When you want to expand your business internationally, you may consider setting up a subsidiary in your preferred country. While this process comes with certain benefits, it takes time and money that may not be accessible to all businesses. Learn more about what it takes to establish a subsidiary and what your options are.
How to Set Up a Brunei Subsidiary
Setting up a subsidiary begins with deciding what type of company you’d like to establish. Brunei company law details a series of business types that international employers can set up. These include:
- Private. The Companies Act governs this type of company, and there are restrictions on the right to transfer shares. The public does not have access to stock, and the company is limited to 50 total shareholders.
- Public. For a public company, you need at least seven shareholders, and stock is available to the general public.
- Partnership. This arrangement involves teaming up with one or more local companies to expand business prospects. A partnership is not subject to tax, but international individuals can only register them under special circumstances.
- Free zone. You can register a limited liability company in the free-trade zone for repackaging or minor manufacturing processes and stay exempt from corporate taxes for 15 years.
Once you’ve determined what type of subsidiary you’d like to establish, you must register your business name with the Registry of Companies and Business Names. You’ll also need to submit a lengthy legal form known as the Memorandum and Articles of Association. This document act as a contract for the company type you choose and lays out the regulations for your subsidiary. When you register your entity, you must have a least two existing shareholders before you can fully incorporate.
After you’ve declared your company, you’ll need to establish a strong board to manage the subsidiary. This step involves determining who has signing power among your board members.
Brunei’s subsidiary laws vary according to the type of entity and are clearly outlined in the Memorandum and Articles of Association. Both private and public companies need board members, and at least half must be Bruneian citizens or permanent residents. Both types only require $1 in share capital and are subject to 18.5% corporate taxation.
Public company shareholders must all be citizens. The shareholders are required to submit yearly financial statements to an auditor, who will file them with the Ministry of Finance and Economy. Private and public businesses also need two directors to have a complete board.
The Benefits of Creating a Subsidiary
Setting up a subsidiary in Brunei comes with a range of advantages. Since it will technically operate as a separate entity from your parent company, the subsidiary can practice local business culture. Plus, if your subsidiary runs into any legal trouble, liability is entirely on the Brunei location rather than your headquarters.
A subsidiary can also improve your company’s overall scope and may help you gather attention from investors that you couldn’t reach before. While these qualities are appealing, working with a global PEO can give you all the same advantages while expediting the process and lessening the strain of your expansion.
When you work with Globalization Partners, we hire your employees through our subsidiary. You can avoid processing times and the board member selection process while shifting liability from your shoulders to ours. Onboard new employees in days and focus on building your business right away with our subsidiary outsourcing services.
What You Need to Incorporate
The two most important resources you need for setting up your subsidiary are time and money. Processing the series of legal forms can take two to three months, and it requires a range of fees for registration, filing, and inspection.
Contact Us for Subsidiary Outsourcing in Brunei
Globalization Partners changes the way you handle an international expansion. Contact us today to learn more about our services.