Brunei Darussalam has a small but wealthy economy, which is growing at a slow and steady rate. It has remained stable with an average inflation rate of 1.5% over the past twenty years. The people of Brunei Darussalam enjoy a high quality of life with an estimated US$31,000 per capita income – the second highest in the ASEAN region.
Brunei Darussalam’s economy has been dominated by the oil and gas industry for the past 80 years. Hydrocarbon resources account for over 90% of its export and more than 50% of its Gross Domestic Product. Today, Brunei is the fourth largest oil producer in South East Asia and the ninth largest exporter of liquefied natural gas in the world.
However, there is a rising awareness in the country of depleting natural resources and the subsequent need to diversify the economy away from its over-reliance on oil and gas. Plans for the future include upgrading the labour force, reducing unemployment, strengthening the banking and tourist sectors, and further widening the economic base beyond oil and gas.
Brunei Darussalam imports about 80% of its food requirements, with the government subsidising certain staples such as rice, sugar and milk. The government also subsidises housing, electricity, water and oil as well as providing comprehensive medical services and free education through to university level.
Brunei has no central bank and operates a currency board system with the Brunei Dollar (B$) being pegged to the Singapore Dollar, allowing both currencies to be legally interchangeable in Brunei and Singapore.
Brunei Darussalam has a low tariff regime and no capital gains or personal income tax. Under its Investment Incentives Order 2001 prospective investors will also enjoy a wide range of incentives, including up to a possible 20 years exemption from corporate tax; exemption from import duties taxes on raw material, machinery, equipment, component parts, accessories or building structures and adjustment of capital allowance and losses.