Transcript STRENGTHENING THE PRIVATE SECTOR THROUGH FOREIGN …

WELCOME
to the Briefing On
New and Amendments to Legislations
Economic Development Board
(Amendment) Order, 2001
Investment Incentives (Amendment)
Order, 2001
Industrial Coordination Order, 2001
Income Tax ( Amendment ) Order
By
Department of Economic Planning And Development
Prime Minister’s Office
Mechanisms
 Reviewing, Enacting & Amending Laws
and Regulations to Improve Investments
Environment through:Increasing Transparency
Strengthening & Widening Institutional
Support
Streamlining Rules and Procedures
Providing Competitive Incentives for
Establishment of Promoted Industries
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Legislations Enacted & Amended
 Economic Development Board
(Amendment) Order, 2001
 Investment Incentives Order, 2001
 Industrial Coordination Order, 2001
 Income Tax ( Amendment ) Order 2001
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Economic Development
Board (Amendment) Order,
2001
EDB (Amendment) Order, 2001
1. Objectives
 To Increase the Effectiveness and Further
Strengthen and Widen the Role of EDB:As an autonomous Statutory Body
Agency Formulating Investment Policies
Agency Promoting Inward & Outward
Investments
Agency Promoting All Other Economic
Activities
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EDB (Amendment) Order, 2001
2. Institutionalising Authorities
 Enhancing EDB’s role through:
Transferring the authority of administering the
Act to the Minister of Industry & Primary
Resources
Empowering the Minister to give directions to
the Board & for the Board to advise the
Minister
Allowing the Board to appoint committees and
to form other agencies
Empowering Employees by delegating its
Functions, Duties & Power (except in certain
financial matters)
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EDB (Amendment) Order, 2001
3. Functions Enhancements
 To Promote Brunei Darussalam as an
Investment Destination
 To Formulate Plans & Policies on
Investments
Incentives
Market Strategies
to Encourage Investments in High Tech &
Skill Intensive Industries
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EDB (Amendment) Order, 2001
3. Functions Enhancements (cont)
 To Promote, Facilitate & Assist in the
Development of Industrial Activity:
To Encourage Upgrading of Skills &
Technology Transfer to Local & Foreign
Investors Through Automation, Training,
R&D Activities
To Support the Development of Local
Entrepreneurs & SME Business Activities
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EDB (Amendment) Order, 2001
4. Activities Enhancements
 To underwrite Industrial Enterprises
Issuance of:
Stocks
Shares
Bonds
Debentures
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EDB (Amendment) Order, 2001
4. Activities Enhancements (cont)
 To Develop & Manage:
Sites & Parks
Estates
Identified Zones
Other Industrial & Business Premises
locally & elsewhere
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EDB (Amendment) Order, 2001
4. Activities Enhancements (cont.)
 To Foster Growth of Service Industries by
Developing Appropriate Infrastructure
Formulating & Implementing
Appropriate Policies, Plans & Support
Programs
 To Offer Assistance to Facilitate the
Implementation & Cooperation of Projects
for New & Existing Firms
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Investment Incentives Order,
2001
•The old Investment Incentives Act
(Cap 97) is being replaced (repealed)
by this Order
•Order to be construed as one with the
Income Tax Act (Cap 35)
Investment Incentives Order, 2001
1. Objectives
 To Promote the Diversification of the Economic
Activities by Providing Tax Based Incentives to
Promoted Activities
 Encourage investment and reinvestment activities
to upgrade technology, undertake research and
development, increase production capacities and
expand markets coverage.
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Investment Incentives Order, 2001
2. Institutional Authority
 Transferring the authority to administer the
act to the Minister of Industry & Primary
Resources
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Investment Incentives Order, 2001
3. FORM OF INCENTIVES
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Relief from 30% corporate tax
Concessionary tax
100% relief of expansion income
100% relief of export profit Tax relief equivalent to ½ of qualified
export income
Corporate tax of between 29 – 10%
Relief from import duties on capital goods and raw materials
100% allowance on fixed capital expenditure incurred within 5 or 11
years
Exemption from 20% withholding tax on interest remitted to overseas
lenders
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Investment Incentives Order, 2001
3. Promoted Enterprise and Companies
 Pioneer Enterprise( incl. Activities in High Tech
Park)
 Expansion of Established Enterprises
 Pioneer Service Enterprises
 Expanding Service Company
 Post Pioneer Company
 Export Enterprise
 Export Service Company
 International Trading Company
 Warehousing & Servicing Company
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Investment Incentives Order, 2001
3. Promoted Activities (cont)
Investment in New Technology Company
Investment in Venture Company
Investment in Overseas Investment Company
Investments in
 added capacities in manufacturing industries,
 niche services,
 research and development activities,
 construction activities,
 sound waste management practice,
 tourism infrastructure
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Investment Incentives Order, 2001
4. Pioneer Entreprise
Objective:
 To encourage the development of commercial scale new
manufacturing and primary industries including High Tech
& R & D activities
Tax incentives
 Corporate Tax relief of 5 to 8 years depending on fixed
capital expenditure
 > B$500,000 <2.5 million – tax relief up to 5 years
 < B$2.5 million – tax relief up to 8 years
 Further extension of tax relief of up to 11 years
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Investment Incentives Order, 2001
4. Pioneer Enterprise (cont’)
Incentive:
 11 years Corporate Tax Relief for Activities Located in
High Tech Park
 Further extension of up to 20 years at the discretion of the
Minister
 Exemption from Custom Duties on Raw Materials &
Capital Goods
 Exemption from Withholding Tax on Interest Remitted to
Overseas Lender
