Brunei Darussalam Economy Profile - Doing Business 2019
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Doing Business 2019 Brunei Darussalam Economy Profile of Brunei Darussalam Doing Business 2019 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 post-filing 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 Labor market regulation Flexibility in employment regulation and aspects of job quality Page 2
Doing Business 2019 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 labor market regulation. Although Doing Business does not present rankings of economies on the labor market regulation 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 reports, which exhaustively cover business regulation and reform in different cities and regions within a nation. These reports 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 report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report 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. More about Doing Business (PDF, 5MB) Page 3
Doing Business 2019 Brunei Darussalam Ease of Doing Business in DB 2019 Rank Region East Asia & Pacific 190 1 Brunei Darussalam Income Category High income 55 DB 2019 Ease of doing business score Population 428,697 0 100 City Covered Bandar Seri Begawan 72.03 DB 2019 Ease of Doing Business Score 0 100 80.60: Malaysia (Rank: 15) 73.64: China (Rank: 46) 72.03: Brunei Darussalam (Rank: 55) 67.96: Indonesia (Rank: 73) 63.41: Regional Average (East Asia & Pacific) 57.68: Philippines (Rank: 124) Note: The ease of doing business score captures the gap of each economy from the best regulatory performance observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s ease of doing business score is reflected on a scale from 0 to 100, where 0 represents the lowest and 100 represents the best performance. The ease of doing business ranking ranges from 1 to 190. Rankings on Doing Business topics - Brunei Darussalam 1 1 16 31 28 48 55 55 67 64 84 82 Rank 109 136 142 149 163 190 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 Ease of Doing Business Score on Doing Business topics - Brunei Darussalam 100.00 100 94.92 86.57 80 73.49 74.03 65.00 58.70 60.95 Score 60 55.11 51.48 40 20 0 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 Page 4
Doing Business 2019 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 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally start and formally operate To make the data comparable across economies, several assumptions about the a company (number) business and the 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 - Is a limited liability company (or its legal equivalent). If there is more than one type city of limited liability company in the economy, the most common among domestic firms • Postregistration (for example, social security is chosen. Information on the most common form is obtained from incorporation registration, company seal) lawyers or the statistical office. - Operates in the economy’s largest business city. For 11 economies the data are • Obtaining approval from spouse to start a business or to leave the home to register the also collected for the second largest business city. company - The entire office space is approximately 929 square meters (10,000 square feet). - Is 100% domestically owned and has five owners, none of whom is a legal entity; • Obtaining any gender specific document for has a start-up capital of 10 times income per capita and has a turnover of at least company registration and operation or national 100 times income per capita. identification card - Performs general industrial or commercial activities, such as the production or sale of goods or services to the public. The business does not perform foreign trade Time required to complete each procedure activities and does not handle products subject to a special tax regime, for example, (calendar days) liquor or tobacco. It does not use heavily polluting production processes. • Does not include time spent gathering - Leases the commercial plant or offices and is not a proprietor of real estate and the information amount of the annual lease for the office space is equivalent to the income per • Each procedure starts on a separate day (2 capita. procedures cannot start on the same day) - Does not qualify for investment incentives or any special benefits. - Has at least 10 and up to 50 employees one month after the commencement of • Procedures fully completed online are recorded operations, all of whom are domestic nationals. as ½ day - Has a company deed that is 10 pages long. • Procedure is considered completed once final document is received The owners: • No prior contact with officials - Have reached the legal age of majority. If there is no legal age of majority, they are assumed to be 30 years old. Cost required to complete each procedure (% of - Are sane, competent, in good health and have no criminal record. income per capita) - Are married and the marriage is monogamous and registered with the authorities. - Where the answer differs according to the legal system applicable to the woman or • Official costs only, no bribes man in question (as may be the case in economies where there is legal plurality), the • No professional fees unless services required by answer used will be the one that applies to the majority of the population. law or commonly used in practice Paid-in minimum capital (% of income per capita) • Funds deposited in a bank or with third party before registration or up to 3 months after incorporation Page 5
