BUSINESS OPPORTUNITIES 10 DECEMBER 2009

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1 BUSINESS OPPORTUNITIES IN BRUNEI DARUSSALAM 10 DECEMBER 2009

2 TODAY S AGENDA I Brunei in Brief II Business Opportunities III Value Propositions

3 Land Size : 5765 sq km Population : 409,200 (2009) Capital : Bandar Seri Begawan Religion: Muslim Majority ABOUT BRUNEI Currency : Brunei Dollar (par to Singapore Dollar) Language : Malay, English, Chinese Legal System of Commerce: British Common Law Adult Literacy Rate (HDI 2009) 94.9 % Macroeconomic stability (GCR, World Economic Forum, ) #1 out of 134 No History of Natural Disasters

4 POLITICAL STABILITY UNDER MONARCHY His Majesty Sultan Haji Hassanal Bolkiah is the 29th ruler in an unbroken chain since the 15th Century

5 66% of population is Muslim STRONG ISLAMIC HERITAGE

6 58% of Brunei s total land is reserved for conservation EXTRAORDINARY BIODIVERSITY

7 ABUNDANT CAPACITY SEA ME WE 3 80% of Brunei s bandwidth is under utilised Asia America Gateway

8 OVERVIEW OF BRUNEI S ECONOMY GDP (2008) : U$13.2bil GDP per head (2008) : U$33,200 GDP composition (2006) Oil& Gas : 68.5% Government services : 11.0% Private : 20.4% Average GDP growth ( ) : 2.3% Average Inflation ( ) : 0.2% GDP growth forecast (2009) : 1.2% -3.2% Crude oil exports (2007) : 63 million barrels LNG exports (2007) : 6.7 million MT

9 STRONG OIL & GAS INDUSTRY Economy is dominated by oil and gas since its discovery in 1929 Garments 2% LNG 45% Crude Oil 53% Exports (2008) 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s 2000s 1929 Oil discovery at Seriaby Shell 1931 Brunei s first exports 1963 First offshore oilfield discovered 1971 Mitsubishi Corp. commence operations 1972 BLNG commence LNG Production 1982 Seria Crude Oil Refinery started operations 1986 TOTAL commence operations 2001 Formation of Brunei National Petroleum Company 2002 Award of Block J & K 2006 Award of Block L & M 2010 Methanol plant commence production

10 EXPLORATION AND PRODUCTION (E&P) BLOCK J (2002) Total BHP Billiton Amerada Hess BLOCK K (2002) Shell ConocoPhillips Mitsubishi Corporation BLOCK L (2006) Nations Petroleum Loon Brunei (Loon) QAF Brunei (QAF) BLOCK M (2006) Tap Energy (Borneo) Triton Borneo China Sino Oil Jana Corporation

11 ABOUT THE BEDB REPORTING LINE Established by His Majesty, The Sultan Mission To contribute to Brunei Darussalam s Success As a Land of Opportunity for its People and all investors Strategy To work with foreign and domestic investors to develop new economic opportunities where Brunei has competitive advantage HIS MAJESTY SULTAN HAJI HASSANAL BOLKIAH SULTAN AND YANG DI-PERTUAN OF BRUNEI DARUSSALAM HIS ROYAL HIGHNESS PRINCE MOHAMED BOLKIAH CHAIRMAN & BOARD CHIEF EXECUTIVE OFFICER

12 TODAY S AGENDA I Brunei in Brief II Business Opportunities III Value Propositions

13 BUSINESS OPPORTUNITIES Extending The Oil & Gas Value Chain Building On Brunei s Biodiversity Leveraging On The Islamic Brand Petrochemicals Alternative Energy Halal Processing Hub Financial Services Integrated Petrochemical Refinery Aquaculture Port & Logistics Key Enablers InfoComms Technology Crude Oil / Chemical Storage Eco-Tourism Aviation Education

