrial parks has opened new opportunities for foreign investors with offerings of investment-ready facilities, seamless customs procedures, and one of the region’s most favorable tax regimes. For companies seeking efficiency in re-exports, processing, or energy-linked manufacturing, the country could be an important node in the broader ASEAN supply chain.

However, Brunei may not be the correct choice for all investors. Its small domestic market, limited workforce, and comparatively narrow industrial base mean the country is best suited to businesses that can leverage its geographic position and regulatory simplicity while scaling or seeking consumer demand elsewhere.

Benefits of setting up in Brunei’s industrial parks

Diversifying industry landscape

Brunei’s industrial parks and free trade zone present a compelling case for foreign investors evaluating whether to integrate the country into their supply or production chains. In recent years, Brunei has begun investing in infrastructure to diversify its economy and reduce reliance on hydrocarbons, with positive results. In the 2021 to 2022 financial year, the proportion of the non-hydrocarbon sector contribution to the country’s GDP exceeded that of hydrocarbons for the first time, with notable activity in the retail trade sector.

As part of its investments, the country has developed 22 industrial parks that cover a range of light, medium, and heavy industries. While the relative immaturity of some sectors and the limited size of the domestic market may temper immediate gains, the long-term opportunities for investors are significant, particularly for those in targeted sectors.

At the same time, Brunei is leveraging its legacy as a major hydrocarbons producer to develop new downstream oil and gas industries. Pulau Muara Besar Industrial Park and the Sungai Liang Industrial Park (SPARK) are designed specifically to support downstream petrochemicals and energy-intensive manufacturing, with potential outputs ranging from acetic acid and caprolactam to cyclohexane and ethylene vinyl acetate. These inputs may in turn help to feed a variety of industries, such as pharmaceuticals, textiles, plastics, food additives, and agriculture.

Beyond energy, the sectoral focus of Brunei’s industrial parks extends to four other priority areas: food processing (in particular halal food), information and communications technology (ICT), services, and tourism. Utilities and infrastructure are aligned with these industries, giving foreign investors the benefit of tailored support. Food producers, for example, can leverage Brunei’s strong international reputation for halal certification, while ICT and service firms benefit from stable governance and a predictable regulatory environment.

Strategic location and streamlined customs procedures

Situated on the coast of the South China Sea on the island of Borneo, Brunei enjoys a strategic position at the heart of Southeast Asia and along the East-West maritime trade route. This location provides direct access to major regional markets and easy connectivity to the rapidly growing economies of ASEAN, making it an ideal base for export-oriented activities.

The country’s industrial zones are primarily located in the northeast, near Muara Port and Brunei International Airport, allowing companies to efficiently move goods and integrate seamlessly into global supply chains. Brunei’s participation in key trade agreements, including the ASEAN Free Trade Area (FTA), ASEAN-China FTA, the RCEP, and the CPTPP, means it has largely duty-free access to a large network of countries, reinforcing its position as a gateway for trade and investment across the Asia-Pacific.

The country also offers streamlined customs procedures designed to minimize administrative burdens and facilitate trade. The Brunei Darussalam National Single Window (BDNSW) provides a fully digitized platform for customs declarations and licensing, allowing most goods to be imported and exported with ease, although safeguards are in place for certain restricted goods. This system ensures that businesses benefit from faster processing times, greater transparency, and reduced costs.

Brunei’s CPTPP commitments go even further, with member countries agreeing to simplified customs arrangements such as pre-arrival electronic submissions, clearance of goods without unnecessary warehousing, and expedited release within 48 hours of arrival where requirements are met.