Doing Business 2019 Brunei Darussalam Starting a Business - Brunei Darussalam Standardized Company Legal form Private Limited Company Paid-in minimum capital requirement BND 0 City Covered Bandar Seri Begawan Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Procedure – Men (number) 3 6.8 4.9 1 (New Zealand) Time – Men (days) 5 25.9 9.3 0.5 (New Zealand) Cost – Men (% of income per capita) 1.2 17.8 3.1 0.0 (Slovenia) Procedure – Women (number) 4 6.9 4.9 1 (New Zealand) Time – Women (days) 6 26.0 9.3 0.5 (New Zealand) Cost – Women (% of income per capita) 1.2 17.8 3.1 0.0 (Slovenia) Paid-in min. capital (% of income per capita) 0.0 4.0 8.6 0.0 (117 Economies) Figure – Starting a Business in Brunei Darussalam and comparator economies – Ranking and Score DB 2019 Starting a Business Score 0 100 94.92: Brunei Darussalam (Rank: 16) 93.52: China (Rank: 28) 83.29: Regional Average (East Asia & Pacific) 82.78: Malaysia (Rank: 122) 81.22: Indonesia (Rank: 134) 71.97: Philippines (Rank: 166) 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 2019 Brunei Darussalam Figure – Starting a Business in Brunei Darussalam – Procedure, Time and Cost Time (days) Cost (% of income per capita) 6 0.8 0.7 Cost (% of income per capita) 5 0.6 4 Time (days) 0.5 3 0.4 0.3 2 0.2 1 0.1 0 0 1 3 5 *6 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 2019 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 1 day no charge home in order to 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. 3 Submit incorporation documents and pay registration fees 2 days BDN 300 (flat fee for Agency : Registry of Companies and Business Names Division, Ministry of registering an Finance industrial company) Registration is done at www.roc.gov.bn. As of May 2017, the online system has been enhanced to 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. 5 Make a company seal or stamp 3 days BND 185 Agency : Seal-making shop A company seal is not required for most transactions, but is used in practice. Newly incorporated companies will in practice get a seal or a stamp. The company seal is used on share certificates or official documents while the stamp is used frequently for day to day activities, such as invoices. 6 Register for Employees Provident Fund 1 day, simultaneous no charge Agency : Provident Fund with previous Once the company successfully incorporated, the information will be procedure 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 at the same time as registration of the company. 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 2019 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 2018. See the methodology for more information What the indicators measure Case study assumptions Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the (number) construction company, the warehouse project and the utility connections are used. • Submitting all relevant documents and obtaining The construction company (BuildCo): all necessary clearances, licenses, permits and certificates - Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second • Submitting all required notifications and receiving largest business city. all necessary inspections - Is 100% domestically and privately owned; has five owners, none of whom is a • Obtaining utility connections for water and legal entity. Has a licensed architect and a licensed engineer, both registered with sewerage the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or • Registering and selling the warehouse after its completion topographical experts. - Owns the land on which the warehouse will be built and will sell the warehouse Time required to complete each procedure upon its completion. (calendar days) The warehouse: • Does not include time spent gathering information - Will be used for general storage activities, such as storage of books or stationery. - Will have two stories, both above ground, with a total constructed area of • Each procedure starts on a separate day— approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 though procedures that can be fully completed meters (9 feet, 10 inches) high and will be located on a land plot of approximately online are an exception to this rule 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the • Procedure is considered completed once final warehouse is valued at 50 times income per capita. document is received - Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further • No prior contact with officials documentation or getting prior approvals from external agencies, these are counted Cost required to complete each procedure (% of as procedures. income per capita) - Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements). • Official costs only, no bribes The water and sewerage connections: Building quality control index (0-15) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there • Quality of building