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Investment Incentives Order, 2001
5. Pioneer Service Companies
Objective:
 To encourage the development of new services activities not yet
established on a commercial scale in Brunei Darussalam
Incentives
 8 years Corporate Tax Relief
 Extendible Up to 11 years
 Exemption from Custom Duties on Capital Goods
 Exemption from 20% Withholding Tax on Interest Remitted to
Overseas Lender
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Investment Incentives Order, 2001
6. Post Pioneer Companies
Objective:
 To encourage the post pioneer industries to
undertake reinvestment activities
Incentives
 Concessionary corporate tax (maximum 10%
minimum 29%) for a period of 6 years
 Extension for a period not exceeding 11 years
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Investment Incentives Order, 2001
7. Expanding enterprise
Objective:
 To encourage existing industries to undertake
reinvestment activities and expands production
Incentives
 3 to 5 years Tax relief of expansion income
depending on new Capital Expenditure
 Extension for a period not exceeding 20 years
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Investment Incentives Order, 2001
8. Expanding Service Companies
Objective:
 To encourage existing services industries to undertake
reinvestment activities and expand the scale of its
companies
Incentives
 Relief of 100% expansion income for a Period not
Exceeding 11 years
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Investment Incentives Order, 2001
9. Export enterprise
Objective :
To encourage the production for export
Incentives:
 8 to 15 years Tax Relief of 100% export profit depending on the type
of industry
 8 years for non-pioneer enterprise
 6 years for pioneer enterprises
 Extendible Up to 11 years
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Investment Incentives Order, 2001
9. Export enterprise ( cont)
15 years, if
Enterprise incurred Capital Expenditure more than $50
million
or
Enterprise incurred Capital Expenditure not less than
$500,000 provided
40% paid up capital owned by Citizens & Residents
Activities promote Economic & Technological Development
of Brunei
Tax Relief can be extended on terms & conditions agreed by the
Minister
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Investment Incentives Order, 2001
9. Export enterprise
Conditions for relief:
 Export sales shall not be less than 20% or $20,000 of total
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sales at the first year of assessment
The export sales for subsequent years shall not be less than
$20,000
Unless otherwise stated by the Minister the tax relief will
not be available if the minimum requirements of $20,000 is
satisfied
The Minister may provided relief if the total value of
export is more than $20,000 although less than 20% of
total sales
No export product or produce shall be relanded in Brunei
Darussalam without authorisation
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Investment Incentives Order, 2001
10. Export Service Company
Objective:
Encourage services industries to venture into export market
particularly in BIMP EAGA region
Incentives:
 5 years Tax Relief for qualifying income
 Extendable Up to 11 years
 Another 5 years as long as aggregate tax relief does not
exceed 20 years
 Exemption from Custom Duties on Capital Goods
 Exemption from Withholding Tax on Interest Remitted to
Overseas Lender
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Investment Incentives Order, 2001
11. International Trading Companies
Objective:
Encourage the development of international trading
companies exporting local goods including goods from
small and medium enterprises and and entreport trade.
Incentives:
 8 years Corporate Tax Relief for 50% of qualifying
export income
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Investment Incentives Order, 2001
12. Warehousing & Servicing Company
Objective:
 To support export oriented trading activities, promote the development
of specialized services for export and transshipment activities
Incentives:
 11 years Corporate Tax Relief
 Extendible up to 20 years
Condition for relief:
 Company must shall not acquire any sales or service from any other
person in connection with its trade or business without written
approval of the Minister
 Company must incur fixed capital expenditure of not less than $2 m
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Investment Incentives Order, 2001
13. Investments in New Technology
Company
Objective:
 Encourage holdings
companies to invest in
new
technology companies for the purpose of introducing the
technology into Brunei Darussalam
Incentive:
 Deduction of losses made by new technology company
within qualifying period from eligible holding company
income within 6 years after the qualifying period
“Qualifying period” is a period of 3 years from
commencement day
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Investment Incentives Order, 2001
14. Investment in Venture &
Overseas Investment Companies
Objective:
 Encourage holdings companies to invest in venture capital and
overseas investment companies for the purpose of introducing the
technology into Brunei Darussalam and developing export market
Incentives
 Holding company can offset against its statutory income losses: from sale of its shares in a Venture Company,Technology Investment
Company & Overseas Investment Company made within 3 to 8 years
after the purchase of share
 from the liquidation of Venture Company, Technology Investment
Company & Overseas Investment Company made within 8 years after
purchase of shares
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Investment Incentives Order, 2001
14. Investment in Venture &
Overseas Investment Companies
Eligibility Criteria:
 Holdings
companies must be resident in Brunei
Darussalam
 Invested not less than 60% of its shareholder fund in
Brunei Darussalam
 Holds not less than 30% of share in venture capital,
overseas investment companies and technology investment
company Incentives
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Investment Incentives Order, 2001
15. Investment Allowances
Objective:
 Encouraging investments in added capacities in manufacturing industries,
niche services, research and development, construction industry, recycling of
waste, tourism infrastructure.