Major Industrial Parks in Brunei
Park	Area/location	Industries/functions	Utilities
Terunjing Industrial Park	95 hectares   8km to Brunei International Airport   22km from Muara Port.	Free trade zone.   Light-medium industries.	Platform levelled on Zone 1, gravel roads, and water supply.
Pulau Muara Besar Industrial Park	1057 hectares   24km to  Brunei International Airport   4km to Muara Port	Special industries.   Petrochemicals and supporting activities (integrated marine supply base, ship building, etc.)	Bridge to Pulau Muara Besar. Main road across Pulau Muara Besar Island.
Salambigar Industrial Park	121 hectares   11km to Brunei International Airport   20km to Muara Port	Light-medium industries.   Food, pharmaceuticals, and cosmetics.	Prepared site with connection to utilities and road access.
Bio-Innovation Corridor Industrial Park	194 hectares   13km to Brunei International Airport   32km to Muara Port	Light-heavy industries.   Food and Pharmaceuticals.   High-tech industries.	Electrical substation, telecom, water connection, and wastewater management are readily available.
Salar Industrial Park	39.5 hectares   18km to Brunei International Airport   9km to Muara Port	Light industries and services.	Readily prepared site with connection to utilities and road access (electrical supply, telecom (fiber-optic), water connection, and wastewater management).
Anggerek Desa Tech Park	16 hectares   3km to Brunei International Airport   24km to Muara Port	Light industries.   High-tech industries.	Utilities readily available.   Fiber-to-the-home (FTTH) connectivity.
Serasa Industrial Park	66 hectares   21km to Airport   3km to Muara Port	Light-medium industries.   Export-oriented industries.	Utilities Readily prepared site with connection to utiities and road access (electrical supply, telecom, water connection and waste water management).
Source: Brunei Economic Development Board

Tax benefits

Brunei offers a highly attractive tax regime that makes it a competitive destination for business in ASEAN. The country applies a flat corporate income tax rate of 18.5 percent, the lowest in the region after Singapore. However, investors should note that the corporate tax rate for profits derived from the exploration or production of oil and gas is 55 percent.

Brunei also stands out for the simplicity of its tax system. There is no personal income tax, and companies are not subject to export, sales, payroll, or manufacturing taxes. Only businesses operating under the Income Tax Act 1949 are liable for corporate tax, reducing administrative burdens and creating a transparent, predictable environment for investment.

The country also provides targeted incentives to encourage strategic industries and expansion. Pioneer Status companies enjoy exemptions from corporate income tax, as well as import duties on machinery and raw materials, for up to 11 years. Established enterprises can receive tax relief for up to 20 years when located in a Hi Tech Park, while foreign loans for productive equipment benefit from exemptions on withholding tax for interest payments.

Limitations to operations in Brunei

When considering whether to expand operations to Brunei, it is important to evaluate some of the factors that could limit business activities in the country. Chief among these is the small domestic market. Although Brunei enjoys one of the highest GDP per capita levels in Southeast Asia, with the IMF projecting nearly US$35,000 in 2025, its total population remains under half a million. This creates limited local demand, meaning Brunei is not a significant consumer market in its own right. As such, operations in the country tend to be most beneficial for export-oriented businesses, whether re-exporting goods through Brunei’s trade corridors or undertaking processing and manufacturing activities for shipment abroad.

The small population also translates into a limited workforce, restricting economies of scale for labor-intensive industries. Brunei is by far the smallest country in ASEAN, and its workforce is modest compared to its neighbors. While the labor force is relatively well educated, with over half having attained secondary education and 25.5 percent having attained tertiary education, there were only around 12,800 people employed in manufacturing in 2023, according to the Labour Force Survey 2023. The majority of the population works in public administration or retail, leaving a comparatively narrow pool of talent for other sectors.

This shortage is partially offset by a sizeable foreign workforce, which accounted for 28.7 percent of total employment in 2024. However, hiring foreign workers requires navigating a quota system and securing approvals from the Commissioner of Labour, as well as work permits for foreign staff, adding compliance burdens for investors. While exemptions exist for workers from Malaysia and Singapore, the process still presents challenges for firms that rely heavily on imported labor.

In addition to a limited workforce, Brunei also faces constraints in infrastructure. Despite ongoing investments in its industrial parks, the country’s infrastructure base outside of the oil and gas sector remains limited, particularly in comparison with Malaysia, which has developed a far more diversified set of industrial zones. For investors, this means that Brunei is best suited for specific types of industries aligned with its strategic advantages, rather than as a broad-based industrial hub.

Finally, while Brunei is recognized for its efficient regulatory environment, businesses must still align with local laws and compliance requirements, underscoring the need for careful planning and structuring. Regulatory approvals can be time-consuming, particularly when they involve multiple agencies, and companies must navigate sector-specific rules in addition to general business regulations

Which business models fit best

Ultimately, whether Brunei is the right choice for expansion depends largely on a company’s industry focus and strategic positioning. The small size of the domestic consumer market means Brunei is not well-suited for businesses seeking new demand, but it is highly attractive for companies focused on exports and re-exports. For trading firms, the logistics advantages of the industrial zones provide seamless access to regional and global markets, supported by free trade agreements and streamlined customs procedures.

