Canadian Visit Underlines Brunei's 'Offshore' Pretensions

by Lorys Charalambous, Tax-News.com, Cyprus

12 June 2002

Last week a Trade and Investment Mission from Canada arrived in Brunei Darassalam in an attempt to increase two-way trade and investment between the two countries. The Mission held talks with ministers and government officials from the Ministry of Industry and Primary Resources, as well as prominent private sector business representatives, focusing on the Telecommunications, Financial Services, Education and Energy sectors.

Brunei has been making considerable efforts over the last few years to establish itself as an international financial services centre in order to reduce dependence on oil as a source of wealth, although as one of the richest countries in the world it does not have an imminent problem in that respect.

Brunie starts with the advantage that it already has a well-established financial sector, with banks including HSBC, Standard Chartered, United Overseas Bank, Citibank, Maybank, Baiduri Bank, Tabung Amanah Islam Brunei and the Islamic Bank of Brunei Berhad. The major accounting firms also have a significant presence, along with some 15 law firms.

Brunei says that it is: 'deploying its sovereignty, wealth and human resources in a conservative but assertive manner to establish a jurisdictional environment which will be tax-free, and free from over-regulation.' But the government makes clear that exclusion of money laundering is the first priority in its efforts to establish BIFC as a truly credible and competitive player in the international financial market. The first tranche of legislation enacted for the IFC regime therefore included Money-Laundering and Criminal Conduct (Recovery of Proceeds) measures implemented to international standards.

Other acts governing the establishment and supervision of BIFC include the International Banking Order 2000 (IBO), International Business Companies Order 2000 (IBCO), Registered Agents and Trustees Licensing Order 2000 (RATLO), International Trusts Order 2000 (ITO) and International Limited Partnerships Order 2000 (ILPO). Recently Insurance, Securities and Mutual Fund legislation have also been enacted.

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