FINANCE COMPANIES
1. Which agency is responsible for regulating and supervising the activities of finance companies in Brunei Darussalam?
The Financial Institutions Division, under the Ministry of Finance is responsible to carry out the regulatory and supervisory functions governed under the Finance Companies Act (Chapter 89); an act to license and control finance companies and for matters connected therewith.
The Act commenced on 1st August 1973.
2. How do you define a Finance Company?
A company incorporated or registered under the Companies Act (Cap 39).
Any company licensed under the Act to carry on Financing Business or Islamic Financing Business.
All branches and offices in Brunei Darussalam of such company are considered to be one finance company.
3. What is meant by Financing Business and Islamic Financing Business under the Act?
Financing Business means:-
· acceptance of deposits from the public and undertake to repay the money on call or after an agreed maturity period.
· lending money to the public or to a company on the basis that the money has to be repaid within an agreed period of time or not or by installments, including the business of financing hire-purchase transactions.
Islamic Financing Business means financing business in which the aims and operations of which do not involve any element which is not approved by Hukum Syara’.
4. Do you need a license to transact Financing business and Islamic Financing business?
A valid licensed is needed for a company to transact Financing business or Islamic financing business in Brunei Darussalam, granted by the Minister of Finance in accordance with the provisions of the Finance Companies Act (Chapter 89).
For those found guilty of conducting a business without a licence, imprisonment for 5 years and a fine of BND 20,000.
5. How do you apply for a Finance company license?
Any company incorporated in NBD can apply in writing to the Minister of Finance for a license under the Act.
A fine of BND 2,000 will be imposed on any company which does not comply with the conditions of the license.
6. What is the Minimum Capital requirement?
Minimum paid-up capital of BND 25 million in cash.
7. How much are the Licensing Fees?
For head office of a finance company, an annual fee of BND 30,000.
For a branch office of a finance company, an annual fee of BND 5000.
8. Can a finance company open any branches?
A finance company must submit an application in writing to the Minister of Finance to open any new branch, agency or office, whether inside or outside Brunei Darussalam.
A finance company that fails to comply with the condition can be fined BND2,000 for every day during which the defaults continues.
9. Can a finance company amend its Memorandum of Associations and Articles of Association?
Any finance company intending to amend the Memorandum and Articles of Association needs to seek the approval from the Minister of Finance in writing of the proposed amendment.
Proposed amendment is to be verified by a statutory declaration by the Secretary of the finance company.
Failure to comply with the requirement can be fined BND1,500 for every day during which the default continues.
10. Does a finance company have to maintain a Reserve Fund?
Every finance company shall maintain a Reserve Fund
11. What is the Minimum Cash Balances required for a finance company?
Under the provision of the Finance Company Act, every finance company is required to maintain minimum cash balances, not exceeding 30% of its deposit and other liabilities.
12. Does a finance company required to exhibit its audited accounts?
A finance company shall exhibit throughout the year in every office and branch of the company, a copy of its last audited balance sheet together with the full and correct names of the directors.
A finance company is required to publish its audited balance sheet in at least one of the local newspaper not later than 6 months after the end of each financial year.
13. Does a finance company required to furnish information and statistic of the company to the Authority?
A finance company is required to furnish to the Minister of Finance all information and data of the company from time to time as required.
A fine of BND4,000 for every day during which the default continues, if a company fails or neglect to furnish the required information.
A finance company is also required to submit to the Minister of Finance a copy of the audited balance sheet and profit & loss account and the auditor’s report.
14. Can a finance company advertise its financing business?
A finance company needs to apply for a permit in writing to the Minister of Finance in order to advertise its financing business.
An advertisement means any notification or intimation of its financing business which are:-
(a) published in any newspaper, journal or magazine or in the form of brochure or in any other form;
(b) displayed on any hoarding, boarding, roof wall, paling, fence, frame, signboard, plate, cloth, bar, pillar, post, wire, casting or other erection or contrivance;
(c) conveyed by means of films within the meaning of Censorship of Film and Public Entertainment Act (Chapter 69).
The fee payable for a permit is BND100.
Any advertisement made shall include a permit number.