Brunei Investment Opportunities 2025–2029: Unveiling Asia’s Hidden Growth Engine

Table of Contents

• Brunei at a Glance: Economic and Political Stability
• Key Growth Sectors: Energy, Technology, and Beyond
• Regulatory Environment: Investment Laws and Incentives
• Taxation and Compliance: What Foreign Investors Must Know
• Foreign Direct Investment Trends: Statistics and Insights
• Navigating Business Setup: Legal Structures and Requirements
• Workforce and Talent: Skills, Education, and Labor Laws
• Infrastructure and Connectivity: Current Projects and Future Plans
• Risks, Challenges, and Mitigation Strategies
• Future Outlook: Projections for Brunei’s Investment Landscape Through 2029
• Sources & References

Brunei at a Glance: Economic and Political Stability

Brunei Darussalam, a small Southeast Asian nation on the island of Borneo, is characterized by notable political stability and a resource-driven economy, both of which play significant roles in shaping its investment climate. The country is an absolute monarchy under Sultan Hassanal Bolkiah, who has ruled since 1967, ensuring policy continuity and a predictable regulatory environment. Brunei’s government has maintained a consistent focus on economic diversification and investor-friendly reforms, driven by the strategic aims of its long-term development blueprint, Wawasan Brunei 2035 (Prime Minister’s Office, Brunei Darussalam).

The economy remains heavily reliant on hydrocarbons, with oil and gas accounting for over 60% of GDP and more than 90% of exports as of 2024. However, with proven reserves and downstream investments, Brunei projects continued energy sector stability at least into the early 2030s. The government actively encourages foreign direct investment (FDI) in sectors such as halal manufacturing, renewable energy, tourism, and logistics, aiming to reduce dependency on hydrocarbons. Key recent events include the expansion of the Brunei Shell Petroleum downstream sector and the operationalization of the Hengyi Industries refinery and petrochemical complex, one of Southeast Asia’s largest foreign investment projects (Ministry of Finance and Economy, Brunei Darussalam).

Brunei’s legal system blends English common law and Islamic Syariah law. For investors, the Investment Incentives Order and the Companies Act offer tax exemptions and 100% foreign ownership in certain sectors, subject to sector-specific restrictions and compliance with national policies. The Brunei Economic Development Board (BEDB) acts as the main agency for investment promotion and facilitation, providing a single window for business registration and incentives (Brunei Economic Development Board). Compliance with labor, environmental, and anti-corruption laws is closely monitored, as Brunei strives to uphold international standards.

Brunei boasts a robust macroeconomic environment: low public debt (around 2% of GDP), high currency stability (the Brunei dollar is pegged to the Singapore dollar), and sovereign wealth reserves managed by the Brunei Investment Agency. The World Bank classifies Brunei as a high-income country, with a 2024 GDP per capita exceeding USD $35,000 (Department of Economic Planning and Statistics, Brunei Darussalam). Looking ahead to 2025 and beyond, Brunei’s economic outlook remains positive, with a stable political system, continued investment in infrastructure, and a measured approach to regulatory modernization expected to support investor confidence.

Key Growth Sectors: Energy, Technology, and Beyond

Brunei’s investment landscape in 2025 is shaped by its ongoing efforts to diversify beyond hydrocarbons, with energy and technology sectors at the forefront. The government’s Vision Brunei 2035 emphasizes sustainable growth and economic diversification, supported by legislative frameworks and incentives designed to attract both foreign and domestic investors.

