Hire in Brunei Darussalam through our Employer of Record (EOR)

An Employer of Record (EOR) is a third-party organization that takes on the legal and administrative responsibilities of employing workers on behalf of another company. This arrangement allows businesses to hire employees in countries where they don't have a legal entity, effectively expanding their global reach without the need to establish a local subsidiary or branch office.

In the context of Brunei Darussalam, an EOR can be particularly useful for international companies looking to tap into the country's skilled workforce or expand their operations in Southeast Asia. By partnering with an EOR, businesses can navigate Brunei's unique legal and cultural landscape more easily, ensuring compliance with local labor laws and regulations while focusing on their core business activities.

How Does EOR Work?

The EOR model operates through a series of steps:

1. Partnership: A company partners with an EOR provider that has a legal entity in Brunei.

2. Hiring: The client company selects the candidates they wish to hire in Brunei.

3. Employment: The EOR becomes the legal employer of the selected candidates, handling all administrative tasks such as payroll, benefits administration, and tax compliance.

4. Management: While the EOR manages the legal and administrative aspects, the client company maintains control over the day-to-day work and responsibilities of the employees.

5. Compliance: The EOR ensures that all employment practices adhere to Brunei's labor laws, including proper documentation, work permits for foreign employees, and compliance with local regulations.

Benefits of Using an EOR

Employing an EOR in Brunei Darussalam offers several advantages:

1. Rapid Market Entry: Companies can quickly establish a presence in Brunei without the need to set up a legal entity, saving time and resources.

2. Compliance Assurance: EORs are well-versed in Brunei's labor laws, ensuring that all employment practices are compliant with local regulations, including the country's emphasis on Islamic principles in business practices.

3. Risk Mitigation: By outsourcing employment responsibilities, companies reduce their legal and financial risks associated with non-compliance.

4. Cultural Navigation: EORs can help bridge cultural gaps, assisting foreign companies in understanding and respecting Brunei's unique cultural norms and business etiquette.

5. Cost-Effectiveness: Using an EOR can be more cost-effective than establishing and maintaining a legal entity, especially for companies testing the market or hiring a small number of employees.

6. Focus on Core Business: By delegating HR and administrative tasks to the EOR, companies can concentrate on their primary business objectives and growth strategies in Brunei.

7. Flexibility: EORs provide the flexibility to scale operations up or down without the complexities of managing a local entity.

8. Local Expertise: EORs offer valuable insights into Brunei's labor market, helping companies make informed decisions about compensation, benefits, and talent acquisition.

By leveraging an EOR's services, companies can navigate Brunei's unique business environment more effectively, tapping into the country's potential while ensuring compliance with its distinct legal and cultural framework.

Brunei Darussalam's employment landscape is a unique blend of traditional values and modern aspirations. The country's workforce is gradually aging and predominantly male, though female participation is on the rise. With a high reliance on foreign workers, particularly in construction, service, and industrial sectors, Brunei faces both opportunities and challenges in shaping its labor market.

The nation boasts a well-educated workforce, reflected in its high literacy rate. However, skill gaps persist in technical and vocational fields, leading to continued dependence on foreign expertise. The public sector remains the largest employer, while the oil and gas industry continues to be the economic backbone. As Brunei strives to diversify its economy, new sectors such as technology, halal industries, and downstream energy production are gaining prominence.

Overview of Labor Laws

Brunei's labor laws aim to protect both employers and employees while promoting a fair and productive work environment. Key aspects include:

• Employment contracts: Written agreements are mandatory, outlining terms and conditions of employment.
• Working hours: Standard workweek is 44 hours, with provisions for overtime pay.
• Leave entitlements: Annual leave, sick leave, and public holidays are guaranteed by law.
• Social security: Employees are entitled to contributions to the Employees Trust Fund (TAP) and Supplemental Contributory Pension (SCP).
• Termination: Proper notice periods and justifiable reasons are required for employment termination.

Cultural Considerations

Understanding Brunei's cultural nuances is crucial for successful employment relationships:

• Family-centric: Family obligations often take precedence over work commitments.
• Religious observance: Daily prayers and religious holidays, especially Ramadan, significantly influence work schedules.
• Communication style: Indirect communication is preferred to maintain harmony and avoid confrontation.
• Hierarchy: Respect for authority and organizational structures is deeply ingrained.
• Relationship-building: Personal connections and trust are highly valued in business interactions.

