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Hiring in Brunei

Brunei, officially known as the Nation of Brunei, is a country in Asia. Bandar Seri Begawan is the capital and the largest city of Brunei. Brunei is rich in natural resources, whereby crude oil and natural gas production accounts for most of the country’s GDP. Its main trading partners are Japan, Malaysia, Singapore, India and the United States. Global PEO or Employer of Record (EOR) play a pivotal role in providing companies with services related to hiring employees, and ensuring compliance with Brunei’s legal and tax regulations. Employment regulations including probation, holidays and termination are covered by the Labor Code. The Labor Code stipulates that employees are entitled to 12 days of paid annual leave after one year of service. Individuals are exempt from income tax in Brunei. Global PEO’s or Employer of Record (EOR) facilitate companies by ensuring compliance with Brunei’s Labor Code and tax laws.

statutory labor requirements

Probation Period

  • The qualifying period is the same as the employee's probation period, which may not exceed 90 consecutive days.

Annual Leave

  • Once they have worked for a company for a full year, Brunei employees receive 12 paid days of annual leave. 
  • Two extra leave days are added after five years of service.

Public Holidays

  1. New Year's Day (1st January)
  2. Lunar New Year (25th January)
  3. National Day (24th February)
  4. Prophet's Ascension
  5. First day of Ramadan
  6. Nuzul Al-Quran
  7. Eid al-Fitr
  8. Royal Brunei Armed Forces Day (1st June)
  9. His Majesty the Sultan's Birthday (15th July)
  10. Eid al-Adha
  11. Islamic New Year
  12. Prophet's Birthday
  13. Christmas Day (26th December)

Maternity Leave

  • The pregnant woman is entitled, because of her pregnancy, to maternity leave of 14 weeks, being 6 weeks before the birth and 8 weeks after the birth. 
  • Maternity leave under the Labor Code covers all women employees, including apprentices and trainees.

Paternity Leave

  • Currently, fathers in the private sector are not legally entitled to any paternity leave, while fathers in the public sector are given seven days of paid paternity leave

Sick Leave

  • Employees are entitled to five days of sick leave every year.

Work Hours

  • An employee shall not be required to work more than 8 hours in one day.
  • An employee shall not be required to work more than 44 hours in one week.

Overtime

  • An employee shall not be permitted to work overtime for more than 72 hours a month.
  • An employee shall not be permitted to work for more than 12 hours in any day.
  • For the purpose of calculating the payment due for overtime to an employee, his hourly basic rate of salary shall be calculated in accordance with the following formula:
    • in the case of a person employed on a monthly rate pay, 12 x the employee’s monthly basic rate of salary divided by 52 x44 hours.
    • in the case of a person employed on pieces’ rates, the total weekly salary at the basic rate of salary received divided by the total number of hours worked in the week.

Notice Period

  • The notice period for termination of contract depends on what is agreed in the contract. 
  • The length of notice period must be the same for both parties. 
  • If there is no notice period agreed by either party or included in the contract, the following notice period shall apply: -
    • If length of employment is less than 26 weeks, 1-day notice period
    • If length of employment is between 26 weeks and 2 years, 1 week notice period
    • If length of employment is between 2 and 5 years, then 2 weeks’ notice period
    • If length of employment is of 5 years or more, then 4 weeks’ notice period

Severance

  • The total salary due to an employee must be paid on his last day of employment if: -
  • He is dismissed on the grounds of misconduct 
  • His service is terminated by his employer If this is not possible, it must be paid within 3 working days from the date of dismissal or termination.

13th / 14th Month Pay

  • No
  • There is no statutory requirement to pay the 13th or 14th month salary.
  • Interestingly the labour code has put a cap on the bonuses that employees are entitled to pay.
  • This is capped at one and a half time the employee's salary, any overpayment will be an offence.
  • Remuneration other than wages are allowed, however those cannot be in alcoholic form.

income tax

  • Individuals are exempt from income tax in Brunei Darussalam.
  • Individuals who are partners are not subject to tax on their apportioned shares of partnership income.

 immigration   

  • Employers in Brunei Darussalam who wish to hire foreign workers are allocated quotas that permit them to employ foreign nationals. 
  • An applicant is advised to verify with his or her potential employer that an appropriate quota is available and is suitable for the employment position and nationality of the applicant. 
  • To work in Brunei Darussalam, foreign nationals must obtain employment visas, which are usually granted for an initial period of up to two years, and subsequently extended for two-year periods, if certain requirements are met. 
  • The following are the procedures to obtain an employment visa in Brunei Darussalam: 
    • The employer must apply to the Department of Labor for a foreign workers’ license by submitting an application through an approved employment agency. The application must state the employment position and nationality of the prospective employee. It takes about 14 working days or less for a foreign workers’ license to be issued. 
    • The employer must then enter into an employment contract with the employee, which must be filed with the Department of Labor. The employee may also be required to attend an interview. 
    • The employer must submit copies of the foreign workers’ license, employment contract and employee’s passport to the Department of Immigration, together with a security deposit to cover the employee’s repatriation expenses. It usually requires one to two weeks for an employment visa to be issued. 
    • An employment visa is initially granted on a temporary basis, usually for three months, during which the employee must undergo medical tests. The employee must also obtain an identity card, normally renewable every two years, which is issued by the Department of Immigration. 
    • On expiration of the initial temporary visa, if the results of the medical tests are satisfactory, an employment visa valid for a two-year period is normally granted.