• Energy Sector: Oil and gas remain the backbone of Brunei’s economy, accounting for over 50% of GDP and 80% of exports. In 2024 and through 2025, the government continues to facilitate exploration and downstream investments, including petrochemicals and liquefied natural gas (LNG) expansion. The Ministry of Energy oversees licensing, compliance, and local participation requirements under the Petroleum Mining Act and related regulations. Recent projects such as the Pulau Muara Besar refinery and petrochemical complex, operated in partnership with foreign entities, highlight the country’s openness to international capital and technology.
• Technology and Digital Economy: The digital sector is prioritized under the Digital Economy Masterplan 2025, aiming to transform Brunei into a Smart Nation. Areas of focus include fintech, e-commerce, and cybersecurity. The Authority for Info-communications Technology Industry of Brunei Darussalam (AITI) regulates sector standards, data protection, and licensing. Notably, incentives such as 100% foreign ownership in certain tech subsectors and tax holidays are available via the Brunei Darussalam Investment Agency and Darussalam Enterprise. Ongoing government investment in digital infrastructure and initiatives such as the Digital Payment Roadmap foster a pro-investment environment.
• Beyond Energy and Tech: Manufacturing, Halal, and Green Industries: The manufacturing sector, especially food processing and pharmaceuticals, benefits from Brunei’s strict halal standards and strategic location. The Ministry of Health and Ministry of Religious Affairs supervise compliance for halal certification, a key credential for export-oriented businesses. Additionally, the country’s commitment to environmental sustainability is reflected in incentives for green tech and eco-friendly manufacturing, with compliance guided by the Department of Environment, Parks and Recreation.

Brunei’s legal environment is investor-friendly, supported by the Attorney General’s Chambers overseeing commercial law, dispute resolution, and investment guarantees. The government’s ongoing reforms and stable macroeconomic policies reinforce positive investor sentiment. As Brunei continues to diversify, the outlook for energy, technology, and related sectors remains strong for 2025 and the following years, with robust compliance regimes and targeted incentives set to attract sustained investment.

Regulatory Environment: Investment Laws and Incentives

Brunei Darussalam offers a stable and investor-friendly regulatory environment, supported by a legal framework that encourages both domestic and foreign investment. The primary legislation governing investment is the Investment Incentives Order 2001, which provides a range of fiscal incentives aimed at stimulating targeted sectors such as manufacturing, services, and high-tech industries. Under this order, qualifying investors may benefit from tax exemptions, reduced import duties, and other facilitative measures. The government, through agencies like the Brunei Economic Development Board (BEDB), actively promotes investment and streamlines the approval process for strategic projects. Investors can also benefit from the ease of establishing businesses, as Brunei has adopted measures to simplify company registration and licensing processes, in line with ongoing reforms to enhance the business climate.

Foreign investors are permitted to hold up to 100% equity in many sectors, with certain strategic industries—such as oil and gas—subject to specific regulations and partnership requirements. Brunei’s legal system is based on English common law, providing a degree of predictability and transparency for investors. The Companies Act (Cap. 39) and Business Names Act (Cap. 92) further regulate company formation and operations, ensuring clear compliance standards. In line with its commitments to the ASEAN Comprehensive Investment Agreement (ACIA) and other regional trade agreements, Brunei continues to harmonize its investment laws to facilitate cross-border investments and protect investor rights.

• Brunei offers Investment Tax Allowance and Pioneer Status incentives, providing up to five years of tax exemption or allowance on capital expenditure for approved projects (Brunei Economic Development Board).
• The Halal industry, digital economy, and downstream oil & gas sectors have been prioritized for investment incentives under the country’s Vision 2035 economic diversification agenda (Ministry of Finance and Economy).
• Brunei maintains a strict anti-corruption regime, with the Anti-Corruption Bureau empowered to investigate and prosecute compliance breaches, reinforcing investor confidence (Anti-Corruption Bureau).
• The government operates a One-Stop Business Support Centre, providing guidance on permits, incentives, and regulatory compliance, further lowering barriers to entry (Brunei Economic Development Board).

Looking ahead to 2025 and beyond, Brunei is expected to maintain its pro-investment stance as it pursues economic diversification. Continued digitalization of regulatory processes, expansion of incentive schemes, and enhanced investor protection mechanisms are anticipated. The government’s commitment to international standards and transparent governance bodes well for both new and existing investors seeking opportunities in Brunei.

Taxation and Compliance: What Foreign Investors Must Know

Brunei presents an appealing investment landscape, underpinned by political stability, a favorable tax regime, and a strategic location within Southeast Asia. For 2025 and the coming years, foreign investors should be acutely aware of the nation’s taxation structure, compliance requirements, and recent regulatory trends.

