Doing Business 2020 Brunei Darussalam Economy Profile Brunei Darussalam Page 1 Doing Business 2020 Brunei Darussalam Economy Profile of Brunei Darussalam Doing Business 2020 Indicators (in order of appearance in the document) Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality control and safety mechanisms in the construction permitting system Getting electricity Procedures, time and cost to get connected to the electrical grid, and the reliability of the electricity supply and the transparency of tariffs Registering property Procedures, time and cost to transfer a property and the quality of the land administration system Getting credit Movable collateral laws and credit information systems Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance Paying taxes Payments, time, total tax and contribution rate for a firm to comply with all tax regulations as well as postfiling processes Trading across borders Time and cost to export the product of comparative advantage and import auto parts Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the legal framework for insolvency Employing workers Flexibility in employment regulation and redundancy cost Page 2 Doing Business 2020 Brunei Darussalam About Doing Business The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the subnational and regional level. The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle. Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also measures features of employing workers. Although Doing Business does not present rankings of economies on the employing workers indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business, it does present the data for these indicators. By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time, Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy. In addition, Doing Business offers detailed subnational studies, which exhaustively cover business regulation and reform in different cities and regions within a nation. These studies provide data on the ease of doing business, rank each location, and recommend reforms to improve performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region and with the 190 economies that Doing Business has ranked. The first Doing Business study, published in 2003, covered 5 indicator sets and 133 economies. This year’s study covers 11 indicator sets and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian Federation and the United States) where Doing Business also collected data for the second largest business city. The data for these 11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving the regulatory environment for business around the world. To learn more about Doing Business please visit doingbusiness.org Page 3 Doing Business 2020 Brunei Darussalam Ease of Doing Business in DB RANK DB SCORE Region East Asia & Pacific Brunei Darussalam Income Category High income 66 Population 428,962 70.1 City Covered Bandar Seri Begawan Rankings on Doing Business topics - Brunei Darussalam 1 16 31 54 59 66 90 128 144 149 Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving a with Electricity Property Credit Minority Taxes across Contracts Insolvency Business Construction Investors Borders Permits Topic Scores 94.9 73.6 87.7 50.7 100.0 40.0 74.0 58.7 62.8 58.2 Starting a Business (rank) 16 Getting Credit (rank) 1 Trading across Borders (rank) 149 Score of starting a business (0-100) 94.9 Score of getting credit (0-100) 100 Score of trading across borders (0-100) 58.7 Procedures (number) 3.5 Strength of legal rights index (0-12) 12 Time to export Time (days) 5.5 Depth of credit information index (0-8) 8 Documentary compliance (hours) 155 Cost (number) 1.1 Credit registry coverage (% of adults) 76.8 Border compliance (hours) 117 Paid-in min. capital (% of income per capita) 0.0 Credit bureau coverage (% of adults) 0.0 Cost to export Documentary compliance (USD) 90 Dealing with Construction Permits (rank) 54 Protecting Minority Investors (rank) 128 Border compliance (USD) 340 Score of dealing with construction permits (0-100) 73.6 Score of protecting minority investors (0-100) 40.0 Time to export Procedures (number) 20 Extent of disclosure index (0-10) 4.0 Documentary compliance (hours) 132 Time (days) 83 Extent of director liability index (0-10) 8.0 Border compliance (hours) 48 Cost (% of warehouse value) 1.8 Ease of shareholder suits index (0-10) 8.0 Cost to export Building quality control index (0-15) 12.0 Extent of shareholder rights index (0-6) 0.0 Documentary compliance (USD) 50 Extent of ownership and control index (0-7) 0.0 Border compliance (USD) 395 Getting Electricity (rank) 31 Extent of corporate transparency index (0-7) 0.0 Score of getting electricity (0-100) 87.7 Enforcing Contracts (rank) 66 Procedures (number) 5 Paying Taxes (rank) 90 Score of enforcing contracts (0-100) 62.8 Time (days) 25 Score of paying taxes (0-100) 74.0 Time (days) 540 Cost (% of income per capita) 36.7 Payments (number per year) 5 Cost (% of claim value) 36.6 Reliability of supply and transparency of tariff index (0-8) 7 Time (hours per year) 53 Quality of judicial processes index (0-18) 11.5 Total tax and contribution rate (% of profit) 8.0 Registering Property (rank) 144 Postfiling index (0-100) 0.0 Resolving Insolvency (rank) 59 Score of registering property (0-100) 50.7 Score of resolving insolvency (0-100) 58.2 Procedures (number) 7 Recovery rate (cents on the dollar) 47.2 Time (days) 298.5 Time (years) 2.5 Cost (% of property value) 0.6 Cost (% of estate) 3.5 Quality of the land administration index (0-30) 17.0 Outcome (0 as piecemeal sale and 1 as going 0 concern) Strength of insolvency framework index (0-16) 10.5 Page 4 Doing Business 2020 Brunei Darussalam Starting a Business This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city. To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and formally operate a company To make the data comparable across economies, several assumptions about the business and the (number) procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes. • Preregistration (for example, name verification or reservation, notarization) The business: • Registration in the economy’s largest business city -Is a limited liability company (or its legal equivalent). If there is more than one type of limited • Postregistration (for example, social security registration, liability company in the economy, the limited liability form most common among domestic firms is company seal) chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office. • Obtaining approval from spouse to start a business or to leave -Operates in the economy’s largest business city. For 11 economies the data are also collected for the home to register the company the second largest business city. • Obtaining any gender specific document for company -Performs general industrial or commercial activities such as the production or sale to the public of registration and operation or national identification card goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily Time required to complete each procedure (calendar days) polluting production processes. • Does not include time spent gathering information -Does not qualify for investment incentives or any special benefits. -Is 100% domestically owned. • Each procedure starts on a separate day (2 procedures cannot -Has five business owners, none of whom is a legal entity. One business owner holds 30% of the start on the same day) company shares, two owners have 20% of shares each, and two owners have 15% of shares • Procedures fully completed online are recorded as ½ day each. -Is managed by one local director. • Procedure is considered completed once final document is -Has between 10 and 50 employees one month after the commencement of operations, all of them received domestic nationals. • No prior contact with officials -Has start-up capital of 10 times income per capita. -Has an estimated turnover of at least 100 times income per capita. Cost required to complete each procedure (% of income per -Leases the commercial plant or offices and is not a proprietor of real estate. capita) -Has an annual lease for the office space equivalent to one income per capita. • Official costs only, no bribes -Is in an office space of approximately 929 square meters (10,000 square feet). -Has a company deed that is 10 pages long. • No professional fees unless services required by law or commonly used in practice The owners: Paid-in minimum capital (% of income per capita) -Have reached the legal age of majority and are capable of making decisions as an adult. If there • Funds deposited in a bank or with third party before registration is no legal age of majority, they are assumed to be 30 years old. or up to 3 months after incorporation -Are in good health and have no criminal record. -Are married, the marriage is monogamous and registered with the authorities. -Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population. Page 5 Doing Business 2020 Brunei Darussalam Starting a Business - Brunei Darussalam Standardized Company Legal form Private Limited Company Paid-in minimum capital requirement No minimum City Covered Bandar Seri Begawan Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Procedure – Men (number) 3 6.5 4.9 1 (2 Economies) Time – Men (days) 5 25.6 9.2 0.5 (New Zealand) Cost – Men (% of income per capita) 1.1 17.4 3.0 0.0 (2 Economies) Procedure – Women (number) 4 6.6 4.9 1 (2 Economies) Time – Women (days) 6 25.7 9.2 0.5 (New Zealand) Cost – Women (% of income per capita) 1.1 17.4 3.0 0.0 (2 Economies) Paid-in min. capital (% of income per capita) 0.0 3.5 7.6 0.0 (120 Economies) Figure – Starting a Business in Brunei Darussalam – Score 85.3 95.0 99.5 100.0 Procedures Time Cost Paid-in min. capital Figure – Starting a Business in Brunei Darussalam and comparator economies – Ranking and Score DB 2020 Starting a Business Score 0 100 94.9: Brunei Darussalam (Rank: 16) 86.4: Bhutan (Rank: 103) 83.9: Regional Average (East Asia & Pacific) 83.3: Malaysia (Rank: 126) 81.2: Indonesia (Rank: 140) 71.3: Philippines (Rank: 171) Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators. Page 6 Doing Business 2020 Brunei Darussalam Figure – Starting a Business in Brunei Darussalam – Procedure, Time and Cost Time (days) Cost (% of income per capita) 6 0.7 0.6 Cost (% of income per capita) 5 0.5 4 Time (days) 0.4 3 0.3 2 0.2 1 0.1 0 0 1 2 3 *4 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 7 Doing Business 2020 Brunei Darussalam Details – Starting a Business in Brunei Darussalam – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 APPLIES TO WOMEN ONLY: Obtain permission from husband to leave home in order to 1 day no charge start a business Agency : Domicile According to the Islamic Family Law 61, subject to Hukum Syara’ and confirmation by the Court, a wife shall not be entitled to maintenance when she is nusyuz or unreasonably refuses to obey the lawful wishes or commands of her husband, including...(b) when she leaves her husband’s home against his wishes. 2 Submit incorporation documents and pay registration fees 2 days BDN 300 (flat fee for Agency : Registry of Companies and Business Names Division, Ministry of Finance registering an industrial Registration is done at www.roc.gov.bn. As of May 2017, the online system has been enhanced to company) allow for instant verification of the company name. The system automatically generates a response if the name is unique. Once the proposed company name is verified and available to be used, entrepreneurs can proceed to the fill in online application form and submit required documents. The Registry of Companies issues a certificate of incorporation, two certified copies of the memorandum and articles of association, and registration forms for the Employees Provident Fund and the Collector of Income Tax. The Registry automatically notifies the Collector of Income Tax of the company’s registration. The documents required for incorporation are: - Identification documents - Emails and contact information for each person - Consent to act as director form - Form X (list of directors) - Memorandum and Articles of Association signed by all members. The registration documents are sent in electronic version, typically on the next business day from submitting the application. 