14 WORLD CLASS PETROCHEMICAL HUB Land Area: 271 ha

15 WORLD CLASS PETROCHEMICAL HUB Brunei Methanol Company Mitsubishi Gas Chemicals (Japan) Petroleum Brunei (Brunei) ITOCHU Corporation (Japan) Start Operation: Early 2010 Methanol Export Facility Single Point Mooring & Subsea Pipeline System (13.8 km) Start Operation: Early 2010 NEW OPPORTUNITIES Methanol Derivatives Gas-Based Petrochemicals Supporting Industries: Industrial Gases, Industrial Waste Management Independent Power Plant Common Utilities: Industrial Water Treatment, Common Jetty

16 DYNAMIC LOGISTICS AND MANUFACTURING HUB PMB Island Existing Port

17 DYNAMIC LOGISTICS AND MANUFACTURING HUB Current Size:950 ha After Reclamation: Approx ha Existing Port Aquaculture 2008 SelectedPort Operator, ICTSI (Philippines) & Master Planner, Surbana-GMAPS (Singapore) 2009 Submit Master Plan for Approval 2010 Tender fordredging, Reclamation, Bridge, Infrastructure New Urban Area Bridge Biz Park Industry Logistics Industrial Jetties Port Industry 2012 Port commence operations NEW OPPORTUNITIES Manufacturing / Export Processing Industries Integrated Petrochemical Refinery Oil & Chemical Storage Residential Development Commercial Development Infrastructure Works: Bridge, Utilities, Jetties

18 1. Untapped Islamic Market HALAL MANUFACTURING OBTAINING BRUNEI HALAL CERTIFICATION 2. Brunei s Credibility is Recognised In The Islamic World 3. Commitment From Brunei Government Halal Label from Brunei LEAD AGENCIES IN DEVELOPMENT OF HALAL INDUSTRY Ministry of Religious Affairs Ministry of Industry & Primary Resources Ministry of Health Brunei Economic Development Board

19 HALAL MANUFACTURING OBTAINING BRUNEI HALAL CERTIFICATION Development of Halal Standards in Brunei Phase 1 Food Standards Phase 2 Pharmaceutical Guidelines Phase 3 Cosmetic Guidelines 1 st of its kind in the world 1 st of its kind in the world

20 VALUE PROPOSITIONS OBTAINING BRUNEI HALAL CERTIFICATION AND BRUNEI HALAL BRAND BRUNEI HALAL ACCREDITATION LOGO Only awarded to manufacturing facilities that have achieved the required Halal standards as stipulated by the Brunei Religious Control authorities Prerequisite to Brunei Halal products Premium product BRUNEI HALAL COMMERCIAL BRAND Used on all packaging & promotional material specifically related to Brunei Halalfor instant identification For food & beverage products Coming soon: health, beauty & pharmaceutical ranges

21 Knowledge Based Enterprises PHASE 1: icentre Managed by KR Consulting (Singapore) Incubatees: 11 physical& 3 virtual Technology Partner: Skali(Malaysia) Strategic Partners:Telbru(Brunei) 2007 Refurbish existing building by Arkitek SAA(Brunei) 2008 Completion PHASE 2: KNOWLEDGE HUB Modelling and Simulation Centre, Energy Research Lab 2008 Construction by PuteraPermai(Brunei) 2010 Completion ANGGEREK DESA TECH PARK POTENTIAL DEVELOPMENTS PHASE 3: KNOWLEDGE PARK Design-Build

22 icentre INCUBATEES Made in Brunei Technology Products Mobile applications SMS gateway, Islamic portal Incubatees : Infindo Technologies, Expansys Technologies, Modasys Technology, Rafiqun WDSI Vehicle Tracking- GPS vehicle tracking device services & fleet management Incubatees : Mimite-Technology, AlifTechnologies Mobile Wireless products Incubatees : Rafiqun WDSI Enterprise products e.g. Accounting Incubatees : BAG Networks RFID Incubatees : John Harrith Computers