Corporate Taxation and Incentives
Brunei’s corporate income tax rate remains competitive at 18.5%, among the lowest in the region. However, companies with pioneer status or those investing in promoted sectors may be eligible for additional tax reliefs, exemptions, or tax holidays. There is no value-added tax (VAT) or goods and services tax (GST) imposed in Brunei. Notably, there are also no capital gains, estate, or withholding taxes on dividends and interest paid to non-residents, though certain payments to non-resident contractors may attract withholding obligations under specific circumstances (Revenue Division, Ministry of Finance and Economy).

Personal Income Tax
There is no personal income tax in Brunei. This measure enhances the country’s attractiveness for expatriate professionals and foreign investors seeking to relocate senior staff (Revenue Division, Ministry of Finance and Economy).

Compliance and Reporting Obligations
All companies must maintain proper accounting records and submit annual tax returns within six months after the end of the accounting period. Tax returns are subject to review, and the authorities may require supporting documents. Foreign investors should also be vigilant regarding transfer pricing, as Brunei has begun aligning with international standards to prevent base erosion and profit shifting (BEPS) (Revenue Division, Ministry of Finance and Economy).

Foreign Exchange and Repatriation of Profits
Brunei does not impose exchange controls, allowing investors to freely remit profits, dividends, and capital. This liberal approach, combined with robust banking regulations, facilitates cross-border transactions and ensures ease of doing business (Autoriti Monetari Brunei Darussalam).

Anti-Money Laundering (AML) and Beneficial Ownership
Recent years have seen strengthened AML obligations. Businesses must perform thorough customer due diligence, maintain records, and report suspicious transactions. In 2023, the government introduced enhanced requirements for transparency of beneficial ownership, impacting company registration and ongoing compliance (Autoriti Monetari Brunei Darussalam).

Outlook
Brunei’s government is expected to continue modernizing its tax and compliance frameworks to attract more foreign investment, while also aligning with international best practices. Investors should anticipate gradual tightening of compliance standards, particularly around transparency, anti-avoidance, and digital reporting in the near future.

Foreign Direct Investment Trends: Statistics and Insights

Brunei Darussalam continues to position itself as an attractive destination for foreign direct investment (FDI) in Southeast Asia, with a strategic focus on economic diversification beyond oil and gas. According to the latest data from the Department of Economic Planning and Statistics, FDI inflows in Brunei remained resilient through 2024, with total FDI stock exceeding BND 13 billion. The manufacturing, financial services, and downstream energy sectors have shown notable growth, supported by targeted government incentives and regulatory reforms.

The legislative landscape for FDI is governed primarily by the Investment Incentives Order and the Companies Act, both overseen by the Ministry of Finance and Economy. In recent years, amendments have streamlined company registration and provided enhanced tax relief for qualifying foreign investors. The introduction of the Brunei Darussalam-Guangxi Economic Corridor and new bilateral agreements, such as the Brunei-China Economic and Technical Cooperation, have further stimulated investor confidence.

Key compliance requirements include obtaining approval from the Brunei Economic Development Board (BEDB), adherence to local employment quotas, and compliance with the Employment Order and Industrial Relations Act. Foreign investors are also subject to the Anti-Money Laundering Order and must meet the standards set by the Autoriti Monetari Brunei Darussalam for financial transparency and reporting.

• In 2023, the manufacturing sector accounted for over 40% of new FDI inflows, with notable projects in petrochemicals and food processing.
• Financial services, technology, and green energy projects saw increased interest, reflecting Brunei’s commitment to digital transformation and sustainability goals in line with Wawasan Brunei 2035.
• The establishment of the Darussalam Enterprise’s Business Support Centre has improved the ease of doing business, helping Brunei climb in various global rankings.

Looking ahead to 2025 and beyond, Brunei’s FDI outlook remains positive. Policy continuity, infrastructure upgrades, and new public-private partnerships are expected to drive further diversification. The government’s proactive stance on regulatory reform and regional cooperation, particularly through ASEAN initiatives, is anticipated to attract higher-quality investments and boost knowledge transfer. Ongoing commitments to transparency and streamlined compliance are likely to sustain investor interest in the next several years.