regulations (0-2) is no water delivery infrastructure in the economy, a borehole will be dug. If there is • Quality control before construction (0-1) no sewerage infrastructure, a septic tank in the smallest size available will be installed or built. • Quality control during construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average • Quality control after construction (0-3) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 • Liability and insurance regimes (0-2) gallons) a day. • Professional certifications (0-4) - 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 2019 Brunei Darussalam Dealing with Construction Permits - Brunei Darussalam Standardized Warehouse Estimated value of warehouse BND 2,075,582 City Covered Bandar Seri Begawan Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Procedures (number) 20 15.1 12.7 None in 2017/18 Time (days) 83 133.5 153.1 None in 2017/18 Cost (% of warehouse value) 1.9 1.9 1.5 None in 2017/18 Building quality control index (0-15) 12.0 9.1 11.5 15.0 (3 Economies) Figure – Dealing with Construction Permits in Brunei Darussalam and comparator economies – Ranking and Score DB 2019 Dealing with Construction Permits Score 0 100 86.96: Malaysia (Rank: 3) 73.49: Brunei Darussalam (Rank: 55) 70.71: Regional Average (East Asia & Pacific) 68.58: Philippines (Rank: 94) 66.57: Indonesia (Rank: 112) 65.16: China (Rank: 121) 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. 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 10
Doing Business 2019 Brunei Darussalam Figure – Dealing with Construction Permits in Brunei Darussalam and comparator economies – Measure of Quality 15 13.0 13.0 13.0 12.0 11.1 Index score 10 9.1 5 0 Brunei Darussalam China Indonesia Malaysia Philippines East 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 15,567 Agency : Private According to the Building Control Order (2014) and Building Control Regulations (2014), an independent accredited checker must be hired by BuildCo. This is a new rule where an independent checker has the responsibility to verify compliance of building plans with regulations. All building plans are given to the accredited checker along with the survey plan. 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 conduct inspections during construction, and to issue a compliance certificate upon completion of the building to certify that the building is in compliance with the regulations and was built according to the approved plans. 6 Obtain planning 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 visit the Fire department to have the documents stamped and to pay for the fire department fees. This process is completed in person. This approval is needed to obtain the building permit from ABCi Page 11
Doing Business 2019 Brunei Darussalam 8 Obtain development 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 review and approval. 9 Obtain permit to carry out building works from ABCi 1 day no charge Agency : ABCi The details of all the hired licensed professionals must be provided to ABCi to obtain the permit to carry out building works. 10 Supervising qualified person submits the notice of completion of all piling 1 day no charge works 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 1 day no charge works have 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 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 1 day no charge Building Works Agency : ABCi According to Article 15 (1) (d) of the Building Control Order (2014), the Builder (BuildCo) must also submit a 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 inspection for water test pressure 1 day no charge Agency : Water Services of JKR (ABCi) Once the water pressure test has been done, there is an inspection to verify the water pressure test report. BuildCo will have to inform water services that both the water pressure test and the inspection have been concluded. 15 Inform water services of the water pressure test result and physical 1 day no charge inspection 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 joint final inspection 1 day no charge Agency : ABCi A joint inspection is carried out by ABCi where the Fire department, the water department, roads department, sewerage department and electrical department will all inspect the building. If no discrepancies are discovered, the occupancy permit is issued within 2 weeks. Page 12
Doing Business 2019 Brunei Darussalam 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 must be done in person as online services are not available for this payment. This 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. Proof of the payment for the fire department inspection must be submitted to receive the occupancy permit. 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 13