23 New Areas Of Opportunity Hub for Data Centre, Backup-Disaster Recovery Centre Submarine Cable Landing Station Rimba Digital Junction SITE FOR POTENTIAL DEVELOPMENT Connectivity with 2 International Cables 20 hectare site in the capital city 2 km from Submarine Cable Landing Station 80% of Brunei s bandwidth is underutilised Ready for immediate connection to utilities Flexible Investment Model PPP, BOO, Build & Lease, Land Lease

24 New Areas Of Opportunity Property Development POTENTIAL DEVELOPMENT ONG SUM PING APARTMENTS Total:17 blocks of apartments (495 units) Vacant: 9 blocks (242 apartments) Investment Model Investor takeover and refurbish, for leasing or renting

25 New Areas Of Opportunity Property Development STRATA ACT CHAPTER 189 STATUS Property ownership devised for buildings with two or more units Applies to new and existing completed buildings Strata title valid for maximum of 99 years ADVANTAGES TO INVESTORS Secure form of property ownership Both locals and foreigners can purchase property Strata titled properties can be used as collaterals

26 Efficient Infrastructure Implementation 2000 HOUSES 2009 On-going Construction by Bina Puri(Malaysia) 2011 Completion NATIONAL HOUSING SCHEME 2009 Awaiting Approval 2013 Completion 4000 HOUSES LUMUT-TELISAI TELISAI HIGHWAY 18.6 KM Dual Carriageway 2 Bridges 30m and 500m HIGHWAY 2009 Awarded to SuratiConstruction (Brunei) with collaboration with Xing An Ji Engineering (China) 2013 Completion

27 Modern Waste Management System REHABITATION OF EXISTING DUMP SITE 2008 Rehabilitation by Jurusy Perunding(Brunei) 2009 Q4 Completion MODERN ENGINEERED LANDFILL STATUS Tender stage MODERM ENGINEERED LANDFILL Awaiting Approval 2010 Q1 Award 2011 Completion POTENTIAL DEVELOPMENTS FeasibilityStudy and PPP for Energy Efficient Waste Management System Eg. Incinerator

28 TODAY S AGENDA I Brunei in Brief II Business Opportunities III Value Propositions

29 VALUE PROPOSITIONS Competitive Utility Prices Electricity Charges : US$ per KVA* Voltage : volts AC, 50 cycles * Subject to negotiations Water Charges : US$ 0.44 per m3 Quality : WHO drinking water standard Industrial Diesel : US$ 0.21 per litre

30 VALUE PROPOSITIONS Tax Exemptions Tax Exemptions in Brunei No Personal Income Tax No Sales Tax No Payroll Tax No Capital Gains Tax No Export Tax No Manufacturing Tax Corporate Income Tax in Brunei : 25.5%* *Will be reduced to 23.5% in 2010 Companies can apply for Pioneer Status to be exempted from Corporate Income Tax

31 Pioneer Status VALUE PROPOSITIONS Investment Incentives Exempt from Corporate Income Tax Exempt from import duties on machinery Exempt import duties on raw materials Tax Exempt up to 11 years Expansion of Established Enterprises Exempt from Corporate Income Tax Minimum Capital Expenditure of USD$650,000 Tax Exempt up to 20 years Foreign Loans For Productive Equipment Exemption from with-holding tax for interest paid Minimum Amount USD$130,000

32 VALUE PROPOSITIONS International Tax And Trade Agreements Others P4: Chile, NZ, Singapore (USkeen to join) ^ Europe Belgo-Luxembourg Economic Union ^ Finland ^ France ^ Germany# ^ Russian Federation ^ UK* Ukraine # Middle East Bahrain* # Iran ^ Kuwait*# Oman * # Qatar ^ UAE ^ Asia ASEAN ASEAN-China ^ ASEAN-Korea ^ China*# India # Indonesia* Laos* Malaysia* Pakistan* Philippines ^ Singapore* Thailand ^ Vietnam* * Double Taxation Agreements # Bilateral Investment Free Trade Agreements ^^^ Ongoing negotiations Australasia ASEAN-Australia-NZ

33 Chief Executive Officer Account Manager Assistant Account Manager Marketing & Investment Promotion Division Tel: Fax:

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