Incentives:
 Allowances up to 100% for fixed capital expenditures incurred within 5 years
for :– Manufacture or increased manufacture of any product
– Provision for specialised engineering or technical services
– R&D activities
– Construction Operation
– Recycling domestic & industrial waste
 Allowances up to 100% for fixed capital expenditures incurred within 11
years for:– Promotion of tourist industry
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Investment Incentives Order, 2001
16. Relief from Import Duties For
Pioneer & Export Oriented Companies:Objective:
To reduce the costs of inputs and capital goods thus
enhance competitiveness of pioneer and export oriented
enterprise and companies
Incentives:
 Exemption from Import Duties on Capital Goods incl.
Prefabricated factory or building structure, Intermediate
and Raw Materials
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Industrial Coordination
Order, 2001
Industrial Coordination Order, 2001
1. Objectives
 To Provide for the Coordination & Orderly
Development of Manufacturing Activities
Under One Roof:
To centralise the authority that will issue
licenses for manufacturing activities
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Industrial Coordination Order, 2001
2. General Content
 To achieve main objective:
A council to advise the Minister called “The
Industrial Coordination Advisory Council”
shall be established
All Manufacturing Activities Outside the
Jurisdiction of the Miscellaneous Licenses Act
shall be licensed under this Order
Licensing Officers for Licensing & Enforcing
the Order shall be appointed
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Income Tax Act (Amendment)
Order, 2001
Income Tax ( Amendment ) Order, 2001
Incentives:
Double Deduction on special expenditure
Allows firms to submit application for eligible
expenditure incurred by firms to be double and deducted
from the
profit and loss account submitted to
Comptroller of Income Tax.
Writing down allowance
Allows firm to deduct a certain percentage of the cost of
acquiring patent and know how net profit.
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Income Tax ( Amendment ) Order, 2001
17. Double Deduction( Promotion of
Export)
Objective:
To promote the extensive use of local products and assist resident firms
in promoting products to overseas market particularly in non
traditional markets
Incentive
Double Deduction for Promotion of Export (Expenses related to
Approved Trade Fairs, Exhibition or Trade Missions or Maintenance of
Overseas Trade Office): Expenses for establishing, maintaining or participating in approved
overseas trade fair, exhibition or trade mission
 Expenses for establishing, maintaining or participating in approved
local trade fair
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Income Tax ( Amendment ) Order, 2001
17. Double Deduction( Promotion of
Export) cont
Incentive:
 Expenses for providing services in establishing, maintaining or
participating in approved local and overseas trade fair or mission
 Expenses for maintaining an approved overseas trade office
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Income Tax ( Amendment ) Order, 2001
17. Double Deduction( Promotion of
Export) cont
Incentive:
 Double Deduction for Promotion of Export Development
Expenditure & Certain Advertising Expenses: Export market development expenditure for carrying out
an approved marketing project overseas
 Advertising expenses in respect of advertisements placed
in any approved Brunei publications designed for publicity
overseas
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Income Tax ( Amendment ) Order, 2001
18. R&D Double Deduction
Objective:
To promote firms to continue undertaking the research and
development activities post tax relief period to improve
competitiveness
Incentive:
 Expenditure incurred on approved R&D project undertaken
 directly by a person in manufacturing trade or business or indirectly
by subcontracting to a research and development company
 directly by a person in trade or business for the provider of specified
services or indirectly through a research and development companies
 by to a R&D company
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Income Tax ( Amendment ) Order, 2001
18. R&D Double Deduction
Eligibility criteria:
1. Must be approved by the Minister
2. Specified services are services: which relate to the development of computer programme
 Technology involved in acquiring, storing, processing or distributing
information by use of computers or computers programme
 Technology applied to primary industries
 Medical research and other services activities
3. Minister will specify
 the amount of expenditure
 Conditions for approving R & D projects
 Period for which the deduction is to be allowed
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Income Tax ( Amendment ) Order, 2001
19. Writing Down Allowances for approved
know how of patent
Objective:
To assist firms in acquiring technology and knowhow
needed to improve competitiveness as well as promoting
research and development activities that add value to
existing technology and products.
Incentive:
Writing down allowances of 25% of capital expenditure in
acquiring any approved know how or patents rights for use
in relevant trade or business
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Income Tax (Amendment) Order, 2001
19. Writing Down Allowances for
approved know how of patent
Conditions:
 Allowance can be written down for 4 years after the
expenditure is being made
 Writing down allowances within the 4 assessment years
will be stopped if : The rights expire and are not revived
 Rights are sold
 Part of the rights are sold and the net proceed are more
than the expenditure remain unallowed (75% )
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Thank You
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