Doing Business 2019 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; 1.0 Free of charge; In official gazette. Which requirements for obtaining a building permit are clearly specified in the building List of required 1.0 regulations or on any 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 Private firm. 1.0 compliance with existing 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? Inspections by 1.0 (0-2) 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 Yes, final 2.0 with the approved plans and regulations? (0-2) inspection 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 No party is held 0.0 once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the law. Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 0.0 structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law or Decennial Insurance)? (0-1) to obtain insurance . Professional certifications index (0-4) 4.0 What are the qualification requirements for the professional responsible for verifying that the Minimum number 2.0 architectural plans or drawings are in compliance with existing building regulations? (0-2) of years of experience; University degree in architecture or engineering; Being a registered architect or engineer; Passing a certification exam. Page 14
Doing Business 2019 Brunei Darussalam What are the qualification requirements for the professional who supervises the construction Minimum number 2.0 on the ground? (0-2) of 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 2019 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 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions about the (number) warehouse, the electricity connection and the monthly consumption are used. • Submitting all relevant documents and obtaining The warehouse: all necessary clearances and permits - Is owned by a local entrepreneur and is used for storage of goods. • Completing all required notifications and - Is located in the economy’s largest business city. For 11 economies the data are receiving all necessary inspections also collected for the second largest business city. • Obtaining external installation works and possibly - Is located in an area where similar warehouses are typically located and is in an purchasing material for these works area with no physical constraints. For example, the property is not near a railway. - Is a new construction and is being connected to electricity for the first time. • Concluding any necessary supply contract and - Has two stories with a total surface area of approximately 1,300.6 square meters obtaining final supply (14,000 square feet). The plot of land on which it is built is 929 square meters Time required to complete each procedure (10,000 square feet). (calendar days) The electricity connection: • Is at least 1 calendar day - Is a permanent one with a three-phase, four-wire Y connection with a subscribed • Each procedure starts on a separate day capacity of 140-kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 • Does not include time spent gathering kilowatt (kW). information - Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more • Reflects the time spent in practice, with little common in the area where the warehouse is located and requires works that involve follow-up and no prior contact with officials the crossing of a 10-meter road (such as by excavation or overhead lines) but are all Cost required to complete each procedure (% of carried out on public land. There is no crossing of other owners’ private property income per capita) because the warehouse has access to a road. - Does not require work to install the internal wiring of the warehouse. This has • Official costs only, no bribes already been completed up to and including the customer’s service panel or • Value added tax excluded switchboard and the meter base. The reliability of supply and transparency of The monthly consumption: tariffs index (0-8) - It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 • Duration and frequency of power outages (0–3) p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that • Tools to monitor power outages (0–1) there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (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 • Regulatory monitoring of utilities’ performance supplier. (0–1) - Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation • Financial deterrents limiting outages (0–1) purposes only 30 days are used. • 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 the ranking on the ease of getting electricity. Page 16
Doing Business 2019 Brunei Darussalam Getting Electricity - Brunei Darussalam Standardized Connection Price of electricity (US cents per kWh) 5.2 Name of utility Department of Electrical Services (at the Ministry of Energy) City Covered Bandar Seri Begawan Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Procedures (number) 5 4.3 4.5 3 (25 Economies) Time (days) 35 65.0 77.2 18 (3 Economies) Cost (% of income per capita) 40.1 625.1 64.2 0.0 (3 Economies) Reliability of supply and transparency of tariff 7 4.0 7.5 8.0 (27 Economies) index (0-8) Figure – Getting Electricity in Brunei Darussalam and comparator economies – Ranking and Score DB 2019 Getting Electricity Score 0 100 99.27: Malaysia (Rank: 4) 92.01: China (Rank: 14) 87.45: Philippines (Rank: 29) 86.57: Brunei Darussalam (Rank: 31) 86.38: Indonesia (Rank: 33) 75.06: 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. Page 17