3 Make a company seal or stamp 3 days BND 185 Agency : Seal-making shop There has been a recent reform that company's common seal is not required. This is reflected in the company's Article of Association; the clause for adopting a common seal is removed. For any company that existed pre-reform, company must amend the Articles of Association to remove the clause via shareholder's resolution. For new incorporated companies, the company's AOA simply exclude the relevant clause before registering. Amendment can be found in Companies Act (Amendment)(No 2) Order, 2014 4 Register for Employees Provident Fund 1 day, simultaneous with no charge Agency : Provident Fund previous procedure Once the company successfully incorporated, the information will be automatically forwarded to the Employees Provident Fund (EPF) system. It is no longer required submit hard copy of documents (certificate of incorporation, form X, ID cards) to register the company with EPF. Once registrar submits certificate to EPF, the EPF sends an e-mail to directors with the details of procedures and requirements (e.g., guidelines on how to monitor contributions). After that, the company must complete the registration online at tap.com.bn and obtain the account number. Companies must also register the employees with EPF, and pay relevant contributions. Registration of employees is done online at tap.com.bn, and this can be done online. To register employees, it is required to provide name and salary of each person. The identity cards of all employees as well as the employment contracts should be presented to the TAP counter in order to finalize employees' registration and be able to make contributions. If the employee already has TAP and SCP no, the registration will be automatically updated once information is provided. If the employee is new to the workforce (i.e., with no prior TAP and SCP no), usually, registration is completed on the following working day. Applies to women only. Takes place simultaneously with previous procedure. Page 8 Doing Business 2020 Brunei Darussalam Dealing with Construction Permits This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse (number) To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used. • Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates The construction company (BuildCo): • Submitting all required notifications and receiving all necessary - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest inspections business city. For 11 economies the data are also collected for the second largest business city. • Obtaining utility connections for water and sewerage - Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects • Registering and selling the warehouse after its completion or engineers. BuildCo is not assumed to have any other employees who are technical or licensed Time required to complete each procedure (calendar days) experts, such as geological or topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse upon its • Does not include time spent gathering information completion. • Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule The warehouse: - Will be used for general storage activities, such as storage of books or stationery. • Procedure is considered completed once final document is received - Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be • No prior contact with officials located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita. Cost required to complete each procedure (% of income per - Will have complete architectural and technical plans prepared by a licensed architect. If capita) preparation of the plans requires such steps as obtaining further documentation or getting prior • Official costs only, no bribes approvals from external agencies, these are counted as procedures. - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory Building quality control index (0-15) requirements). • Quality of building regulations (0-2) The water and sewerage connections: • Quality control before construction (0-1) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water • Quality control during construction (0-3) delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control after construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow • Liability and insurance regimes (0-2) of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and • Professional certifications (0-4) a peak wastewater flow of 1,136 liters (300 gallons) a day. - Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection. Page 9 Doing Business 2020 Brunei Darussalam Dealing with Construction Permits - Brunei Darussalam Standardized Warehouse Estimated value of warehouse BND 2,265,748.80 City Covered Bandar Seri Begawan Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Procedures (number) 20 14.8 12.7 None in 2018/19 Time (days) 83 132.3 152.3 None in 2018/19 Cost (% of warehouse value) 1.8 3.2 1.5 None in 2018/19 Building quality control index (0-15) 12.0 9.4 11.6 15.0 (6 Economies) Figure – Dealing with Construction Permits in Brunei Darussalam – Score 40.0 83.6 90.9 80.0 Procedures Time Cost Building quality control index Figure – Dealing with Construction Permits in Brunei Darussalam and comparator economies – Ranking and Score DB 2020 Dealing with Construction Permits Score 0 100 89.9: Malaysia (Rank: 2) 73.6: Brunei Darussalam (Rank: 54) 70.0: Regional Average (East Asia & Pacific) 70.0: Philippines (Rank: 85) 68.9: Bhutan (Rank: 91) 66.8: Indonesia (Rank: 110) Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators. Page 10 Doing Business 2020 Brunei Darussalam Figure – Dealing with Construction Permits in Brunei Darussalam – Procedure, Time and Cost Time (days) Cost (% of warehouse value) 0.8 80 0.7 70 Cost (% of warehouse value) 0.6 60 Time (days) 0.5 50 40 0.4 30 0.3 20 0.2 10 0.1 0 0 1 2 *3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 11 Doing Business 2020 Brunei Darussalam Figure – Dealing with Construction Permits in Brunei Darussalam and comparator economies – Measure of Quality 16 13.8 14 13.0 13.0 12.0 12.0 Index score 12 10 9.4 8 6 4 2 0 Brunei Bhutan Indonesia Malaysia Philippines East Darussalam Asia & Pacific Details – Dealing with Construction Permits in Brunei Darussalam – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Obtain a copy of the survey plan 1 day BND 15 Agency : Survey Department A survey plan is a mandatory document that must be presented when requesting a building permit. 2 Land Surveyor validates the survey plan and draws the topographical map 7 days BND 3,225 Agency : Private Land Surveyor A land surveyor is hired to check the accuracy of the copy of the survey map and confirm that the boundaries of the land provided in the copy of the survey plan are accurate. The report prepared by the Land surveyor will enable the architect to properly and accurately design the building. At the same time, the land surveyor will also draw the topographical survey of the land. 3 Obtain a geotechnical study/soil test 7 days BND 2,500 Agency : Private Firm A soil test is performed to determine the suitability of the soil and assess whether it can accommodate the construction project. I t also help in identifying the types of soil and also test the strength of the soil. 4 Hire an accredited checker to check compliance of the building plans 1 day BND 16,993 Agency : Private According to the Building Control Order (2014) and Building Control Regulations (2014), an independent accredited checker must be hired by BuildCo. The independent checker has the responsibility to verify compliance of building plans with regulations. Engineering drawings are submitted to the checker for review. Architectural drawings.are only reviewed by the in-house engineer. 5 Hire a resident technical officer to conduct inspections during construction 1 day BND 14,000 Agency : Private According to the Building Control Order (2014) and Building Control Regulations (2014), an independent technical officer is hired with the mandate to supervise the construction and to conduct inspections during construction. The technical officer is also tasked with certifying that the building is in compliance with the regulations and was built according to the approved plans. 6 Obtain planning control approval from Town and Country Planning Department 14 days no charge Agency : Town and Country Planning Department According to Clause 3, Part II of the Building Guidelines Requirements 2014, the Qualified Person must submit the application forms accompanied with 2 sets of plan consisting of survey plan and building development plans to the Town and Planning Authority for approval. A copy of the Land Title Deed must be submitted as well for verification of the compliance with special conditions of title and other terms of the Land Title Deed. The submission is now being carried online with the e- KP portal and building plan, survey plan and copy of the land title deed may be submitted in PDF format. Form A must also be submitted certifying that the Qualified Person will be responsible for compliance with the Building Guidelines Requirements. Upon review and approval by TCP, the Qualified Person is then requested to submit two sets of building plans in hard-copy (known as clean sets) for the issuance of the Planning Approval. 7 Obtain approval from Fire Department 1 day BND 105 Agency : Fire Department Once the approval has been obtained, BuildCo must receive the endorsement of the Fire department This approval is required to obtain the building permit from ABCi 8 Obtain building control approval of building works from ABCi 14 days BND 451 Agency : ABCi - Building department The Qualified Person submits an application form (Form A) for development approval of any building works from ABCi through the government's OneBiz portal along with a softcopy of the building plans in PDF format for their approval. ABCi endorsment stamp is required on all drawings and documents for the Building Permit to be issued. Page 12 Doing Business 2020 Brunei Darussalam 9 Obtain building permit from ABCi 1 day no charge Agency : ABCi The details and signatures of all the hired licensed professionals, including the M&E Engineers, C&S Engineers,checkers, surveyors, are added to Form C in order to release the building permit. 10 Supervising qualified person submits the notice of completion of all piling works 1 day no charge Agency : ABCi According to Article 25 (1) (a), (a) the supervising qualified person submits a notice of completion (fom D) of all piling works carried out, a record plan showing full details of the piling works and a certificate of supervision of those piling works within 28 days of completion of those piling works; 11 Supervising qualified person submits a certificate stating that the building works have 1 day no charge been carried out under his supervision Agency : ABCi According to Article 25. (1) (b) and (c) of the Building Control Regulations (2014), the technical officer who has conducted all the inspections during construction must submit a compliance certificate and co-sign on Form BCC (Building Contruction Compliance) to attest that he has supervised the construction of the building and that it was done in compliance with the approved plans. 12 Builder submits the Builder's Completion Certificate of Completion of Building Works 1 day no charge Agency : ABCi The Builder (BuildCo) must also submit the sign on Form CCC (Construction Compliance Certificate). within 7 days of the completion of building works, certifying that, according to best of his knowledge, the building was constructed in accordance with the law and the approved plans. 13 Perform water pressure test 14 days BND 250 Agency : Private Firm Water services requires that BuildCo to perform a water pressure test. A sample of the water is also taken to test the quality of the water. The report of this water pressure test is required when applying for the permanent water connection. 14 Receive water and sewerage inspection 1 day no charge Agency : Licensed Plumber Once the water pressure test has been done, there is an inspection by a licensed plumber. 15 Request and receive letter of acceptance from Water Services of JKR 1 day no charge Agency : Water Services of JKR (ABCi) Once the water pressure test has been confirmed and the inspection received, BuildCo must inform Water Services of JKR (ABCi) of the results of the water pressure test and also that the inspection has been conducted. This water pressure test is required when applying to change from temporary water services to permanent water services. 16 Request final inspection and await confirmation 7 days no charge Agency : ABCi The Supervising qualified person requests the final inspection online via the OneBiz portal by submitting Form E certifying that the construction has been under his supervision and was done in compliance with the approved plans and regulations. At the same time, pictures of the construction must be submitted as evidence of the progression of the work. ABCi will evaluate the pictures and organize the joint inspection from several departments and utilities. Once the date of pre-inspection has been confirmed and conducted, all the comments as noted during the pre-inspection the Qualified Person can proceed to submit the Form E for subsequent issuance of the occupancy permit by ABCi respectively. 17 Receive final inspection 1 day no charge Agency : ABCi A final inspection is carried out by the Fire department. If no discrepancies are discovered, the occupancy permit is issued within 2 weeks. 18 Pay for the Fire Department inspection fees 1 day BND 750 Agency : Fire Department Once the inspection is completed, the Fire Department issue the payment notice for the fee to be paid. During the inspection, the fire inspection will mark on a specific form (Borang B) everything that applies. BuildCo must bring this form to the Fire Department and pay the inspection fees. Payment is now available online or can can be done at the Fire Department . The proof of payment must be submitted when requesting the occupancy permit. 