Brunei Offshore Company Formation (IBC)

Overview of a Brunei IBC

Brunei offers clients and individuals a comprehensive offshore formation destination. The International Business Companies Order 2000 is the corporate legislation governing company formation.

Located on the island of Borneo in the South China Sea, the nation of Brunei offers the 3rd most protective banking secrecy regulations, full non-disclosure policies, and a relatively unknown offshore industry.

The small state of Brunei boasts of the highest macroeconomic stability in the world (according to Global Competitiveness Report 2010), the third most favourable tax regime in Asia, as well as the highest human development index in the Islamic world. 

Though Brunei is relatively unknown in the world of offshore finance, it offers many offshore financial solutions to the prospective company looking to form a company in the region. Its downsides are that the country does not have a well-developed offshore financial industry, and due to its relatively recent legislation is a relatively unknown jurisdiction.

For more information on Brunei as an offshore tax haven click here.

Table of Contents:

• Overview of a Brunei IBC
• Advantages & Top Uses of a Brunei Offshore Company Formation
• Advantages
• Top Uses
• Key Corporate Features
• Requirements for Incorporation of a Brunei Company
• Taxation of a Brunei Offshore Company
• Corporate Details of a Brunei Company Formation

Advantages & Top Uses of a Brunei Offshore Company Formation

Advantages

• Islamic banking is available (though open only to Muslims)
• The country has signed very few TIEA and DTT’s
• Fixed annual fee for any amount of authorized share capital
• The Director and the Shareholder may be the same individual/entity
• English is widely spoken with the business and financial sectors
• Strict banking secrecy laws
• Secure and stable economy

• Brunei is a small Muslim Sultanate and his little relations with Western countries and is less likely to cooperate with them on any exchange of information
• Was taken off of the blacklist by the OECD several years ago thanks to its efforts to curb money laundering and through its signing of several tax information treaties
• There are no public registry of directors and shareholders that is maintained in Brunei
• Brunei does not require that company accounts be available for public record
• According to the Tax Justice Network, Brunei’s bank secrecy regulations are ranked as being the 3rd most protective in the world after Seychelles and Samoa.

Top Uses

• International Investing Company
• Holding Company
• Trading Company

Key Corporate Features

* First year fee is USD 500 and every year thereafter is USD 400

Requirements for Incorporation of a Brunei Company

It is required that an individual supply:

• Proposed name of the company
• A photocopy of the passport of Director
• A photocopy of the passport of Shareholder
• Submission of the Memorandum and the Articles of Association

Taxation of a Brunei Offshore Company

A Brunei IBC is free from all local taxation. This includes but is not limited to:

• No capital gains tax
• No dividends tax
• No incomes tax
• No transaction fees
• No corporate tax

Corporate Details of a Brunei Company Formation

Anonymity, Confidentiality and Disclosure

There are no requirements for the disclosure of details and private information of Directors, Shareholders or the beneficial owner. All names/details are held confidentially by the registered agent.

All of the company’s financial details are also not publicly available and need not be submitted to authorities, nor do ones accounts need be audited or filed.

There are pieces of banking secrecy legislation inherent in the International Banking Order of 2000. According to Chapter 18 and 19 of the Order, the penalties for breaking the Brunei banking secrecy are imprisonment of up to two years and a fine up to USD 100,000.

Furthermore, a court order is required in order for a bank to disclose any private banking information, which is a rarity and is usually only done if it is seen to be apart of a criminal investigation, as the jurisdiction does not support the foreign governments' attempts at persecuting tax dodgers.

Company Shares

Shares may be issued as registered shares, preferential shares, redeemable shares and shares with or without voting rights and with or without par value. Bearer shares are not allowed.

Required Capital

There is a required minimum capital of USD 1 with a usual authorization of USD 1,000,000. There is no extra capital fee that needs to be paid even if a large authorized capital is adopted. The minimum issued capital is one share

Directors

There is a requirement of one Director for a Brunei IBC. The Director may be an individual or a corporate entity, maybe a resident of any country (except Brunei) and of any nationality. Single-member ownership of an IBC is also available. Details and names of the Director are not open to the public. All details are kept confidential with the local registered agent.

Shareholders

Only one shareholder is required for a Brunei IBC. A shareholder may be an individual or a corporate entity, a resident of any country (besides Brunei) and of any nationality. The details and information of the shareholder are not publically disclosed.

Trading Restrictions

An IBC can not trade or own any real estate within the country, nor can it do business in the insurance, banking, investment or management industry without the proper licence granted from the relevant authorities. Similarly, an IBC cannot open itself to public investment unless it first obtains approval from the Registry.

Principal Corporate Legislation

A Brunei IBC is governed by the International Business Companies Order of 2000.

Type of Law

The legal and administrative system of Brunei is based on Common Law. Islamic Sharia law is also apart of the system that runs parallel to the common law code.

Powers of the Company

An IBC is given the powers to perform all acts and engage in all activities necessary to the attainment of the object of the IBC subject to provisions of the order.

Company Meetings

Meetings of an IBC are not required and they may be held anywhere in the world.

Local Requirements

There must be a local registered office as well as a local secretary. The accounts of the company shall also be kept at the registered office in Brunei.

Company Secretary

A local company secretary is required.

Language of legislation and Corporate Documents

English

Official Language

The official language of Brunei is Malay; although English is widely spoken within the financial and business industries. Chinese is also widely spoken in the country.

Registered Office required

Yes

Audit Requirements

There are no requirements to have accounts audited. It is optional and open to the discretion of the Director or the beneficial owner.

Annual Reporting

An IBC is required to file annual accounts with the Registry.

Exchange Controls

There are no exchange controls nor capital controls in Brunei

Financial Statements required

There are no requirements, however, it is required that financial statements are prepared and are kept within the local registered office in Brunei.

Shelf Companies available

Yes shelf companies are readily available.

Time required to form an offshore company

1-2 weeks

Language of Name

All names must be in English, although other languages can be used though there must be a certified English translation that is sent to the Registry.

Names of Company requiring a special licence or permission

Any name that is similar or is identical to an already existing company or one that suggests patronage to His Majesty the Sultan and Yang Di-Pertuan or that of a member of the Royal Family, the Government, or local authority of Brunei.

All company’s whose names contain the following words must seek the appropriate licence: Royal, Bank, Building, Society,

Insurance, Assurance, Trust Company, Trustee Company, Chamber of Commerce, Chartered, Cooperative, Imperial, Municipal or any word that is similar.

Permitted limited liability suffixes

All company names should end with the word Limited, Corporation, Incorporated, Societe Anonyma, Sociedad Anonima, Berhad, Sendirian Berhad, or their relevant abbreviations.

Access to Double Tax Treaties

There is no access to any Double Taxation treaties for Brunei IBC’s, although the country does have several DTT’s in place with Indonesia, and a limited treaty in place with the UK.

Annual Government Tax

USD 500

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