Challenges of Direct Hiring

Employers considering direct hiring in Brunei may face several challenges:

1. Skill shortages: Finding local talent for specialized roles can be difficult, often necessitating recruitment of foreign workers.
2. Complex regulations: Navigating Brunei's labor laws and work permit processes for foreign employees can be time-consuming and complex.
3. Cultural adaptation: Aligning foreign management styles with local work culture may require significant adjustment.
4. Localization quotas: Government initiatives to increase local workforce participation may limit options for hiring expatriates.
5. Language barriers: While English is widely used, proficiency levels may vary, potentially affecting workplace communication.

Understanding these aspects of Brunei's employment landscape is essential for organizations looking to establish or expand their presence in the country. By recognizing the unique blend of cultural, legal, and practical considerations, employers can better navigate the challenges and opportunities presented by Brunei's labor market.

Brunei Darussalam's payroll and tax system is unique, focusing primarily on social security and retirement contributions rather than direct income taxation. This approach ensures that both employers and employees contribute to long-term financial security while maintaining a relatively low tax burden. The country's tax structure is designed to support its citizens' welfare and promote economic growth.

In Brunei Darussalam, the primary components of the payroll and tax system include corporate income tax for businesses, employee trust funds, and various other potential obligations for employers. For employees, the focus is on contributions to retirement and pension schemes. Let's delve deeper into the specific responsibilities for both employers and employees in this system.

Employer Contributions

Employers in Brunei Darussalam have several financial obligations to consider when managing their payroll and taxes:

1. Corporate Income Tax (CIT): Companies operating in Brunei are subject to a corporate income tax rate of 18.5%. The tax is applied progressively, with the first BND 100,000 of assessable income taxed at 18.5%, and the next BND 150,000 taxed at 50% of the 18.5% rate. This applies to both local and foreign companies deriving income from Brunei.

2. Employee Trust Fund (TAP): Employers must contribute a minimum of 5% of an employee's basic salary to the Tabung Amanah Pekerja (TAP), which is a mandatory retirement savings scheme.

3. Supplemental Contributory Pension (SCP): In addition to the TAP, employers are required to contribute 3.5% of an employee's basic salary to the SCP, an additional pension scheme designed to enhance retirement savings.

4. Withholding Taxes: Employers may need to withhold taxes from payments made to non-residents providing services in Brunei.

5. Property Taxes: Business owners who own properties may be subject to property taxes.

6. Customs Duties: Companies involved in importing or exporting goods may be required to pay customs duties.

It's important to note that there are maximum monthly contribution amounts for both TAP and SCP schemes. Additionally, these schemes generally do not apply to foreign nationals who are not permanent residents of Brunei.

Employee Contributions

The tax system for employees in Brunei Darussalam is relatively straightforward, with a focus on retirement and pension contributions:

1. Tabung Amanah Pekerja (TAP): Employees are required to contribute a minimum of 5% of their basic salary to this government-mandated provident fund, which serves as a form of retirement savings.

2. Supplemental Contributory Pension (SCP): Employees must contribute 3.5% of their basic salary to this supplemental pension scheme, which is designed to enhance their retirement savings.

One of the most notable aspects of Brunei's tax system for employees is the absence of personal income tax. This means that employees do not have to pay direct taxes on their income, which can be a significant advantage for workers in the country.

It's worth noting that expatriate workers might be subject to different regulations regarding TAP and SCP contributions. They should consult with their employers or local authorities to understand their specific obligations.

In conclusion, Brunei Darussalam's payroll and tax system emphasizes long-term financial security through mandatory contributions to retirement and pension schemes. While employers face various tax responsibilities, employees benefit from a system that prioritizes savings for the future without the burden of personal income tax. As with any tax system, it's crucial for both employers and employees to stay informed about any changes in regulations and to seek professional advice when needed to ensure compliance with all relevant laws and obligations.

Brunei Darussalam offers a comprehensive range of employee benefits, ensuring the well-being and fair compensation of workers. As an Employer of Record (EOR), Rivermate expertly manages these benefits, ensuring compliance with local labor laws while providing valuable support to both employers and employees. From mandatory benefits outlined by law to optional perks that enhance job satisfaction, the benefits landscape in Brunei Darussalam is designed to create a positive work environment and attract top talent.