Doing Business 2019 Brunei Darussalam Figure – Getting Electricity in Brunei Darussalam – Procedure, Time and Cost Time (days) Cost (% of income per capita) 35 40 30 35 Cost (% of income per capita) 30 25 Time (days) 25 20 20 15 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 reflected here, see the summary below. Figure – Getting Electricity in Brunei Darussalam and comparator economies – Measure of Quality 8 8 7 7 6 5.8 6 6 Index score 5 4.0 4 3 2 1 0 Brunei Darussalam China Indonesia Malaysia Philippines East Asia & Pacific Page 18
Doing Business 2019 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 : Authority for Building and Construction Industry (ABCi) 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 ABCi via OneBiz. From there, ABCi will take care of the excavation permit, and coordinate with DES for the technical study for the connection. Once the site survey is carried- out,ABCi 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 ABCi, they will schedule a site survey. In the majority of cases the client (or his contractor) will 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 21 calendar days BND 15,000 contractor 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). For capacities larger than 215 kVA (300 Amp) a substation will also be needed. 4 Obtain test certification on internal wiring from professional engineer 1 calendar day BND 0 Agency : Certified professional engineer (PE) A registered professional engineer (PE) will carry out the internal wiring tests with the presence of the electrical contractor who did the installation of the electrical wiring and applied for power supply on behalf of the client. 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 submits 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 2019 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) 0.5 System average interruption frequency index (SAIFI) 0.4 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 No supply? 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 Yes exceed a certain cap? 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/Site Pages/Electricity%20 Tariff.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 2019 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 2018. See the methodology for more information. What the indicators measure Case study assumptions Procedures to legally transfer title on To make the data comparable across economies, several assumptions about the immovable property (number) parties to the transaction, the property and the procedures are used. • Preregistration procedures (for example, The parties (buyer and seller): checking for liens, notarizing sales agreement, paying property transfer taxes) - Are limited liability companies (or the legal equivalent). - Are located in the periurban area of the economy’s largest business city. For 11 • Registration procedures in the economy's largest economies the data are also collected for the second largest business city. business city. - Are 100% domestically and privately owned. • Postregistration procedures (for example, filling - Have 50 employees each, all of whom are nationals. title with municipality) - Perform general commercial activities. Time required to complete each procedure The property (fully owned by the seller): (calendar days) - Has a value of 50 times income per capita, which equals the sale price. • Does not include time spent gathering - Is fully owned by the seller. information - Has no mortgages attached and has been under the same ownership for the past • Each procedure starts on a separate day - 10 years. though procedures that can be fully completed - Is registered in the land registry or cadastre, or both, and is free of title disputes. online are an exception to this rule - Is located in a periurban commercial zone, and no rezoning is required. - Consists of land and a building. The land area is 557.4 square meters (6,000 • Procedure is considered completed once final square feet). A two-story warehouse of 929 square meters (10,000 square feet) is document is received located on the land. The warehouse is 10 years old, is in good condition, has no • No prior contact with officials heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its Cost required to complete each procedure (% of entirety. property value) - Will not be subject to renovations or additional construction following the purchase. • Official costs only (such as administrative fees, - Has no trees, natural water sources, natural reserves or historical monuments of duties and taxes). any kind. - Will not be used for special purposes, and no special permits, such as for • Value Added Tax, Capital Gains Tax and illicit residential use, industrial plants, waste storage or certain types of agricultural payments are excluded activities, are required. - Has no occupants, and no other party holds a legal interest in it. Quality of land administration index (0-30) • 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 2019 Brunei Darussalam Registering Property - Brunei Darussalam Indicator Brunei East Asia & OECD high Best Regulatory Darussalam Pacific income Performance Procedures (number) 7 5.4 4.7 1 (4 Economies) Time (days) 298.5 72.6 20.1 1 (New Zealand) Cost (% of property value) 0.6 4.5 4.2 0.0 (Saudi Arabia) Quality of the land administration index (0-30) 18.0 16.3 23.0 None in 2017/18 Figure – Registering Property in Brunei Darussalam and comparator economies – Ranking and Score DB 2019 Registering Property Score 0 100 80.80: China (Rank: 27) 80.38: Malaysia (Rank: 29) 61.67: Indonesia (Rank: 100) 57.56: Regional Average (East Asia & Pacific) 57.56: Philippines (Rank: 116) 51.48: Brunei Darussalam (Rank: 142) 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. 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 22