The situation for manufacturing is more nuanced and requires sector-specific considerations. Brunei’s industrial parks offer scalable facilities, from ready-built factories to custom-developed land plots, making it easier for light processing and assembly operations to establish quickly. Industries that require reliable utilities, such as pharmaceuticals and food processing, benefit from the country’s stable energy supply and investment in infrastructure, though labor constraints must be carefully considered. Energy-linked businesses, particularly in hydrocarbons and petrochemicals, are especially well-positioned given Brunei’s longstanding expertise and integration into global energy value chains.

Brunei’s tax regime also creates opportunities for companies seeking to establish regional headquarters or service centers. The low corporate tax rate can deliver significant efficiencies. However, these models are best suited to firms that do not require large-scale staffing, since the limited labor pool may present challenges for operations that depend on high headcounts.

Industry Fit for Brunei’s Industrial Parks
Industry/operation	Fit in Brunei’s industrial parks	Rationale	Possible industrial parks
Re-export & trading firms	Strong fit	Customs efficiency, proximity to Muara Port and airport, ASEAN re-export hub potential.	Terunjing Industrial Park (Free Trade Zone, close to airport/port), Serasa Industrial Park (export-oriented), Kuala Lurah Industrial Park (logistics focus)
Light manufacturing & processing	Medium fit	Some availability of infrastructure and ready-built factories, but suitability depends on workforce and supply chain needs.	Salar, Beribi, Mulaut, Lumapas, Bengkurong, Mumong, Pekan Belait, Serambangun, Lambak Kanan West, Salambigar, Lambak
Oil & gas/petrochemicals	High fit	Direct integration into Brunei’s established energy sector, mature infrastructure, and supply chains.	Pulau Muara Besar Industrial Park (petrochemicals, shipbuilding), Sungai Liang Industrial Park (SPARK, downstream O&G), Bukit Panggal Industrial Park (energy-intensive manufacturing)
Regional HQ / service centers	Conditional fit	Attractive for tax efficiency and stability, but a limited labor pool and a smaller domestic market may constrain scale.	Anggerek Desa Tech Park (ICT, high tech services), Bio-Innovation Corridor (pharma, biotech services), Pekan Belait Industrial Park (services/manufacturing mix)

When to choose Brunei over regional alternatives

For investors weighing Brunei against other ASEAN destinations, consider that the country’s key advantages lie in simplicity and predictability. Brunei offers one of the most straightforward tax regimes in the region, with no personal income tax and streamlined customs procedures. For companies that prioritize low compliance risk, predictable regulation, and cost-efficient trade facilitation, Brunei can be a strong alternative to more complex jurisdictions.

On the other hand, companies that require large workforces, advanced supporting industries, or the scale of an established regional hub may find Singapore, Malaysia, or Indonesia better suited to their needs. Brunei’s small domestic market and limited infrastructure outside of hydrocarbons mean it cannot offer the same breadth of resources or labor pool as its larger neighbors, which are significant limitations to any industry requiring scalability.

However, some investors can also choose to adopt a hybrid model, leveraging Brunei’s free trade zone and industrial parks for logistics and processing while situating their regional headquarters in larger economies to access a larger workforce and a more mature ecosystem.

Steps before committing to Brunei

Before committing any capital to Brunei, investors should undertake a thorough assessment of their supply chains and customer base to determine whether the country’s location lowers logistics costs or introduces additional distance. Mapping where inputs and outputs will flow is essential, particularly for re-exporters and manufacturers with complex regional networks.

It is equally important to assess the regulatory environment specific to the intended industry. Brunei’s policies are highly supportive of energy-linked sectors, but non-energy industries face varying levels of oversight and incentive alignment. Comparing Brunei’s incentive packages with those available in competing ASEAN free trade zones can help to clarify the opportunity cost. Finally, running a scenario model that balances costs, compliance obligations, and logistics efficiencies can provide a realistic picture of whether Brunei is the optimal choice or part of a wider regional strategy.

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