Navigating Business Setup: Legal Structures and Requirements

Investing in Brunei in 2025 requires a clear understanding of the available legal structures, compliance obligations, and recent regulatory developments. The country’s business environment is characterized by streamlined processes and a focus on attracting foreign direct investment (FDI), particularly in sectors outlined in Brunei Vision 2035, such as halal manufacturing, financial services, and technology.

The principal legal structures for investors include sole proprietorships, partnerships, private limited companies (Sendirian Berhad or Sdn Bhd), and branches of foreign companies. The private limited company remains the most common vehicle due to its limited liability, ease of transferability, and eligibility for government incentives. The Registrar of Companies and Business Names Division, Ministry of Finance and Economy oversees company registration. As of 2024, registration can be completed online, typically within one to three working days for compliant applications.

Foreign investors may own up to 100% equity in most sectors, although some strategic areas—such as telecommunications and land—may have restrictions or require specific approvals from sector regulators. Notably, Brunei’s Ministry of Finance and Economy continues to liberalize FDI regulations to foster diversification. The Business Licence Act and Companies Act (Cap. 39) are the key legislative frameworks, with additional requirements for sector-specific activities.

Compliance involves several steps:

• Obtaining a business name approval and company registration through the Registrar of Companies
• Securing a business license from the Business Licensing Authority, if applicable
• Registering for tax with the Revenue Division, Ministry of Finance and Economy—noting that Brunei does not levy corporate or personal income tax on most activities, but does impose a 0.5% stamp duty and a 2.5% payroll tax on foreign workers
• Complying with employment regulations under the Labour Department, including work pass requirements for foreign employees
• Adhering to anti-money laundering (AML) and beneficial ownership disclosure rules enforced by the Autoriti Monetari Brunei Darussalam for relevant sectors

Recent government data shows Brunei registered over 10,000 new companies in 2023, with the majority foreign-owned. The government’s push for digitalization has resulted in faster approval times and more transparent regulatory procedures. Looking ahead, Brunei is expected to further streamline business setup, deepen investor protection, and expand digital compliance systems, making it increasingly attractive for regional and international investors.

Workforce and Talent: Skills, Education, and Labor Laws

Brunei’s workforce and talent landscape is shaped by its strong emphasis on education, skills development, and a regulatory environment designed to support both local employment and foreign investment. With a population of around 450,000, the country’s labor market is small but benefits from a high literacy rate and significant government investment in human capital. In 2025 and the near term, the government continues to prioritize workforce readiness to align with national economic diversification goals.

• Skills and Education: Brunei boasts a literacy rate exceeding 97% and maintains free education through tertiary levels. The Ministry of Education has implemented the Brunei Vision 2035 (Wawasan Brunei 2035), aiming to produce a well-educated, highly skilled workforce. Recent initiatives focus on Technical and Vocational Education and Training (TVET), with the establishment of the Institute of Brunei Technical Education (IBTE) and close collaboration with industry to ensure curriculum relevance. The Universiti Brunei Darussalam and other institutions offer specialized programs tailored to emerging sectors, such as ICT, logistics, and Islamic finance, reflecting the government’s diversification priorities (Ministry of Education, Brunei Darussalam).
• Labor Laws and Compliance: The key legislation governing employment is the Employment Order, 2009, which covers minimum employment standards, wages, contracts, working hours, and termination. The Order is regularly updated to ensure compliance with international standards, and employers must register with the Labour Department. Foreign workers are permitted under a work pass system, subject to quotas and labor market tests favoring local hires. The law also mandates contributions to the Employees Trust Fund (TAP) and Supplemental Contributory Pension (SCP) for both local and foreign employees (Labour Department, Ministry of Home Affairs).
• Key Statistics: Brunei’s official unemployment rate hovered around 8.1% in 2023, with youth unemployment considerably higher. The government is addressing this through the Manpower Planning and Employment Council (MPEC), which coordinates skills matching, training, and job placements, particularly for young Bruneians (Manpower Planning and Employment Council).
• Outlook: For investors, labor market rigidity remains moderate, with improvements expected as the government streamlines work pass processes and expands TVET. While localization policies (such as the iReady apprenticeship program) may affect foreign labor deployment, they also present opportunities for partnerships in workforce development. In the next few years, sectors such as digital technology, eco-tourism, and halal industries are likely to benefit from a growing pool of qualified talent and government incentives for skills transfer.