19 Request and obtain Occupancy Certificate 13 days no charge Agency : ABCi According to article 16. (1) (a) Section 5 - Building Occupancy, an occupancy certificate must be obtained prior to occupying any building. The architect submits, water, electrical and other relevant test results, together with pictures of completed building, in order to obtain the occupancy certificate. Page 13 Doing Business 2020 Brunei Darussalam 20 Submit request to change from temporary to permanent water connection 1 day BND 3,000 Agency : Water Services of JKR (ABCi) Once the occupancy permit has been obtained, BuildCo must submit a request to change the temporary water connection to a permanent water connection. Takes place simultaneously with previous procedure. Page 14 Doing Business 2020 Brunei Darussalam Details – Dealing with Construction Permits in Brunei Darussalam – Measure of Quality Answer Score Building quality control index (0-15) 12.0 Quality of building regulations index (0-2) 2.0 How accessible are building laws and regulations in your economy? (0-1) Available online; Free 1.0 of charge; In official gazette. Which requirements for obtaining a building permit are clearly specified in the building regulations or on any List of required 1.0 accessible website, brochure or pamphlet? (0-1) documents; Fees to be paid; Required preapprovals. Quality control before construction index (0-1) 1.0 Which third-party entities are required by law to verify that the building plans are in compliance with existing Private firm. 1.0 building regulations? (0-1) Quality control during construction index (0-3) 2.0 What types of inspections (if any) are required by law to be carried out during construction? (0-2) Inspections by 1.0 external engineer or firm; Inspections at various phases. Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0 inspections are always done in practice. Quality control after construction index (0-3) 3.0 Is there a final inspection required by law to verify that the building was built in accordance with the approved Yes, final inspection 2.0 plans and regulations? (0-2) is done by government agency. Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0 always occurs in practice. Liability and insurance regimes index (0-2) 0.0 Which parties (if any) are held liable by law for structural flaws or problems in the building once it is in use No party is held liable 0.0 (Latent Defect Liability or Decennial Liability)? (0-1) under the law. Which parties (if any) are required by law to obtain an insurance policy to cover possible structural flaws or No party is required 0.0 problems in the building once it is in use (Latent Defect Liability Insurance or Decennial Insurance)? (0-1) by law to obtain insurance . Professional certifications index (0-4) 4.0 What are the qualification requirements for the professional responsible for verifying that the architectural plans Minimum number of 2.0 or drawings are in compliance with existing building regulations? (0-2) years of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certification exam. What are the qualification requirements for the professional who supervises the construction on the ground? (0- Minimum number of 2.0 2) years of experience; University degree in engineering, construction or construction management; Being a registered architect or engineer; Passing a certification exam. Page 15 Doing Business 2020 Brunei Darussalam Getting Electricity This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection (number) To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used. • Submitting all relevant documents and obtaining all necessary clearances and permits The warehouse: • Completing all required notifications and receiving all necessary - Is owned by a local entrepreneur and is used for storage of goods. inspections - Is located in the economy’s largest business city. For 11 economies the data are also collected for • Obtaining external installation works and possibly purchasing the second largest business city. material for these works - Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway. • Concluding any necessary supply contract and obtaining final - Is a new construction and is being connected to electricity for the first time. supply - Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square Time required to complete each procedure (calendar days) feet). The plot of land on which it is built is 929 square meters (10,000 square feet). • Is at least 1 calendar day The electricity connection: • Each procedure starts on a separate day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- • Does not include time spent gathering information kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW). - Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution • Reflects the time spent in practice, with little follow-up and no network and is either overhead or underground, whichever is more common in the area where the prior contact with officials warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other Cost required to complete each procedure (% of income per owners’ private property because the warehouse has access to a road. capita) - Does not require work to install the internal wiring of the warehouse. This has already been • Official costs only, no bribes completed up to and including the customer’s service panel or switchboard and the meter base. • Value added tax excluded The monthly consumption: The reliability of supply and transparency of tariffs index (0-8) - It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours • Duration and frequency of power outages (0–3) a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours • Tools to monitor power outages (0–1) (kWh); hourly consumption is 112 kWh. • Tools to restore power supply (0–1) - If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier. - Tariffs effective in January of the current year are used for calculation of the price of electricity for • Regulatory monitoring of utilities’ performance (0–1) the warehouse. Although January has 31 days, for calculation purposes only 30 days are used. • Financial deterrents limiting outages (0–1) • Transparency and accessibility of tariffs (0–1) Price of electricity (cents per kilowatt-hour)* • Price based on monthly bill for commercial warehouse in case study *Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity. Page 16 Doing Business 2020 Brunei Darussalam Getting Electricity - Brunei Darussalam Standardized Connection Name of utility Department of Electrical Services (at the Ministry of Energy) Price of electricity (US cents per kWh) 5.0 City Covered Bandar Seri Begawan Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Procedures (number) 5 4.2 4.4 3 (28 Economies) Time (days) 25 63.2 74.8 18 (3 Economies) Cost (% of income per capita) 36.7 594.6 61.0 0.0 (3 Economies) Reliability of supply and transparency of tariff index (0-8) 7 4.0 7.4 8 (26 Economies) Figure – Getting Electricity in Brunei Darussalam – Score 66.7 97.0 99.5 87.5 Reliability of supply and transparency of Procedures Time Cost tariff index Figure – Getting Electricity in Brunei Darussalam and comparator economies – Ranking and Score DB 2020 Getting Electricity Score 0 100 99.3: Malaysia (Rank: 4) 87.7: Brunei Darussalam (Rank: 31) 87.4: Philippines (Rank: 32) 87.3: Indonesia (Rank: 33) 77.5: Bhutan (Rank: 78) 75.1: Regional Average (East Asia & Pacific) Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity. Figure – Getting Electricity in Brunei Darussalam – Procedure, Time and Cost Time (days) Cost (% of income per capita) 25 35 30 Cost (% of income per capita) 20 25 Time (days) 15 20 15 10 10 5 5 0 0 1 *2 3 *4 5 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures Page 17 Doing Business 2020 Brunei Darussalam reflected here, see the summary below. Figure – Getting Electricity in Brunei Darussalam and comparator economies – Measure of Quality 9 8 8 7 7 Index score 6 6 6 5 4 4.0 4 3 2 1 0 Brunei Bhutan Indonesia Malaysia Philippines East Darussalam Asia & Pacific Page 18 Doing Business 2020 Brunei Darussalam Details – Getting Electricity in Brunei Darussalam – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Submit new connection application and permit to dig application 7 calendar days BND 0 Agency : Department of Electrical Services (DES) The client needs to hire an electrical contractor who is registered and licensed with the Ministry of Development. The contractor must then submit the proposed electrical tapping point (external electrical layout) and permit to dig application form online to DEC via OneBiz. DEC will upload a letter through OneBiz stating the connection fee to be paid during the final procedure (BND 1,650). The letter also allows the contractor to purchase a meter from DES approved vendors. The permit to dig approval is also uploaded together with the letter. 2 Obtain site survey 1 calendar day BND 0 Agency : Department of Electrical Services Once an application is submitted to DEC, they will schedule a site survey. Client's contractor must be physically present during the site visit. The external site inspection is needed to (i) confirm the location of the tapping supply, (ii) make sure the network does not need to be extended, and (iii) carry-out the technical study of the connection works. 3 Obtain external works and meter installation from approved electrical contractor 11 calendar days BND 15,000 Agency : Approved electrical contractor The external works is completed by the approved electrical contractor (QP) and this consists mainly of laying underground cables from the warehouse to the closest point of supply on the LV network. DES will assist to turn off the supply prior to connecting to the LV network. In addition, the contractor will need to purchase a meter and install it. DES will turn on the supply in order for live testing to be done by the contractor and verified by an electrical professional engineer (PE). 4 Obtain test certification on internal wiring from professional engineer 1 calendar day BND 0 Agency : Certified professional engineer (PE) A confirmation of compliance issued by the engineer who performed internal wiring needs to be endorsed by a registered professional engineer (PE). To this end the client's electrical contractor will invite PE to carry out the internal wiring tests. The internal wiring inspection will take around a day depending on the size of the warehouse. Among other things, the PE has to verify/certify the cable size used, the depth of the cable laid, the trench routing and whether is complies with DES requirements. The professional engineer (PE) is a chartered engineer who needs to be registered with the Board of Architects, Professional Engineers and Quantity Surveyors (BAPEQS) under the Ministry of Development. 5 Obtain approval for permanent supply and electricity turn-on 7 calendar days BND 1,650 Agency : Department of Electrical Services The contractor must submit a test certification report by a Professional Engineer and an occupation permit online via OneBiz. DES will then process to check the documents, and issue an electronic bill through OneBiz. The payment can be made online or by cash at the Business Support Centre, after which the approval of permanent supply will be given. Takes place simultaneously with previous procedure. Page 19 Doing Business 2020 Brunei Darussalam Details – Getting Electricity in Brunei Darussalam – Measure of Quality Answer Reliability of supply and transparency of tariff index (0-8) 7 Total duration and frequency of outages per customer a year (0-3) 3 System average interruption duration index (SAIDI) 0.4 System average interruption frequency index (SAIFI) 0.3 What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 1.0 Mechanisms for monitoring outages (0-1) 1 Does the distribution utility use automated tools to monitor outages? Yes Mechanisms for restoring service (0-1) 1 Does the distribution utility use automated tools to restore service? Yes Regulatory monitoring (0-1) 0 Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? No Financial deterrents aimed at limiting outages (0-1) 1 Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes Communication of tariffs and tariff changes (0-1) 1 Are effective tariffs available online? Yes Link to the website, if available online http://des.gov.bn/SitePage s/Electricity%20Tariff.aspx Are customers notified of a change in tariff ahead of the billing cycle? Yes Note: If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index. If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index. Page 20 Doing Business 2020 Brunei Darussalam Registering Property This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on immovable property To make the data comparable across economies, several assumptions about the parties to the (number) transaction, the property and the procedures are used. • Preregistration procedures (for example, checking for liens, The parties (buyer and seller): notarizing sales agreement, paying property transfer taxes) - Are limited liability companies (or the legal equivalent). • Registration procedures in the economy's largest business city. - Are located in the periurban (that is, on the outskirts of the city but still within its official limits) • Postregistration procedures (for example, filling title with area of the economy’s largest business city. For 11 economies the data are also collected for the municipality) second largest business city. - Are 100% domestically and privately