Mandatory Benefits

• Annual Leave: Employees accrue 7-14 days based on years of service
• Public Holidays: 11 paid holidays annually
• Sick Leave: 14 days paid sick leave, plus 60 days paid hospitalization leave
• Maternity Leave: 15 weeks for Bruneian citizens (13 weeks fully paid), 9 weeks for international employees (8 weeks paid)
• Probationary Period: Allowed but length not specified by law
• Notice Period: Minimum period required as per employment contract
• Overtime Pay: Regulated compensation for work beyond standard hours
• 13th Month Pay: Common practice, though not universally mandated
• Severance Pay: Required under specific circumstances
• Social Security: Contributions to Tabung Amanah Pekerja (TAP) and Supplementary Contributory Pension (SCP)

Optional Benefits

• Medical Insurance: Coverage for employees and sometimes dependents
• Life Insurance: Group plans for added financial security
• Housing Allowances: Assistance with accommodation costs
• Transportation Allowances: Help with commuting expenses
• Relocation Allowances: Support for moving and settling in
• Flexible Work Arrangements: Options for remote work or alternative schedules
• Paid Time Off (PTO) Banks: Additional leave beyond mandatory minimums
• Educational Assistance: Support for continuing education and professional development
• Other Perks: May include club memberships, gym access, employee discounts, wellness programs, or childcare assistance

By offering a mix of mandatory and optional benefits, employers in Brunei Darussalam can create attractive compensation packages that support employee satisfaction and retention. As an EOR, Rivermate ensures seamless management of these benefits, allowing companies to focus on their core business while providing comprehensive support to their workforce.

Termination and offboarding processes in Brunei Darussalam are governed by the Employment Order 2009 and the Labor Act (Chapter 93). These laws provide a framework for employers and employees to follow when ending an employment relationship. Let's explore the key aspects of this process in a clear and concise manner.

Notice Requirements

When either party decides to terminate an employment contract, they must provide written notice. The duration of the notice period depends on the employee's length of service:

• 1 day's notice for less than 26 weeks of service
• 1 week's notice for 26 weeks to 2 years of service
• 2 weeks' notice for 2 to 5 years of service
• 4 weeks' notice for 5 years or more of service

It's important to note that the notice period must be the same for both employer and employee, regardless of what's stated in the employment contract.

Grounds for Lawful Dismissal

Employers in Brunei can terminate employees on several grounds:

1. Gross misconduct (e.g., theft, insubordination, fighting)
2. Poor performance
3. Redundancy
4. Contract expiration

In cases of gross misconduct, employers may dismiss employees without notice or compensation. For poor performance, employers typically provide notice and may offer opportunities for improvement before termination.

Severance Pay

Severance pay is not always mandatory in Brunei. However, employees may be entitled to severance in certain circumstances:

1. Redundancy: If a position is made redundant, severance may be required. The amount is usually negotiated as part of a separation agreement.
2. Contract breach: If the employer breaches the contract terms leading to termination, the employee may be eligible for compensation.

Offboarding Process

While not explicitly outlined in Bruneian law, a proper offboarding process typically includes:

1. Communicating the termination decision
2. Collecting company property
3. Revoking access to company systems
4. Conducting an exit interview
5. Providing necessary documentation (e.g., certificate of service)
6. Processing final payments, including any outstanding wages or benefits

By following these guidelines, employers in Brunei can ensure a smooth and legally compliant termination and offboarding process. It's always advisable to consult with local legal experts to ensure full compliance with current regulations.

Brunei Darussalam, a small but prosperous nation on the island of Borneo, has specific requirements for foreign workers seeking employment within its borders. Understanding these visa and work permit regulations is crucial for both employers and employees to ensure compliance with local laws.

Types of Work Visas

Foreign workers in Brunei typically require one of the following visas:

1. Employment Visa: This is the most common type for skilled workers and professionals.
2. Professional Visit Visa: For short-term assignments or consultancy work.
3. Business Visa: For those attending meetings or conducting business negotiations.

Work Permit Process

To obtain a work permit in Brunei, the following steps are generally required:

1. Job offer from a Bruneian employer
2. Employer applies for a labor quota from the Labor Department
3. Submission of work visa application to the Immigration Department
4. Health screening upon arrival in Brunei
5. Collection of work pass from the Immigration Department

Key Requirements

• Valid passport with at least 6 months validity
• Proof of qualifications and work experience
• Clean criminal record
• Medical certificate
• Sponsorship from a local employer

Duration and Renewal

Work permits in Brunei are typically issued for 2-3 years and can be renewed. The renewal process should be initiated at least 3 months before the expiry date.

Dependents

Employees with certain salary thresholds may be eligible to bring dependents to Brunei. Separate dependent passes must be applied for family members.

Understanding these visa and work permit requirements is essential for a smooth transition to working in Brunei Darussalam. It's advisable to consult with local authorities or a reputable Employer of Record service for the most up-to-date information and assistance with the application process.