Brunei on EU blacklist of global tax havens

Reading Time: 2 minutes

Brunei panoramaThe Panama Papers sent shivers across the high society of the world’s wealthy and influential – and brought back the attention to global tax havens that are deemed uncooperative in the fight against international tax dodging and money laundering.

While most of them are located in the Caribbean, three are in Asia: Hong Kong, Maldives – and Brunei.

The list was published last year by the European Commission as part of a crackdown on multinational companies trying to avoid paying tax in the 28-nation bloc. It also proposed including reforms to end sweetheart tax deals following a series of investigations into arrangements between EU countries and firms including Amazon, Apple and Starbucks.

But businessmen and private people can also outsource their assets to those tax havens – usually without anyone noticing. The Panama Papers leak has returned these places to the public eye as an international research association uncovered a global network of fraudsters who dodge taxes with the help of banks and law firms.

EU tax havens list

 

Although Brunei is a small player in the offshore space, it nevertheless is in the focus of international regulators as it has no tax information sharing agreements that comply with international standards and has been singled out for its lax approach towards preventing money laundering. It is also hard if not impossible to get information on ownership of companies domiciled in Brunei.

The absence of income tax, capital gains tax, income tax or other forms of wealth taxes and the Sultanate’s high level of banking secrecy is attractive for those wanting to park some money outside their home jurisdiction. While it can prove difficult for a non-resident to open a bank account, such things can be arranged through a legal representative. Corporations may be required to pay taxes, but it depends on the circumstances.

Offshore legislation was introduced in Brunei in 2000 as the country sought to attract foreign funds away from conventional money markets. New laws were drafted covering international banking, insurance, offshore companies, trusts, limited partnerships and registered agents. The Brunei International Finance Center was inaugurated to compete with other international offshore financial centers with the help of Robert Miller, a lawyer who helped setting up similar offshore centers in Bermuda and Labuan.

Inside Brunei 2013/14
Inside Brunei 2013/14
Buy now and get 42 page Brunei 2012 report FREE
$19.95

For offshore companies, Brunei has a fixed annual fee for any authorized share capital. This makes it ideal for fund raising or other types of businesses that have a large number of shareholders. Share capital cannot be in the local currency, but this doesn’t matter much since shareholders can use the Singapore dollar which is pegged 1:1 to the Brunei dollar.

Banking secrecy for for non-residents is granted by law, and penalties for breaking the Brunei banking secrecy are harsh: Jail for up to two years and a fine up to $100,000. A court order is required to disclose banking information, which is rarely if ever done even in cases foreign jurisdictions consider to be tax evasion. However, Brunei repeatedly stated that its courts will force disclosure in cases of money laundering or other severe financial crimes.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid

The Panama Papers sent shivers across the high society of the world's wealthy and influential - and brought back the attention to global tax havens that are deemed uncooperative in the fight against international tax dodging and money laundering. While most of them are located in the Caribbean, three are in Asia: Hong Kong, Maldives - and Brunei. The list was published last year by the European Commission as part of a crackdown on multinational companies trying to avoid paying tax in the 28-nation bloc. It also proposed including reforms to end sweetheart tax deals following a series of investigations...

Reading Time: 2 minutes

Brunei panoramaThe Panama Papers sent shivers across the high society of the world’s wealthy and influential – and brought back the attention to global tax havens that are deemed uncooperative in the fight against international tax dodging and money laundering.

While most of them are located in the Caribbean, three are in Asia: Hong Kong, Maldives – and Brunei.

The list was published last year by the European Commission as part of a crackdown on multinational companies trying to avoid paying tax in the 28-nation bloc. It also proposed including reforms to end sweetheart tax deals following a series of investigations into arrangements between EU countries and firms including Amazon, Apple and Starbucks.

But businessmen and private people can also outsource their assets to those tax havens – usually without anyone noticing. The Panama Papers leak has returned these places to the public eye as an international research association uncovered a global network of fraudsters who dodge taxes with the help of banks and law firms.

EU tax havens list

 

Although Brunei is a small player in the offshore space, it nevertheless is in the focus of international regulators as it has no tax information sharing agreements that comply with international standards and has been singled out for its lax approach towards preventing money laundering. It is also hard if not impossible to get information on ownership of companies domiciled in Brunei.

The absence of income tax, capital gains tax, income tax or other forms of wealth taxes and the Sultanate’s high level of banking secrecy is attractive for those wanting to park some money outside their home jurisdiction. While it can prove difficult for a non-resident to open a bank account, such things can be arranged through a legal representative. Corporations may be required to pay taxes, but it depends on the circumstances.

Offshore legislation was introduced in Brunei in 2000 as the country sought to attract foreign funds away from conventional money markets. New laws were drafted covering international banking, insurance, offshore companies, trusts, limited partnerships and registered agents. The Brunei International Finance Center was inaugurated to compete with other international offshore financial centers with the help of Robert Miller, a lawyer who helped setting up similar offshore centers in Bermuda and Labuan.

Inside Brunei 2013/14
Inside Brunei 2013/14
Buy now and get 42 page Brunei 2012 report FREE
$19.95

For offshore companies, Brunei has a fixed annual fee for any authorized share capital. This makes it ideal for fund raising or other types of businesses that have a large number of shareholders. Share capital cannot be in the local currency, but this doesn’t matter much since shareholders can use the Singapore dollar which is pegged 1:1 to the Brunei dollar.

Banking secrecy for for non-residents is granted by law, and penalties for breaking the Brunei banking secrecy are harsh: Jail for up to two years and a fine up to $100,000. A court order is required to disclose banking information, which is rarely if ever done even in cases foreign jurisdictions consider to be tax evasion. However, Brunei repeatedly stated that its courts will force disclosure in cases of money laundering or other severe financial crimes.

Do you like this post?
  • Fascinated
  • Happy
  • Sad
  • Angry
  • Bored
  • Afraid