owned. Time required to complete each procedure (calendar days) - Perform general commercial activities. • Does not include time spent gathering information The property (fully owned by the seller): • Each procedure starts on a separate day - though procedures - Has a value of 50 times income per capita, which equals the sale price. that can be fully completed online are an exception to this rule - Is fully owned by the seller. • Procedure is considered completed once final document is - Has no mortgages attached and has been under the same ownership for the past 10 years. received - Is registered in the land registry or cadastre, or both, and is free of title disputes. • No prior contact with officials - Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required. Cost required to complete each procedure (% of property - Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- value) story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, • Official costs only (such as administrative fees, duties and building codes and legal requirements. The property, consisting of land and building, will be taxes). transferred in its entirety. • Value Added Tax, Capital Gains Tax and illicit payments are - Will not be subject to renovations or additional construction following the purchase. excluded - Has no trees, natural water sources, natural reserves or historical monuments of any kind. - Will not be used for special purposes, and no special permits, such as for residential use, Quality of land administration index (0-30) industrial plants, waste storage or certain types of agricultural activities, are required. - Has no occupants, and no other party holds a legal interest in it. • Reliability of infrastructure index (0-8) • Transparency of information index (0–6) • Geographic coverage index (0–8) • Land dispute resolution index (0–8) • Equal access to property rights index (-2–0) Page 21 Doing Business 2020 Brunei Darussalam Registering Property - Brunei Darussalam Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Procedures (number) 7 5.5 4.7 1 (5 Economies) Time (days) 298.5 71.9 23.6 1 (2 Economies) Cost (% of property value) 0.6 4.5 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 17.0 16.2 23.2 None in 2018/19 Figure – Registering Property in Brunei Darussalam – Score 50.0 0.0 95.9 56.7 Procedures Time Cost Quality of the land administration index Figure – Registering Property in Brunei Darussalam and comparator economies – Ranking and Score DB 2020 Registering Property Score 0 100 79.5: Malaysia (Rank: 33) 72.6: Bhutan (Rank: 53) 60.0: Indonesia (Rank: 106) 57.6: Philippines (Rank: 120) 57.5: Regional Average (East Asia & Pacific) 50.7: Brunei Darussalam (Rank: 144) Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators. Page 22 Doing Business 2020 Brunei Darussalam Figure – Registering Property in Brunei Darussalam – Procedure, Time and Cost Time (days) Cost (% of property value) 0.7 250 0.6 Cost (% of property value) 0.5 200 Time (days) 0.4 150 0.3 100 0.2 50 0.1 0 0 1 *2 3 4 *5 6 7 Procedures (number) * This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure. Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (http://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below. Page 23 Doing Business 2020 Brunei Darussalam Figure – Registering Property in Brunei Darussalam and comparator economies – Measure of Quality 30 26.5 25 23.0 Index score 20 17.0 15.5 16.2 15 12.5 10 5 0 Brunei Bhutan Indonesia Malaysia Philippines East Darussalam Asia & Pacific Details – Registering Property in Brunei Darussalam – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Check for encumbrances by lawyer 1 day BND 8; (BND 8 (BND 3 for Agency : Land Office searching on the property, The lawyer acting on behalf of both seller and buyer will do a land search. The lawyer will verify buyer, and seller plus BND that the seller is a rightful owner and is entitled to sell the property. It is common to request a 5 for survey plan extract)) search not only for the property but also for the seller and the buyer (a search in which any property rights registered under the name of the seller is listed). This search is done because there are restrictions on the number of properties that someone can own. If all the information has been computerized, the results can be obtained in one day. In this case, the Lands Department gives a computer printout of the information requested. It is also common to ask for a survey extract of the property at the Lands Department. 2 Conduct a winding-up search at the court Less than one day, BND 2; (BND 2 (BND 1 Agency : High Court online per name)) The lawyer conducts a search at the High Court to determine whether any of the parties involved in the transaction have had bankruptcy/winding up cases or have any pending cases that could affect the property. Since 2016, this search can be done online. Most of the records since 2005 are available. If the search involves a case before 2005, the lawyer has to request this information physically at the court. 3 The sale and purchase agreement is prepared and signed 1 day BND 200; (BND 100 - 300) Agency : Land Office The sale and purchase agreement is signed by both parties in the lawyer's office. The Memorandum of Transfer (MOT) is prepared at the same time. The cost of this procedure corresponds to the search services provided by the lawyer. If the lawyer drafts the sale and purchase agreement, the fee schedule of the Legal Profession Act (Chapter 132), Advocates and Solicitors (Remuneration) Rules would apply. 4 Submit application via Lands Department in order to obtain approval for the Memorandum 280 days BND 2; (BND 1 for each of Transfer by "His Majesty in Council" form) Agency : Land Office Local companies in Brunei cannot own land. However, they can register long term lease interests over lands for a maximum period of 60 years. In this case, the company would register and endorsement to the original title, securing its sublease right. This lease interest is transferrable and can be used as collateral. Both forms "A" & "B" are completed and submitted to the Land Office. The Land Office will give an appointment to return and sign the MOT, usually within two weeks. Every transfer in Brunei Darussalam requires the approval of "His Majesty in Council" which is a council of officials representing the Sultan. The petition to transfers follows a three-step process. First, the Lands Department will check if all the information has been filled appropriately, and the technicalities of the transactions, issuing a report to the Ministry of Development. The Ministry then review this information and whether the transaction is in line with the land policies of the government, submitting a report to His Majesty in Council if the transaction can proceed. Upon approval of the MOT, the Land Office will assess the market value of the property and inform the applicant of the amount of stamp duty, the registration fee and land tax. The proof of payment must be provided to the Land Office. The procedures to register an ownership transfer and a lease interest are the same. However, the time to obtain the approval of His Majesty in Council differs. On average, the approval of a lease interest takes between 8 to 12 months (however, in some cases it can take up to 24 months). Property transfers between local citizens take between 6 to 8 months to receive approval. 5 Visit the property by the Land Office 1 day no charge Agency : Land Office An inspector from the Land Office will visit the property with the purpose of determining the actual stamp duty due, and identifying the activities carried out in the building. Page 24 Doing Business 2020 Brunei Darussalam 6 Pay stamp duty and sign the MOT at the Land Office 1 day BND 13,597; (BND 6 for Agency : Land Office every BND 1000 of the The seller and the buyer will visit the Land Office to sign the Memorandum of Transfer (MOT) and assessed value of the the full payment form in the presence of an officer from the Land Office. property + Registration fee of BND 1 + Land Tax BND Since there will be no rents paid monthly in the case study assumption, the stamp duty would be calculated on the total consideration of the lease (which equals the property value). 150 per quarter acre for commercial land per year (not counted in estimations)) 7 Register property lease at the Land Office 15 days no charge Agency : Land Office The lease interest is registered at the Land Office and a new endorsement on the title is issued recognizing the lease interest of the company on the property (in case of a property transfer, a new title would be issued). Takes place simultaneously with previous procedure. Page 25 Doing Business 2020 Brunei Darussalam Details – Registering Property in Brunei Darussalam – Measure of Quality Answer Score Quality of the land administration index (0-30) 17.0 Reliability of infrastructure index (0-8) 5.0 Type of land registration system in the economy: Title Registration System What is the institution in charge of immovable property registration? Lands Department In what format are past and newly issued land records kept at the immovable property registry of the largest Paper 0.0 business city of the economy —in a paper format or in a computerized format (scanned or fully digital)? Is there a comprehensive and functional electronic database for checking for encumbrances (liens, mortgages, Yes 1.0 restrictions and the like)? Institution in charge of the plans showing legal boundaries in the largest business city: Survey Department In what format are past and newly issued cadastral plans kept at the mapping agency of the largest business Computer/Fully digital 2.0 city of the economy—in a paper format or in a computerized format (scanned or fully digital)? Is there an electronic database for recording boundaries, checking plans and providing cadastral information Yes 1.0 (geographic information system)? Is the information recorded by the immovable property registration agency and the cadastral or mapping agency Separate databases 0.0 kept in a single database, in different but linked databases or in separate databases? Do the immovable property registration agency and cadastral or mapping agency use the same identification Yes 1.0 number for properties? Transparency of information index (0–6) 4.0 Who is able to obtain information on land ownership at the agency in charge of immovable property registration Anyone who pays the 1.0 in the largest business city? official fee Is the list of documents that are required to complete any type of property transaction made publicly available– Yes, online 0.5 and if so, how? Link for online access: https://laris.gov.bn/en -us/pages/faq.aspx Is the applicable fee schedule for any type of property transaction at the agency in charge of immovable Yes, online 0.5 property registration in the largest business city made publicly available–and if so, how? Link for online access: http://www.land.gov.b n/sitepages/fees.aspx Does the agency in charge of immovable property registration agency formally commit to deliver a legally Yes, online 0.5 binding document that proves property ownership within a specific timeframe –and if so, how does it communicate the service standard? Link for online access: http://www.land.gov.b n/SitePages/Applicati on%20and%20Durati on%20of%20Process %20By%20Land%20 Department.aspx Is there a specific and independent mechanism for filing complaints about a problem that occurred at the agency No 0.0 in charge of immovable property registration? Contact information: Are there publicly available official statistics tracking the number of transactions at the immovable property No 0.0 registration agency? Number of property transfers in the largest business city in 2018: Who is able to consult maps of land plots in the largest business city? Anyone who pays the 0.5 official fee Is the applicable fee schedule for accessing maps of land plots made publicly available—and if so, how? Yes, online 0.5 Page 26 Doing Business 2020 Brunei Darussalam Link for online access: http://survey.gov.bn/w eb/survey_departmen t/cadastral-field- survey1 Does the cadastral/mapping agency formally specifies the timeframe to deliver an updated cadastral plan—and Yes, online 0.5 if so, how does it communicate the service standard? Link for online access: http://www.mod.gov.b n/survey/SitePages/T ekad%20Pemedulian %20Orang%20Ramai .aspx Is there a specific and independent mechanism for filing complaints about a problem that occurred at the No 0.0 cadastral or mapping agency? Contact information: Geographic coverage index (0–8) 4.0 Are all privately held land plots in the largest business city formally registered at the immovable property Yes 2.0 registry? Are all privately held land plots in the economy formally registered at the immovable property registry? No 0.0 Are all privately held land plots in the largest business city mapped? Yes 2.0 Are all privately held land plots in the economy mapped? No 0.0 Land dispute resolution index (0–8) 4.0 Does the law require that all property sale transactions be registered at the immovable property registry to make Yes 1.5 them opposable to third parties? Legal basis: Ownership may be transferred subject to the approval of His Majesty the