Type of Visa/Permit

Documentation

Validity

Eligibility

Employment Visa

  • Two copies of foreign worker application form;
  • A copy of the identity card; passport for each applicant, owner or partner in the company;
  • A copy of the valid passport for every applicant;
  • Copies of approval letters from relevant government agencies (if applicable);
  • A list of local employees verified by the TAP;
  • Verification of mandatory registration from Job Centre Brunei;
  • A copy of certificate equivalent to the occupation should the occupation require qualifications;
  • A copy of the tenancy agreement for office, or company and worker residence (If applicable)

2 years (can be extended)

  • To work in Brunei Darussalam, foreign nationals must obtain employment visas
  • These are subject to labor quotas

value added tax

Brunei does not have a VAT or sales tax

withholding tax

Dividends

  • Brunei does not levy withholding tax on dividends that have been assessed to tax, regardless of whether paid to a resident or a nonresident

Interest

  • Interest paid to a nonresident is subject to a 2.5% withholding tax

Royalties

  • Royalties paid to a nonresident are subject to a 10% withholding tax

Fees for Technical Services

  • Technical services fees are subject to a 10% withholding tax
  • Fees paid for the use of scientific, technical industrial or commercial knowledge or information are subject to a 10% withholding tax

Type of Payment

Residents

Nonresidents

 

Company

Individual

Company 

Individual

Dividends

0%

0%

0%

0%

Interest

0%

0%

2.5%

2.5%

Royalties

0%

0%

10%

10%

Technical Service Fee

0%

0%

10%

10%

termination

A termination of contract may occur when: 

    • The work specified in the contract has been completed or when a date specified in the contract for the expiry of the contract has been reached. 
    • Either party has decided to end the contract with appropriate notice in accordance with terms of the contract. 
    • There has been a breach of contract and the other party wishes to terminate the contract. 
  • The notice period for termination of contract depends on what is agreed in the contract. 
  • The length of notice period must be the same for both parties. 
  • If there is no notice period agreed by either party or included in the contract, the following notice period shall apply: -
    • If length of employment is less than 26 weeks, 1-day notice period
    • If length of employment is between 26 weeks and 2 years, 1 week notice period
    • If length of employment is between 2 and 5 years, then 2 weeks’ notice period
    • If length of employment is of 5 years or more, then 4 weeks’ notice period

statutory benefits

  • These are mandatory benefits as postulated by law
  • These include probationary period, annual leave, public holidays, sick leave, maternity leave, overtime pay, notice period, 13th month pay and severance pay
  • Statutory benefits also include social security benefits

Statutory Benefits

Probationary Period

Annual Leave

Public Holidays

Maternity Leave

Paternity Leave

Sick Leave

Overtime Pay

Notice Period

Severance Pay

Social Security Benefits

ease of doing business

  • The ease of doing business index is an index created by Simeon Djankov, an economist at the Central and Eastern Europe sector of the World Bank Group.
  • Higher rankings (a low numerical value) indicate better, usually simpler, regulations for businesses and stronger protections of property rights.
  • According to the World Bank Brunei ranked 54th in the World in 2019 in terms of ease of doing business.

employee accruals   

 

   
Christmas Bonus%
0%
Christmas Bonus Over Vacations % 0%
Severance per Year % Only the outstanding salary must be paid
0%
Vacations % Brunei employees receive 12 paid days of annual leave (3.29% of annual salary)
Notice % Employees are entitled to 30 days of notice period for one year of service or more (8.24%)
Christmas Bonus Over Notifications% 0%
Vacations Plus% 0%
Total percentage of Salary (yearly) The total employment accruals as a percentage of salary per anum are equal to 11.62%

 

employer accruals

Additional information (Country Accruals)

   
maximum mandatory contribution

98

TAP

5.00%

SCP

3.50%

Vacations

4.93%

Description

The prescribed contribution rate at the moment is 8.5% (wages of employee) and (8.5%) from the employer.

Note

5% for TAP and 3.5% for SCP.
The TAP contribution must be rounded up to the next dollar and SCP contribution has to be rounded up to two decimal points.
For SCP, Employer's minimum contribution must be $17.50 for employee's salary less than $500.00. Employer and Employee's maximum mandatory contribution is $98.00 each (based on salary $2,800.00). For salary more than $2800.00, the mandatory contribution is capped to $98.00 and any excess will be regarded as voluntary contribution.

 

Employer Accruals Additional information

    Employment Accruals
Annual Leave Brunei employees receive 12 paid days of annual leave. This equals 3.28% (12/365 days) of annual income
Maternity Leave The pregnant woman is entitled, because of her pregnancy, to maternity leave of 14 weeks, being 6 weeks before the birth and 8 weeks after the birth. This equals 26.9% (14/52 weeks) of annual income
Paternity Leave Fathers in the public sector are given seven days of paid paternity leave This equals 1.91% (7/365 days) of annual income
Sick Leave Employees are entitled to five days of sick leave every year. This equals 1.37% (5/365 days) of annual income
Overtime An employee shall not be permitted to work overtime for more than 72 hours a month.
An employee's hourly basic rate of salary shall be calculated in accordance with the following formula:
• in the case of a person employed on a monthly rate pay, 12 x the employee’s monthly basic rate of salary divided by 52 x44 hours.
• in the case of a person employed on pieces’ rates, the total weekly salary at the basic rate of salary received divided by the total number of hours worked in the week.
Overtime equals 32,695.4 BND
Social Security Under the TAP scheme, employers must make a contribution at a minimum rate of 5% for their employees.
Under the SCP scheme, the employees’ and employers’ contributions are calculated at a rate of 3.5% of basic salaries of the employees.
This equals 8.5% of annual income

 

 

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