Brunei has opted for a regulated trust and corporate regime ab initio. The Registered Agents and Trustees Licensing Order (RATLO) restricts the provision of “international business services” to companies licensed under that Order.
“International business services” includes international companies management business, international partnerships management business and international trust business.
“International companies management business” includes –
acting as registered agent for the incorporation or registration of IBCs and Foreign International Companies (“FICs”) under the International Business Companies Order, 2000 (“IBCO”), the conversion of overseas companies into IBCs, and the merger, consolidation, continuation, renewal, extension of the duration of, or migration of IBCs.
providing registered offices, share transfer offices or administration offices for the receipt of post or other articles, IBCs and FICs.
providing or appointing persons to perform the functions of directors, (mandatory) resident, secretary, nominees, preparing, keeping or filing books, accounts, registers, records, and other matters relating to corporate administration, including the establishment of IBCs as Dedicated Cell Companies or Limited Life Companies.
All documents to be filed with the Registrar of International Business Companies (and Limited Partnerships) are filed by licensed registered agent and trust companies.
Similarly, trust companies must be involved in all International Limited Partnerships (ILP) and “qualifying” trusts – i.e. International Trusts formed pursuant to the ITO and trusts which are established under the laws of other jurisdictions but administered in Brunei.
Trust companies and banks are also involved in the Mutual Funds (or more correctly Collective Investment Schemes) regime, which governs both domestic and international schemes. Trust licenses are made by application to the Authority, made by institutions, professional groups and independent trust groups.
A comprehensive licensing process and approval of senior personnel is involved. Ongoing supervision includes the filing of audited accounts of the trust companies (but not their clients) with the Authority. Notifications and approvals of appointments and changes of Key Personnel apply. Minimum capitalization of B$150,000 either paid-up in full or 50% paid-up with the other 50% guaranteed is required. Insurance requirements (but no bond) apply. The Authority’s concern is continuing liquidity and sufficiency of working capital, and a 3-year business plan is required with all applications for licenses under RATLO.
The application fee for a Trust and Registered Agent’s license is B$3,000 and an Annual License Fee of B$2,000 is imposed.
Licensees are, with the approval of the Authority, permitted to establish wholly-owned subsidiaries (whose operations are fully guaranteed by the licensee). Such a subsidiary may be an IBC (as may the licensee itself) and may for the purpose of the licensee’s business act as a trustee, nominee, secretary or director in respect of international business services. The aim is to permit accountable flexibility and segregation in, for example, Collective Investment Schemes, Private Trust Companies, Special Purpose Vehicles and offshore / Headquarters facilities.
Trust companies (including overseas trust companies establishing a branch in Brunei) as well as the entities they administer are totally exempted from all tax in respect of Brunei operations. Again, their officers, customers and products are not taxed.
The relatively low cost of living and of a well-educated support staff pool adds to the appeal. Low fees, however, should not be taken as an indication that the supervisory regime will be any other than thorough and strictly enforced. It is hoped that participants will follow Government’s lead in keeping the cost of their services reasonable. It is a false argument that high-class jurisdictions must charge high fees to maintain their reputation and those high fees will discourage criminals. Good corporate vehicles at reasonable cost are the aim.
It should be noted that for the purposes of enforcing the anti money laundering legislation each licensed trust company (along with every other financial institution) is required to appoint a Money Laundering Reporting Officer.