Doing Business 2019 Brunei Darussalam Figure – Registering Property in Brunei Darussalam and comparator economies – Measure of Quality 30 27.5 25 23.7 Index score 20 18.0 16.3 14.5 15 12.5 10 5 0 Brunei Darussalam China Indonesia Malaysia Philippines East Asia & Pacific Details – Registering Property in Brunei Darussalam – Procedure, Time and Cost No. Procedures Time to Complete Associated Costs 1 Checking for encumbrances by Lawyer 1 day BND 8; (BND 8 (BND Agency : Land Office 3 for searching on the The lawyer acting on behalf of both seller and buyer will do a land search. The property, buyer, and lawyer will verify that the seller is rightful owner and is entitled to sell the seller plus BND 5 for property. In order to do that, it is common to request a search not only for the survey plan extract)) property, but also for the seller and the buyer(that is, a search in which any property rights registered under the name of the seller is listed). This is done because in Brunei there are restrictions on the number of properties that someone can own. If all the information has been computerized, then the results can be obtained in one day. In this case, the Lands Department gives a computer printout of the information requested. On the contrary, the results of the search can take more time. It is also common to ask for a survey extract of the property at the Lands Department. 2 Lawyer conducts a winding up search at the Court Less than one day, BND 2; (BND 2 (BND Agency : High Court online 1 per name)) The lawyer conducts a search at the High Court to determine whether any of the parties involved in the transaction has had a bankruptcy/winding up case or has any pending cases that could affect the property. Since 2016 this search can be done online, purchasing a ticket to search for a limited amount of time. Most of the records since 2005 are available. If the search would involve a case prior to that, the lawyer would have to request this information physically at the court. Before you had to fill in a form and provide a name plus an identifier. Now you can search this information online. This information cannot be obtained at the Lands Department. 3 Sale-purchase agreement is signed 1 day BND 200; (BND 100 - Agency : Land Office 300) The sale-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 would draft the sale and purchase agreement, the fee schedule of the Legal Profession Act (Chapter 132), Advocates and Solicitors (Remuneration) Rules would apply. Page 23
Doing Business 2019 Brunei Darussalam 4 Submit application via Lands Department in order to obtain approval for 280 days BND 2; (BND 1 for the Memorandum of Transfer by "His Majesty in Council" each form) Agency : Land Office Local companies in Brunei cannot own land. However, they can register long term lease interests over land 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" must be completed and submitted to the Land Office. The Land office will give an appointment to return and sign the MOT, usually within 2 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 that all the information has been filled in appropriately, and will check the technicalities of the transactions, issuing a report to the Ministry of Development. The Ministry would then review this information and would review 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 to be paid as stamp duty, the registration fee and land tax must be paid. The proof of payment must be provided to the Land Office. The procedure to register an ownership transfer and a lease interest is the same. However, the time to obtain the approval of His Majesty in Council differs. On average, the approval of a lease interests 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 an approval. 5 Visit of a 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. 6 Pay stamp duty and sign the MOT at the Lands Department 1 day BND 12,457; (BND 6 Agency : Land Office for every BND 1000 The Seller's nominee and the Buyer's nominee will attend to the Land Office to of the assessed value sign the Memorandum of Transfer (MOT), and the Full Payment Form in the of the property + presence of an officer from the Land Office. Registration fee of BND 1 + Land Tax Since in the case study there will be no rents paid monthly, the stamp duty would be calculated on the total consideration of the lease (which equals the property BND 150 per quarter value). acre for commercial land per year (not counted in estimations)) 7 Register property transfer at the Land Office/Registry 15 days no charge Agency : Land Office The final transfer is registered at the Land Registry 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 24
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