Sultan in Council. Land Code (Cap. 40) Is the system of immovable property registration subject to a state or private guarantee? Yes 0.5 Type of guarantee: State guarantee Legal basis: Land Code 1909 (Cap. 40) Is there a is a specific, out-of-court compensation mechanism to cover for losses incurred by parties who No 0.0 engaged in good faith in a property transaction based on erroneous information certified by the immovable property registry? Legal basis: Does the legal system require a control of legality of the documents necessary for a property transaction (e.g., Yes 0.5 checking the compliance of contracts with requirements of the law)? If yes, who is responsible for checking the legality of the documents? Registrar; Does the legal system require verification of the identity of the parties to a property transaction? Yes 0.5 If yes, who is responsible for verifying the identity of the parties? Registrar; Is there a national database to verify the accuracy of government issued identity documents? Yes 1.0 What is the Court of first instance in charge of a case involving a standard land dispute between two local High Court of Brunei businesses over tenure rights for a property worth 50 times gross national income (GNI) per capita and located Darussalam in the largest business city? How long does it take on average to obtain a decision from the first-instance court for such a case (without More than 3 years 0.0 appeal)? Are there publicly available statistics on the number of land disputes at the economy level in the first instance No 0.0 court? Number of land disputes in the economy in 2018: Equal access to property rights index (-2–0) 0.0 Page 27 Doing Business 2020 Brunei Darussalam Do unmarried men and unmarried women have equal ownership rights to property? Yes Do married men and married women have equal ownership rights to property? Yes 0.0 Page 28 Doing Business 2020 Brunei Darussalam Getting Credit This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Strength of legal rights index (0–12) Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit • Rights of borrowers and lenders through collateral laws (0-10) information index measures rules and practices affecting the coverage, scope and accessibility of • Protection of secured creditors’ rights through bankruptcy laws credit information available through a credit registry or a credit bureau. The strength of legal rights (0-2) index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary Depth of credit information index (0–8) secured transactions system exists. Then two case scenarios, case A and case B, are used to • Scope and accessibility of credit information distributed by determine how a nonpossessory security interest is created, publicized and enforced according to credit bureaus and credit registries (0-8) the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a Credit bureau coverage (% of adults) secured lender, BizBank. • Number of individuals and firms listed in largest credit bureau In some economies the legal framework for secured transactions will allow only case A or case B as a percentage of adult population (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral. Credit registry coverage (% of adults) • Number of individuals and firms listed in credit registry as a Several assumptions about the secured borrower (ABC) and lender (BizBank) are used: percentage of adult population - ABC is a domestic limited liability company (or its legal equivalent). - ABC has up to 50 employees. - ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city. - Both ABC and BizBank are 100% domestically owned. The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests). In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets. Page 29 Doing Business 2020 Brunei Darussalam Getting Credit - Brunei Darussalam Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Strength of legal rights index (0-12) 12 7.1 6.1 12 (5 Economies) Depth of credit information index (0-8) 8 4.5 6.8 8 (53 Economies) Credit registry coverage (% of adults) 76.8 16.6 24.4 100.0 (2 Economies) Credit bureau coverage (% of adults) 0.0 23.8 66.7 100.0 (14 Economies) Figure – Getting Credit in Brunei Darussalam – Score 100.0 Score - Getting Credit Figure – Getting Credit in Brunei Darussalam and comparator economies – Ranking and Score DB 2020 Getting Credit Score 0 100 75.0: Malaysia (Rank: 37) 70.0: Indonesia (Rank: 48) 58.0: Regional Average (East Asia & Pacific) 55.0: Bhutan (Rank: 94) 40.0: Philippines (Rank: 132) 100: Brunei Darussalam (Rank: 1) Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index. Page 30 Doing Business 2020 Brunei Darussalam Figure – Legal Rights in Brunei Darussalam and comparator economies 14 12 12 Index Score 10 8 7 7.1 6 6 4 4 2 1 0 Brunei Bhutan Indonesia Malaysia Philippines East Darussalam Asia & Pacific Page 31 Doing Business 2020 Brunei Darussalam Details – Legal Rights in Brunei Darussalam Strength of legal rights index (0-12) 12 Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents Yes to security interests in movable assets exist in the economy? Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description Yes of collateral? Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of Yes collateral? May a security right extend to future or after-acquired assets, and does it extend automatically to the products, proceeds and replacements of the Yes original assets? Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; Yes and can the collateral agreement include a maximum amount for which the assets are encumbered? Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an Yes electronic database indexed by debtor's name? Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third Yes party? Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law Yes protect secured creditors’ rights by providing clear grounds for relief from the stay and sets a time limit for it? Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell Yes the collateral through public auction or private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Figure – Credit Information in Brunei Darussalam and comparator economies 9 8 8 8 8 7 7 7 Index Score 6 5 4.5 4 3 2 1 0 Brunei Bhutan Indonesia Malaysia Philippines East Darussalam Asia & Pacific Page 32 Doing Business 2020 Brunei Darussalam Details – Credit Information in Brunei Darussalam Depth of credit information index (0-8) Credit bureau Credit registry Score Are data on both firms and individuals distributed? No Yes 1 Are both positive and negative credit data distributed? No Yes 1 Are data from retailers or utility companies - in addition to data from banks and No Yes 1 financial institutions - distributed? Are at least 2 years of historical data distributed? (Credit bureaus and registries No Yes 1 that distribute more than 10 years of negative data or erase data on defaults as soon as they are repaid obtain a score of 0 for this component.) Are data on loan amounts below 1% of income per capita distributed? No Yes 1 By law, do borrowers have the right to access their data in the credit bureau or No Yes 1 credit registry? Can banks and financial institutions access borrowers’ credit information online No Yes 1 (for example, through an online platform, a system-to-system connection or both)? Are bureau or registry credit scores offered as a value-added service to help No Yes 1 banks and financial institutions assess the creditworthiness of borrowers? Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0. Coverage Credit bureau Credit registry Number of individuals 0 223,381 Number of firms 0 15,327 Total 0 238,708 Percentage of adult population 0.0 76.8 Page 33 Doing Business 2020 Brunei Darussalam Protecting Minority Investors This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions • Extent of disclosure index (0–10): Disclosure, review, and To make the data comparable across economies, a case study uses several assumptions about approval requirements for related-party transactions the business and the transaction. • Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for The business (Buyer): prejudicial related-party transactions; Available legal - Is a publicly traded corporation listed on the economy’s most important stock exchange. remedies (damages, disgorgement of profits, disqualification - Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of from managerial position(s) for one year or more, rescission of Buyer where permitted, even if this is not specifically required by law. the transaction) - Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members. • Ease of shareholder suits index (0–10): Access to internal - Has not adopted bylaws or articles of association that go beyond the minimum requirements. corporate documents; Evidence obtainable during trial and allocation of legal expenses Does not follow codes, principles, recommendations or guidelines that are not mandatory. - Is a manufacturing company with its own distribution network. • Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of The transaction involves the following details: shareholder suits indices - Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to • Extent of shareholder rights index (0-6): Shareholders’ rights Buyer’s five-member board. and role in major corporate decisions - Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores. • Extent of ownership and control index (0-7): Governance - Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Buyer’s safeguards protecting shareholders from undue board control distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of and entrenchment Buyer’s assets and is higher than the market value. • Extent of corporate transparency index (0-7): Corporate - The proposed transaction is part of the company’s principal activity and is not outside the transparency on ownership stakes, compensation, audits and authority of the company. financial prospects - Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently. • Extent of shareholder governance index (0–20): Sum of the - The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and extent of shareholders rights, extent of ownership and control directors that approved the transaction. and extent of corporate transparency indices • Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices Page 34 Doing Business 2020 Brunei Darussalam Protecting Minority Investors - Brunei Darussalam Stock exchange information Stock exchange Stock exchange URL Listed firms with equity securities 0 City Covered Bandar Seri Begawan Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Extent of disclosure index (0-10) 4.0 5.9 6.5 10 (13 Economies) Extent of director liability index (0-10) 8.0 5.2 5.3 10 (3 Economies) Ease of shareholder suits index (0-10) 8.0 6.7 7.3 10 (Djibouti) Extent of shareholder rights index (0-6) 0.0 2.0 4.7 6 (19 Economies) Extent of ownership and control index (0-7) 0.0 2.4 4.5 7 (9 Economies) Extent of corporate transparency index (0-7) 0.0 2.6 5.7 7 (13 Economies) Figure – Protecting Minority in Brunei Darussalam – Score 40.0 Score - Protecting Minority Investors Figure – Protecting Minority Investors in Brunei Darussalam and comparator economies – Ranking and Score DB 2020 Protecting Minority Investors Score 0 100 88.0: Malaysia (Rank: 2) 70.0: Indonesia (Rank: 37) 60.0: Philippines (Rank: 72) 49.7: Regional Average (East Asia & Pacific) 46.0: Bhutan (Rank: 111) 40.0: Brunei Darussalam (Rank: 128) Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index. Page 35 Doing Business 2020 Brunei Darussalam Figure – Protecting Minority Investors in Brunei Darussalam and comparator economies – Measure of Quality Brunei Darussalam 0 8 4 0 8 Bhutan 3 4 4 3 3 6 Indonesia 7 5 10 6 5 2 Malaysia 6 9 10 6 5 8 Philippines 4 4 9 5 1 7 OECD high income 5.6 5.6 6.6 4.3 4.5 7.4 East Asia & Pacific 3.1 5.1 6.4 2.9 2.4 6.3 0 5 10 15 20 25 30 35 40 45 50 Sub-Indicator Score Extent of corporate transparency index (0-7) Extent of director liability index (0-10) Extent of disclosure index (0-10) Extent of ownership and control index (0-7) Extent of shareholder rights index (0-6) Ease of shareholder suits index (0-10) Page 36 Doing Business 2020 Brunei Darussalam Details – Protecting Minority Investors in Brunei Darussalam – Measure of Quality Answer Score Extent of conflict of interest regulation index (0-30) Extent of disclosure index (0-10) 4.0 Whose decision is sufficient to approve the Buyer-Seller transaction? (0-3) Board of directors 2.0 excluding interested members Must an external body review the terms of the transaction before it takes place? (0-1) No 0.0 Must Mr. James disclose his conflict of interest to the board of directors? (0-2) Existence of a conflict 1.0 without any specifics Must Buyer disclose the transaction in periodic filings (e.g. annual reports)? (0-2) Disclosure on the 1.0 transaction only Must Buyer immediately disclose the transaction to the public? (0-2) No disclosure 0.0 obligation Extent of director liability index (0-10) 8.0 Can shareholders representing 10% of Buyer's share capital sue for the damage the transaction caused to Yes 1.0 Buyer? (0-1) Can shareholders hold Mr. James liable for the damage the transaction caused to Buyer? (0-2) Liable if negligent 1.0 Can shareholders hold the other directors liable