Infrastructure and Connectivity: Current Projects and Future Plans

Brunei’s infrastructure and connectivity landscape is integral to its investment climate, with significant government efforts focused on modernizing transport, logistics, energy, and digital capabilities. As of 2025, infrastructure development remains a priority within the national agenda, supporting Brunei’s objectives to diversify its economy beyond hydrocarbons and attract foreign direct investment (FDI).

Key ongoing projects include the continued development of the Ministry of Finance and Economy‘s Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) initiatives, which aim to enhance regional transport and trade through improved ports, border crossings, and logistics hubs. The Muara Port Expansion Project is particularly noteworthy, with upgrades designed to increase capacity, streamline customs processes, and position Muara as a regional shipping and transshipment hub.

On the digital front, Brunei’s National Broadband Policy targets nationwide high-speed internet coverage and the evolution toward a digital economy. The rollout of 5G infrastructure, guided by the Authority for Info-communications Technology Industry of Brunei Darussalam, is set to accelerate in 2025, enabling smart city solutions, e-government, and supporting fintech and e-commerce growth. These initiatives are bolstered by the Digital Economy Masterplan 2025, which aims to increase ICT sector contributions to GDP and promote digital literacy.

In terms of compliance and investment facilitation, Brunei offers an investor-friendly regulatory environment. The Public-Private Partnership (PPP) framework, underpinned by regulations from the Ministry of Finance and Economy, continues to attract both local and foreign investors in infrastructure projects. Investors benefit from tax incentives and streamlined approval procedures, especially in designated economic zones such as the Sungai Liang Industrial Park (SPARK) and the Bio-Innovation Corridor.

Statistically, infrastructure spending accounted for approximately 10% of total government expenditure in 2023, with plans to sustain or increase this allocation through 2025 and beyond. Port throughput at Muara Port has seen annual growth rates exceeding 5%, reflecting increased trade and connectivity. Broadband penetration rates surpassed 95% by late 2024, with further improvements anticipated as 5G service expands nationwide Authority for Info-communications Technology Industry of Brunei Darussalam.

Looking ahead, Brunei’s infrastructure and connectivity outlook is positive. Ongoing and planned projects—spanning transport, logistics, and digital networks—are expected to lower operational costs, improve market access, and facilitate cross-border trade. These developments, coupled with robust legal and compliance frameworks, position Brunei as an increasingly attractive destination for infrastructure-related investment in the years to come.

Risks, Challenges, and Mitigation Strategies

Investing in Brunei presents a unique set of risks and challenges, influenced by its regulatory environment, market size, and sociopolitical context. Understanding these factors is critical for robust due diligence and effective risk mitigation, especially as the nation continues its economic diversification efforts in 2025 and beyond.