for the damage the transaction caused to Buyer? (0-2) Liable if unfair or 2.0 prejudicial Must Mr. James pay damages for the harm caused to Buyer upon a successful claim by shareholders? (0-1) Yes 1.0 Must Mr. James repay profits made from the transaction upon a successful claim by shareholders? (0-1) Yes 1.0 Is Mr. James disqualified upon a successful claim by shareholders? (0-1) No 0.0 Can a court void the transaction upon a successful claim by shareholders? (0-2) Voidable if unfair or 2.0 prejudicial Ease of shareholder suits index (0-10) 8.0 Before suing, can shareholders representing 10% of Buyer's share capital inspect the transaction documents? Yes 1.0 (0-1) Can the plaintiff obtain any documents from the defendant and witnesses at trial? (0-3) Any relevant 3.0 document Can the plaintiff request categories of documents from the defendant without identifying specific ones? (0-1) Yes 1.0 Can the plaintiff directly question the defendant and witnesses at trial? (0-2) Yes 2.0 Is the level of proof required for civil suits lower than that of criminal cases? (0-1) Yes 1.0 Can shareholder plaintiffs recover their legal expenses from the company? (0-2) At the discretion of 0.0 the court Extent of shareholder governance index (0-20) Extent of shareholder rights index (0-6) 0.0 Does the sale of 51% of Buyer's assets require shareholder approval? Yes 1.0 Can shareholders representing 10% of Buyer's share capital call for a meeting of shareholders? Yes 1.0 Must Buyer obtain its shareholders’ approval every time it issues new shares? No 0.0 Do shareholders automatically receive preemption rights every time Buyer issues new shares? Yes 1.0 Do shareholders elect and dismiss the external auditor? Yes 1.0 Are changes to the rights of a class of shares only possible if the holders of the affected shares approve? Yes 1.0 Extent of ownership and control index (0-7) 0.0 Is it forbidden to appoint the same individual as CEO and chairperson of the board of directors? No 0.0 Page 37 Doing Business 2020 Brunei Darussalam Must the board of directors include independent and nonexecutive board members? Yes 1.0 Can shareholders remove members of the board of directors without cause before the end of their term? Yes 1.0 Must the board of directors include a separate audit committee exclusively comprising board members? Yes 1.0 Must a potential acquirer make a tender offer to all shareholders upon acquiring 50% of Buyer? No 0.0 Must Buyer pay declared dividends within a maximum period set by law? No 0.0 Is a subsidiary prohibited from acquiring shares issued by its parent company? Yes 1.0 Extent of corporate transparency index (0-7) 0.0 Must Buyer disclose direct and indirect beneficial ownership stakes representing 5%? No 0.0 Must Buyer disclose information about board members’ primary employment and directorships in other Yes 1.0 companies? Must Buyer disclose the compensation of individual managers? Yes 1.0 Must a detailed notice of general meeting be sent 21 days before the meeting? No 0.0 Can shareholders representing 5% of Buyer’s share capital put items on the general meeting agenda? Yes 1.0 Must Buyer's annual financial statements be audited by an external auditor? Yes 1.0 Must Buyer disclose its audit reports to the public? Yes 1.0 Page 38 Doing Business 2020 Brunei Darussalam Paying Taxes This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information. What the indicators measure Case study assumptions Tax payments for a manufacturing company in 2018 (number Using a case scenario, Doing Business records taxes and mandatory contributions a medium size per year adjusted for electronic and joint filing and payment) company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of • Total number of taxes and contributions paid or withheld, filing and payments, time taken to comply with tax laws, time taken to comply with the including consumption taxes (value added tax, sales tax or requirements of postfiling processes and time waiting. goods and service tax) • Method and frequency of filing and payment To make data comparable across economies, several assumptions are used: - TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces Time required to comply with 3 major taxes (hours per year) ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured • Collecting information, computing tax payable at all levels of government. • Preparing separate tax accounting books, if required • Completing tax return, filing with agencies The VAT refund process: - In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times • Arranging payment or withholding income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income Total tax and contribution rate (% of commercial profits) per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred • Profit or corporate income tax in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output • Social contributions, labor taxes paid by employer VAT in June 2018. • Property and property transfer taxes The corporate income tax audit process: • Dividend, capital gains, financial transactions taxes - An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, • Waste collection, vehicle, road and other taxes or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the Postfiling Index tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax • Time to comply with VAT refund (hours) liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period. • Time to obtain VAT refund (weeks) • Time to comply with a corporate income tax correction (hours) • Time to complete a corporate income tax correction (weeks) Page 39 Doing Business 2020 Brunei Darussalam Paying Taxes - Brunei Darussalam Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Payments (number per year) 5 20.6 10.3 3 (2 Economies) Time (hours per year) 53 173.0 158.8 49 (3 Economies) Total tax and contribution rate (% of profit) 8.0 33.6 39.9 26.1 (33 Economies) Postfiling index (0-100) 0.0 56.4 86.7 None in 2018/19 Figure – Paying Taxes in Brunei Darussalam – Score 96.7 99.5 100.0 0.0 Payments Time Total tax and contribution rate Postfiling index Figure – Paying Taxes in Brunei Darussalam and comparator economies – Ranking and Score DB 2020 Paying Taxes Score 0 100 89.2: Bhutan (Rank: 15) 76.0: Malaysia (Rank: 80) 75.8: Indonesia (Rank: 81) 74.0: Brunei Darussalam (Rank: 90) 73.6: Regional Average (East Asia & Pacific) 72.6: Philippines (Rank: 95) Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold. Page 40 Doing Business 2020 Brunei Darussalam Figure – Paying Taxes in Brunei Darussalam and comparator economies – Measure of Quality 100 95.0 90 80 68.8 Index score 70 60 56.4 51.0 50.0 50 40 30 20 10 0.0 0 Brunei Bhutan Indonesia Malaysia Philippines East Darussalam Asia & Pacific Page 41 Doing Business 2020 Brunei Darussalam Details – Paying Taxes in Brunei Darussalam Tax or Payments Notes on Time (hours) Statutory tax Tax base Total tax and Notes on TTCR mandatory (number) Payments rate contribution contribution rate (% of profit) Employer paid - 1.0 online 10.0 5% plus 3.5% gross salary 7.92 Employee capped Provident Fund (Tabung Amanah Pekerja TAP) Corporate 1.0 online 42.5 18.5% taxable profit 0.09 income tax Vehicle tax 1.0 B$4.50 per 100 depending on 0.01 c.c engine size Building tax 1.0 up to 12% assessed rental 0.00 small amount value Employee paid - 0.0 online and jointly 5% plus 3.5% gross salary 0.00 withheld Employee capped Provident Fund (Tabung Amanah Pekerja TAP) Land tax 1.0 assessed 0.00 small amount property value Totals 5 53 8.0 Page 42 Doing Business 2020 Brunei Darussalam Details – Paying Taxes in Brunei Darussalam – Tax by Type Taxes by type Answer Profit tax (% of profit) 0.1 Labor tax and contributions (% of profit) 7.9 Other taxes (% of profit) 0.0 Page 43 Doing Business 2020 Brunei Darussalam Details – Paying Taxes in Brunei Darussalam – Measure of Quality Answer Score Postfiling index (0-100) 0.0 VAT refunds Does VAT exist? No Does a VAT refund process exist per the case study? N/A Restrictions on VAT refund process Not Applicable Percentage of cases exposed to a VAT audit (%) Not applicable Is there a mandatory carry forward period? Not Applicable Time to comply with VAT refund (hours) No VAT No VAT Time to obtain VAT refund (weeks) No VAT No VAT Corporate income tax audits Does corporate income tax exist? Yes Percentage of cases exposed to a corporate income tax audit (%) 50% - 74% Time to comply with a corporate income tax correction (hours) 137.0 0.0 Time to complete a corporate income tax correction (weeks) 65.4 0.0 Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable. The hours for Social Security include all the hours for labor taxes and mandatory contributions in general. The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction. N/A = Not applicable. Page 44 Doing Business 2020 Brunei Darussalam Trading across Borders Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Documentary compliance To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions: • Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border handling in Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as origin economy 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, • Obtaining, preparing and submitting documents required by suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and destination economy and any transit economies can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours. • Covers all documents required by law and in practice, including electronic submissions of information Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the Border compliance costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. • Customs clearance and inspections Contributors are private sector experts in international trade logistics and are informed about exchange rates. • Inspections by other agencies (if applied to more than 20% of shipments) Assumptions of the case study: • Handling and inspections that take place at the economy’s port - For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in or border the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy. Domestic transport - It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from • Loading or unloading of the shipment at the warehouse or its natural import partner—the economy from which it imports the largest value (price times port/border quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is • Transport between warehouse and port/border the largest purchaser of this product. Shipment value is assumed to be $50,000. • Traffic delays and road police checks while shipment is en - The mode of transport is the one most widely used for the chosen export or import product and route the trading partner, as is the seaport or land border crossing. - All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process. - A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy. - Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities. Page 45 Doing Business 2020 Brunei Darussalam Trading across Borders - Brunei Darussalam Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Time to export: Border compliance (hours) 117 57.5 12.7 1 (19 Economies) Cost to export: Border compliance (USD) 340 381.1 136.8 0 (19 Economies) Time to export: Documentary compliance (hours) 155 55.6 2.3 1 (26 Economies) Cost to export: Documentary compliance (USD) 90 109.4 33.4 0 (20 Economies) Time to import: Border compliance (hours) 48 68.4 8.5 1 (25 Economies) Cost to import: Border compliance (USD) 395 422.8 98.1 0 (28 Economies) Time to import: Documentary compliance (hours) 132 53.7 3.4 1 (30 Economies) Cost to import: Documentary compliance (USD) 50 108.4 23.5 0 (30 Economies) Figure – Trading across Borders in Brunei Darussalam – Score 27.0 67.9 8.9 77.5 83.2 67.1 45.2 92.9 Time Cost Time Cost Time Cost Time Cost to to to to to to to to export: export: export: export: import: import: import: import: Border Border Documentary Documentary Border Border Documentary Documentary compliance compliance compliance compliance compliance compliance compliance compliance Figure – Trading across Borders in Brunei Darussalam and comparator economies – Ranking and Score DB 2020 Trading Across Borders Score 0 100 94.2: Bhutan (Rank: 30) 88.5: Malaysia (Rank: 49) 71.6: Regional Average (East Asia & Pacific) 68.4: Philippines (Rank: 113) 67.5: Indonesia (Rank: 116) 58.7: Brunei Darussalam (Rank: 149) Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import. Page 46 Doing Business 2020 Brunei Darussalam Figure – Trading across Borders in Brunei Darussalam – Time and Cost Time (hours) Cost (USD) 180 450 155 395 160 400 340 132 140 350 Time (hours) 117 Cost (USD) 120 300 100 250 80 200 60 48 150 90 40 100 50 20 50 0 0 Export Export Import Import - - - - Border Documentary Border Documentary Compliance Compliance Compliance Compliance Page 47 Doing Business 2020 Brunei Darussalam Details – Trading across Borders in Brunei Darussalam Characteristics Export Import Product HS 29 : Organic chemicals HS 8708: Parts and accessories of motor vehicles Trade partner Japan Japan Border Muara port Muara port Distance (km) 25 25 Domestic transport time (hours) 3 3 Domestic transport cost (USD) 150 150 Details – Trading across Borders in Brunei Darussalam – Components of Border Compliance Time to Complete (hours) Associated Costs (USD) Export: Clearance and inspections required by 45.0 100.0 customs authorities Export: Clearance and inspections required by 0.0 0.0 agencies other than customs Export: Port or border handling 72.0 240.0 Import: Clearance and inspections required by 48.0 80.0 customs authorities Import: Clearance and inspections required by 0.0 0.0 agencies other than customs Import: Port or border handling 48.0 315.0 Page 48 Doing Business 2020 Brunei Darussalam Details – Trading across Borders in Brunei Darussalam – Trade Documents Export Import Bill of lading Bill of Lading Commercial invoice Shipping Delivery Order Customs export declaration Commercial Invoice Packing list Packing list Material Safety Data Sheet Customs Import Declaration SOLAS certificate Technical Certificate SOLAS certificate Page 49 Doing Business 2020 Brunei Darussalam Enforcing Contracts The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Time required to enforce a contract through the courts The dispute in the case study involves the breach of a sales contract between two domestic (calendar days) businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement. • Time to file and serve the case • Time for trial and to obtain the judgment To make the data on the time and comparable across economies, several assumptions about the case are used: • Time to enforce the judgment - The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both Cost required to enforce a contract through the courts (% of located in the economy’s largest business city. For 11 economies the data are also collected for the claim value) second largest business city. - The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of • Average attorney fees adequate quality. • Court costs - The value of the dispute is 200% of the income per capita or the equivalent in local currency of USD 5,000, whichever is greater. • Enforcement costs - The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater. Quality of judicial processes index (0-18) - The Seller requests the pretrial attachment of the defendant’s movable assets to secure the • Court structure and proceedings (-1-5) claim. - The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods • Case management (0-6) was not adequate. • Court automation (0-4) - The judge decides in favor of the seller; there is no appeal. - The Seller enforces the judgment through a public sale of the Buyer’s movable assets. • Alternative dispute resolution (0-3) Page 50 Doing Business 2020 Brunei Darussalam Enforcing Contracts - Brunei Darussalam Standardized Case Claim value BND 83,023 Court name Bandar Seri Begawan Intermediate Court City Covered Bandar Seri Begawan Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Time (days) 540 581.1 589.6 120 (Singapore) Cost (% of claim value) 36.6 47.2 21.5 0.1 (Bhutan) Quality of judicial processes index (0-18) 11.5 8.1 11.7 None in 2018/19 Figure – Enforcing Contracts in Brunei Darussalam – Score 65.6 58.9 63.9 Time Cost Quality of judicial processes index Figure – Enforcing Contracts in Brunei Darussalam and comparator economies – Ranking and Score DB 2020 Enforcing Contracts Score 0 100 70.0: Bhutan (Rank: 29) 68.2: Malaysia (Rank: 35) 62.8: Brunei Darussalam (Rank: 66) 53.0: Regional Average (East Asia & Pacific) 49.1: Indonesia (Rank: 139) 46.0: Philippines (Rank: 152) Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators. Page 51 Doing Business 2020 Brunei Darussalam Figure – Enforcing Contracts in Brunei Darussalam – Time and Cost Time (days) Cost (% of claim value) 1200 80 Cost (% of claim value) 70.3 962 70 1000 60 Time (days) 800 47.2 50 36.6 581.1 37.9 589.6 600 540 40 425 31.0 403 30 400 23.1 21.5 225 20 200 10 0 0 Bhutan Brunei East Indonesia Malaysia OECD Philippines Darussalam Asia high & income Pacific Page 52 Doing Business 2020 Brunei Darussalam Figure – Enforcing Contracts in Brunei Darussalam and comparator economies – Measure of Quality Brunei Darussalam 2 4 2.5 3 Bhutan 2.5 3 0 2.5 Indonesia 2.5 2.8 0.6 3 Malaysia 2.5 4 2.5 4 Philippines 2.5 1.5 0 3.5 OECD high income 2.5 3.2 2.4 3.6 East Asia & Pacific 2.2 2.2 1.3 3 0 2 4 6 8 10 12 14 Sub-Indicator Score Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5) Details – Enforcing Contracts in Brunei Darussalam Indicator Time (days) 540 Filing and service 50 Trial and judgment 400 Enforcement of judgment 90 Cost (% of claim value) 36.6 Attorney fees 30 Court fees 3.6 Enforcement fees 3 Quality of judicial processes index (0-18) 11.5 Court structure and proceedings (-1-5) 3.0 Case management (0-6) 4.0 Court automation (0-4) 2.5 Alternative dispute resolution (0-3) 2.0 Page 53 Doing Business 2020 Brunei Darussalam Details – Enforcing Contracts in Brunei Darussalam – Measure of Quality Answer Score Quality of judicial processes index (0-18) 11.5 Court structure and proceedings (-1-5) 3.0 1. Is there a court or division of a court dedicated solely to hearing commercial cases? No 0.0 2. Small claims court 1.5 2.a. Is there a small claims court or a fast-track procedure for small claims? Yes 2.b. If yes, is self-representation allowed? Yes 3. Is pretrial attachment available? Yes 1.0 4. Are new cases assigned randomly to judges? Yes, but manual 0.5 5. Does a woman's testimony carry the same evidentiary weight in court as a man's? Yes 0.0 Case management (0-6) 4.0 1. Time standards 0.0 1.a. Are there laws setting overall time standards for key court events in a civil case? Yes 1.b. If yes, are the time standards set for at least three court events? No 1.c. Are these time standards respected in more than 50% of cases? No 2. Adjournments 0.0 2.a. Does the law regulate the maximum number of adjournments that can be granted? No 2.b. Are adjournments limited to unforeseen and exceptional circumstances? Yes 2.c. If rules on adjournments exist, are they respected in more than 50% of cases? No 3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) Yes 1.0 clearance rate report; (iii) age of pending cases report; and (iv) single case progress report? 4. Is a pretrial conference among the case management techniques used before the competent court? Yes 1.0 5. Are there any electronic case management tools in place within the competent court for use by judges? Yes 1.0 6. Are there any electronic case management tools in place within the competent court for use by lawyers? Yes 1.0 Court automation (0-4) 2.5 1. Can the initial complaint be filed electronically through a dedicated platform within the competent court? Yes 1.0 2. Is it possible to carry out service of process electronically for claims filed before the competent court? No 0.0 3. Can court fees be paid electronically within the competent court? Yes 1.0 4. Publication of judgments 0.5 4.a Are judgments rendered in commercial cases at all levels made available to the general public No through publication in official gazettes, in newspapers or on the internet or court website? 4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made Yes available to the general public through publication in official gazettes, in newspapers or on the internet or court website? Alternative dispute resolution (0-3) 2.0 1. Arbitration 1.5 1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or Yes section of the applicable code of civil procedure encompassing substantially all its aspects? 1.b. Are there any commercial disputes—aside from those that deal with public order or public policy— No that cannot be submitted to arbitration? 1.c. Are valid arbitration clauses or agreements usually enforced by the courts? Yes Page 54 Doing Business 2020 Brunei Darussalam 2. Mediation/Conciliation 0.5 2.a. Is voluntary mediation or conciliation available? Yes 2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or No section of the applicable code of civil procedure encompassing substantially all their aspects (for example, definition, aim and scope of application, desig 2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or No conciliation is successful, a refund of court filing fees, income tax credits or the like)? Page 55 Doing Business 2020 Brunei Darussalam Resolving Insolvency Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Time required to recover debt (years) To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used: • Measured in calendar years • Appeals and requests for extension are included - A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties. Cost required to recover debt (% of debtor’s estate) - The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater. • Measured as percentage of estate value - The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. • Court fees The hotel cannot pay back the loan, but makes enough money to operate otherwise. • Fees of insolvency administrators In addition, Doing Business evaluates the quality of legal framework applicable to judicial • Lawyers’ fees liquidation and reorganization proceedings and the extent to which best insolvency practices have been implemented in each economy covered. • Assessors’ and auctioneers’ fees • Other related fees Outcome • Whether business continues operating as a going concern or business assets are sold piecemeal Recovery rate for creditors • Measures the cents on the dollar recovered by secured creditors • Outcome for the business (survival or not) determines the maximum value that can be recovered • Official costs of the insolvency proceedings are deducted • Depreciation of furniture is taken into account • Present value of debt recovered Strength of insolvency framework index (0- 16) • Sum of the scores of four component indices: • Commencement of proceedings index (0-3) • Management of debtor’s assets index (0-6) • Reorganization proceedings index (0-3) • Creditor participation index (0-4) Page 56 Doing Business 2020 Brunei Darussalam Resolving Insolvency - Brunei Darussalam Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Recovery rate (cents on the dollar) 47.2 35.5 70.2 92.9 (Norway) Time (years) 2.5 2.6 1.7 0.4 (Ireland) Cost (% of estate) 3.5 20.6 9.3 1.0 (Norway) Outcome (0 as piecemeal sale and 1 as going concern) 0 .. .. .. Strength of insolvency framework index (0-16) 10.5 7.0 11.9 None in 2018/19 Figure – Resolving Insolvency in Brunei Darussalam – Score 50.8 65.6 Recovery rate Strength of insolvency framework index Figure – Resolving Insolvency in Brunei Darussalam and comparator economies – Ranking and Score DB 2020 Resolving Insolvency Score 0 100 68.1: Indonesia (Rank: 38) 67.0: Malaysia (Rank: 40) 58.2: Brunei Darussalam (Rank: 59) 55.1: Philippines (Rank: 65) 40.9: Regional Average (East Asia & Pacific) 0.0: Bhutan (Rank: 168) Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index. Page 57 Doing Business 2020 Brunei Darussalam Figure – Resolving Insolvency in Brunei Darussalam – Time and Cost Time (years) Cost (% of estate) 3 2.7 32.0 35 2.5 2.6 Cost (% of estate) 2.5 30 Time (years) 21.6 25 2 20.6 1.7 20 1.5 1.1 1.0 15 1 10.0 9.3 10 0.5 3.5 5 0 0 No Brunei East Indonesia Malaysia OECD Philippines Practice Darussalam Asia high Bhutan & income Pacific Page 58 Doing Business 2020 Brunei Darussalam Figure – Resolving Insolvency in Brunei Darussalam and comparator economies – Measure of Quality Brunei Darussalam 5 3 1 1.5 Bhutan 1 2 1 0 Indonesia 5 3 2 0.5 Malaysia 2 3 2 0.5 Philippines 5.5 2.5 3 3 OECD high income 5.3 2.8 2.1 1.9 East Asia & Pacific 3.7 2.3 1.3 1 0 2 4 6 8 10 12 14 16 Sub-Indicator Score Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3) Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Figure – Resolving Insolvency in Brunei Darussalam and comparator economies – Recovery Rate Recovery rate(cents on the dollar) 90 81.0 80 70 65.5 60 50 47.2 40 35.5 30 21.1 20 10 0 No Practice Brunei Darussalam Bhutan Indonesia Malaysia Philippines East Asia & Pacific Page 59 Doing Business 2020 Brunei Darussalam Details – Resolving Insolvency in Brunei Darussalam Indicator Answer Score Proceeding foreclosure After Mirage's default, BizBank would enforce its security interest over Mirage's assets as the debenture holder and initiate foreclosure proceeding in the High Court Outcome piecemeal sale The hotel will stop operating and Mirage's assets will be sold piecemeal upon the completion of insolvency proceeding. Usually the assets will be sold through tender sale. Time (in years) 2.5 The foreclosure procedure takes approximate 2.5 years until BizBank is repaid some or all of the money owed to it. The delay is largely due to the possible delaying tactics adopted by Mirage. When the BizBank tries to foreclose the assets, it is likely that Mirage would file for an injunction at the Court. It takes at least 1 year for the Court to hold several hearings until the execution order is granted to BizBank. Then the preparation and execution of the assets sale would take at least an additional 1 year until BizBank receives the sales proceeds. Cost (% of estate) 3.5 The costs associated with the case would amount to approximately 4% of the value of the debtor's estate; Main components of the costs incurred during the insolvency process include attorney fees (up to 2%), insolvency representative fees (1%), fees of accountants, assessors, inspectors and other professionals (1%). Recovery rate 47.2 (cents on the dollar) Page 60 Doing Business 2020 Brunei Darussalam Details – Resolving Insolvency in Brunei Darussalam – Measure of Quality Answer Score Strength of insolvency framework index (0-16) 10.5 Commencement of proceedings index (0-3) 3.0 What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may file for 1.0 both liquidation and reorganization Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (a) Yes, a creditor 1.0 may file for both liquidation and reorganization What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) (a) Debtor is 1.0 Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value generally unable to of its assets pay its debts as they mature Management of debtor's assets index (0-6) 5.0 Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the No 0.0 debtor? Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? Yes 1.0 Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0 Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0 Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of Yes 1.0 insolvency proceedings? Does the insolvency framework assign priority to post-commencement credit? (b) Yes over ordinary 1.0 unsecured creditors but not over secured creditors Reorganization proceedings index (0-3) 1.5 Which creditors vote on the proposed reorganization plan? (a) All creditors 0.5 Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as Yes 1.0 what they would obtain in a liquidation? Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote No 0.0 separately and are creditors in the same class treated equally? Creditor participation index (0-4) 1.0 Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency No 0.0 representative? Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? No 0.0 Does the insolvency framework provide that a creditor has the right to request information from the insolvency No 0.0 representative? Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting Yes 1.0 creditors' claims? Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.” Page 61 Doing Business 2020 Brunei Darussalam Employing Workers Doing Business presents detailed data for the employing workers indicators on the Doing Business website (http://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business. The most recent round of data collection was completed in May 2019. See the methodology for more information. What the indicators measure Case study assumptions Hiring To make the data comparable across economies, several assumptions about the worker and the (i) whether fixed-term contracts are prohibited for permanent business are used. tasks; (ii) maximum cumulative duration of fixed-term contracts; (iii) length of the maximum probationary period; (iv) minimum The worker: wage;(v) ratio of minimum wage to the average value added per - Is a cashier in a supermarket or grocery store, age 19, with one year of work experience. worker. - Is a full-time employee. - Is not a member of the labor union, unless membership is mandatory. Working hours (i) maximum number of working days allowed per week; (ii) The business: premiums for work: at night, on a weekly rest day and overtime; - Is a limited liability company (or the equivalent in the economy). (iii) whether there are restrictions on work at night, work on a - Operates a supermarket or grocery store in the economy’s largest business city. For 11 weekly rest day and for overtime work; (iv) length of paid annual economies the data are also collected for the second largest business city. leave. - Has 60 employees. - Is subject to collective bargaining agreements if such agreements cover more than 50% of the Redundancy rules food retail sector and they apply even to firms that are not party to them. (i) whether redundancy can be basis for terminating workers; (ii) - Abides by every law and regulation but does not grant workers more benefits than those whether employer needs to notify and/or get approval from third mandated by law, regulation or (if applicable) collective bargaining agreements. party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment. Redundancy cost (i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected. Page 62 Doing Business 2020 Brunei Darussalam Employing Workers - Brunei Darussalam Details – Employing Workers in Brunei Darussalam Answer Hiring Fixed-term contracts prohibited for permanent tasks? No Maximum length of a single fixed-term contract (months) No limit Maximum length of fixed-term contracts, including renewals (months) No limit Minimum wage applicable to the worker assumed in the case study (US$/month) 0.0 Ratio of minimum wage to value added per worker 0.0 Maximum length of probationary period (months) n.a. Working hours Standard workday 8.0 Maximum number of working days per week 6.0 Premium for night work (% of hourly pay) 0.0 Premium for work on weekly rest day (% of hourly pay) 50.0 Premium for overtime work (% of hourly pay) 50.0 Restrictions on night work? No Restrictions on weekly holiday? No Restrictions on overtime work? No Paid annual leave for a worker with 1 year of tenure (working days) 7.0 Paid annual leave for a worker with 5 years of tenure (working days) 14.0 Paid annual leave for a worker with 10 years of tenure (working days) 14.0 Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 11.7 Redundancy rules Dismissal due to redundancy allowed by law? Yes Third-party notification if one worker is dismissed? No Third-party approval if one worker is dismissed? No Third-party notification if nine workers are dismissed? No Third-party approval if nine workers are dismissed? No Retraining or reassignment obligation before redundancy? No Priority rules for redundancies? No Priority rules for reemployment? No Redundancy cost Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 1.0 Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 4.0 Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 4.0 Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 3.0 Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 0.0 Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 0.0 Page 63 Doing Business 2020 Brunei Darussalam Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 0.0 Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 0.0 Unemployment protection after one year of employment? No Page 64 Doing Business 2020 Brunei Darussalam Business Reforms in Brunei Darussalam From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. =Doing Business reform making it easier to do business. = Change making it more difficult to do business. DB2020 Enforcing Contracts: Brunei Darussalam made enforcing contracts easier by publishing performance measurement reports. Resolving Insolvency: Brunei Darussalam made resolving insolvency easier by increasing the participation of creditors in insolvency proceedings. DB2019 Starting a Business: Brunei Darussalam made starting a business easier by merging the name verification into the incorporation application, expediting incorporation applications and eliminating the practice of stamping share certificates. Getting Electricity: Brunei Darussalam made getting electricity easier by decreasing the number of procedures needed to obtain a new connection. Brunei Darussalam also made getting electricity faster by setting enforceable time standards for connection services. Getting Credit: Brunei Darussalam improved access to credit information by starting to provide consumer and commercial credit scores to banks and financial institutions. DB2018 Starting a Business: Brunei Darussalam made starting a business faster by removing post-incorporation procedures. Dealing with Construction Permits: Brunei Darussalam made dealing with construction permits less cumbersome by streamlining the process of obtaining a building permit. Getting Electricity: Brunei Darussalam made getting electricity more difficult by increasing the number of procedures needed to obtain a new connection. At the same time, a new compensation scheme was introduced to incentivize the utility to improve reliability. Registering Property: Brunei made registering property easier by increasing the transparency of its land administration system and by improving the land administration system’s dispute resolution mechanisms. Getting Credit: Brunei Darussalam strengthened access to credit by adopting a new law on secured transactions that establishes a unified legal framework for movable assets and creates a modern, notice-based collateral registry. The law also establishes priority rules for secured creditors inside and outside of insolvency proceedings as well as allows for out of court enforcement. Protecting Minority Investors: Brunei Darussalam strengthened minority investor protections by increasing shareholder rights and role in major corporate decisions, clarifying ownership and control structures and requiring greater corporate transparency. Paying Taxes: Brunei Darussalam made paying taxes easier by introducing an online system for filing and paying labor contributions. Trading across Borders: Brunei Darussalam made exporting and importing easier by enhancing the Brunei Darussalam National Single Window and the customs clearance process. Enforcing Contracts: Brunei Darussalam made enforcing contracts easier by introducing an electronic case management system for the use of judges and lawyers. DB2017 Getting Electricity: The utility in Brunei Darussalam streamlined the processes of reviewing applications, and the time to issue an excavation permit was reduced. In addition, Brunei Darussalam increased the reliability of power supply by rolling out a Supervisory Control and Data Acquisition (SCADA) automatic energy management system for the monitoring of outages and the restoration of service. Getting Credit: Brunei Darussalam strengthened access to credit by adopting a new insolvency law that contemplates protections for secured creditors during an automatic stay in reorganization proceedings. Brunei also improved access to credit information by beginning to distribute data from two utility companies. Protecting Minority Investors: Brunei Darussalam strengthened minority investor protections by clarifying ownership and control structures, making it easier to sue directors in case of prejudicial related-party transactions, and allowing the rescission of related-party transactions that harm the company. Paying Taxes: Brunei Darussalam made paying taxes easier by fully implementing an electronic system for filing and paying corporate income tax. Enforcing Contracts: Brunei Darussalam made enforcing contracts easier by introducing an electronic filing system as well as a platform that allows users to pay court fees electronically. Resolving Insolvency: Brunei Darussalam made resolving insolvency easier by adopting a new insolvency law that introduced a reorganization procedure and facilitated continuation of the debtor’s business during insolvency proceedings. Brunei Darussalam also introduced regulations for insolvency practitioners. Page 65 Doing Business 2020 Brunei Darussalam DB2016 Starting a Business: Brunei Darussalam made starting a business easier by improving online procedures and simplifying registration and post registration requirements. Paying Taxes: Brunei Darussalam made paying taxes easier and less costly for companies by merging contributions for the Employee Provident Fund and the Supplemental Pension Fund and increasing the capital allowance for industrial buildings. In addition, it reduced the corporate income tax rate, though it also abolished the partial exemption of income and introduced a flat rate. DB2015 Dealing with Construction Permits: Brunei Darussalam made dealing with construction permits easier by consolidating final inspections. Paying Taxes: Brunei Darussalam made paying taxes easier for companies by allowing joint filing and payment of supplemental contributory pension and employee provident fund contributions and by introducing an online system for paying these 2 contributions. DB2014 Getting Credit: Brunei Darussalam improved access to credit information by establishing a public credit registry. DB2013 Dealing with Construction Permits: Brunei Darussalam made dealing with construction permits easier by creating a one-stop shop for preconstruction approvals. Paying Taxes: Brunei Darussalam made paying taxes less costly for companies by reducing the profit tax rate. DB2012 Getting Electricity: Brunei Darussalam made getting electricity easier by establishing a one-stop shop and reducing the time required to obtain an excavation permit. DB2011 Starting a Business: Brunei Darussalam made starting a business easier by improving efficiency at the company registrar and implementing an electronic system for name searches. Paying Taxes: Brunei Darussalam reduced the corporate income tax rate from 23.5% to 22% while also introducing a lower tax rate for small businesses, ranging from 5.5% to 11%. Trading across Borders: The introduction of an electronic customs system in Brunei Darussalam made trading easier. Employing Workers: Brunei Darussalam instituted mandatory minimum annual leave and reduced notice periods applicable in case of redundancy dismissals. DB2010 Paying Taxes: Brunei Darussalam made paying taxes less costly for companies by reducing the corporate income tax rate. Page 66 Doing Business 2020 Brunei Darussalam Page 67