• Regulatory and Legal Risks: Brunei’s legal system is based on English common law, but with significant influence from Islamic law (Shariah), particularly in areas such as finance, civil conduct, and commercial contracts. The dual legal system can create complexity for foreign investors, especially in sectors where Shariah compliance is mandated. The government maintains strict regulatory controls over foreign investment, including limits on foreign ownership in certain sectors and requirements for local partnership in industries such as retail and land ownership. Investors are advised to review the latest Attorney General’s Chambers of Brunei Darussalam publications for up-to-date legal requirements and recent amendments affecting business operations.
• Market Risks and Economic Concentration: Brunei’s economy remains heavily reliant on oil and gas, which accounted for approximately 57% of GDP and over 80% of exports in 2023, according to the Department of Economic Planning and Statistics. This dependence exposes investors to volatility in global energy prices and potential delays in economic diversification. While the government’s Brunei Vision 2035 aims to expand sectors such as halal manufacturing, finance, and tourism, progress is gradual and may not fully offset hydrocarbons’ dominance in the near term.
• Compliance and Anti-Corruption: Brunei is recognized for its low corruption environment and ranked highly in regional governance indicators. The Anti-Corruption Bureau rigorously enforces anti-bribery laws, and the government has implemented robust anti-money laundering (AML) and counter-terrorism financing (CTF) measures in line with international standards. Nonetheless, foreign investors must ensure compliance with all local regulations, especially in sectors subject to enhanced scrutiny.
• Workforce and Operational Risks: The local workforce is small and wages can be relatively high compared to neighboring markets. Additionally, certain positions and sectors are restricted to Bruneian citizens. Businesses should develop local talent strategies and ensure compliance with the Ministry of Finance and Economy and Ministry of Development guidelines for employment and corporate operations.
• Mitigation Strategies and Outlook: Investors should conduct thorough legal and market due diligence, engage with local partners, and monitor regulatory developments. The government provides various incentives and guarantees for qualified investments, particularly in priority sectors identified under the Brunei Vision 2035 framework. The outlook for 2025-2027 remains cautiously optimistic, with ongoing reforms aimed at improving the business climate, but careful navigation of Brunei’s unique legal and regulatory environment remains essential.

Future Outlook: Projections for Brunei’s Investment Landscape Through 2029

Brunei Darussalam’s investment landscape through 2029 is poised for measured but strategic growth, driven by ongoing economic diversification efforts, regulatory modernization, and strong sovereign resources. As of 2025, the government continues to prioritize sectors such as downstream oil and gas, halal industries, financial services, information and communication technology (ICT), and eco-tourism. The Ministry of Finance and Economy (MOFE) and the Brunei Darussalam Central Bank remain central in stewarding policy stability and macroeconomic resilience.

The Foreign Direct Investment (FDI) inflow in Brunei has demonstrated a positive trajectory since the launch of the Brunei Darussalam Economic Blueprint in 2021, which set clear targets for reducing reliance on hydrocarbons and promoting a sustainable, knowledge-based economy. The Blueprint’s implementation is expected to further mature by 2029, fostering stronger regulatory frameworks and streamlined investment processes. Under the Brunei Darussalam Central Bank’s oversight, FDI policies have been refined to encourage foreign participation, with incentives such as corporate tax reductions, land grants, and full foreign ownership in certain sectors.

Key legislation shaping the investment climate includes the Investment Incentives Order 2001 and its subsequent amendments, which are periodically reviewed to enhance investor protection and procedural efficiency. The Ministry of Finance and Economy continues to update compliance requirements, emphasizing anti-money laundering (AML), counter-terrorism financing (CTF), and robust due diligence as part of broader regulatory alignment with international standards. The Autoriti Monetari Brunei Darussalam (now Brunei Darussalam Central Bank) regularly issues circulars and guidance on compliance obligations for financial institutions and investors.

Statistically, Brunei’s GDP is forecast to grow modestly at around 3–4% annually through 2029, underpinned by anticipated increases in downstream manufacturing and services sectors (Department of Economic Planning and Statistics). The government’s fiscal reserves and the Brunei Investment Agency’s sovereign wealth portfolio provide a stable macroeconomic backdrop, reinforcing investor confidence.

• Ongoing infrastructure improvements and digitalization, led by the Ministry of Development and Ministry of Transport and Infocommunications, are expected to enhance ease of doing business and reduce administrative barriers.
• Environmental, social, and governance (ESG) compliance is set to increase as Brunei aligns with global investment standards, with new frameworks anticipated by 2027.
• Risks remain from commodity price volatility, but diversification measures are expected to buffer economic shocks and broaden investment appeal.

Overall, the outlook to 2029 is cautiously optimistic, shaped by sustained reform, prudent fiscal management, and a commitment to creating a pro-investment environment.

Sources & References

• Prime Minister’s Office, Brunei Darussalam
• Ministry of Finance and Economy, Brunei Darussalam
• Ministry of Energy
• Ministry of Health
• Ministry of Religious Affairs
• Attorney General’s Chambers
• Anti-Corruption Bureau
• Labour Department
• Ministry of Education, Brunei Darussalam
• Manpower Planning and Employment Council