Investments In Brunei: A Beginner's Guide To Getting Started

Investing in Brunei can be a great way to make your money work for you. The country offers a stable political climate, a wealthy economy, and a favourable environment for foreign investment. In this guide, we will explore the different investment options available in Brunei, including the stock market, real estate, starting a business, and more. We will also discuss the potential risks and rewards of investing, and provide some tips on how to get started. So whether you're a beginner or a seasoned investor, read on to discover how you can make the most of your money in Brunei.

Stock market

Investing in the Stock Market in Brunei

How to Get Started

To start investing in the stock market in Brunei, you have two options:

• Baiduri Capital: This is the only provider of a trading platform in Brunei. They act as brokers and help you buy, sell, and hold stocks. To sign up, you will need a Baiduri Bank account and to register online.
• Brokerage Accounts Outside Brunei: It is possible to open accounts with international brokers, although they may not accept non-residents. There may also be higher charges due to transferring money between countries.

Choosing Stocks

There are two main ways to analyse a stock:

• Fundamental Analysis: This involves digging into the company's financials, executives, and historical performance. This technique is used by those looking to buy and hold for the long term.
• Technical Analysis: This involves looking at historical charts to determine if a stock price is likely to go up or down. This technique is used by traders looking to buy low and sell high.

Things to Keep in Mind

• Know the Risks: Stocks are considered moderate to high-risk due to market volatility. It is possible to lose all your money if you don't know what you're doing.
• Don't Revenge Trade: If you exit a bad position, stay calm and do your research before buying something new.
• Don't Invest Money You Can't Afford to Lose: Only invest money that you don't need for essentials like food and petrol.
• Don't Get Attached: Know when to cut losses and take profits.
• Do Your Research: Always be informed when making decisions. Look at the company's historical performance, business model, and sustainability.
• Don't Trade by Word of Mouth: Do your own research before following someone else's lead.

Costs and Requirements

• Minimum Deposit: Baiduri Capital requires a minimum starting amount of BND1,000.
• Trading Hours: Morning session: 9:00 am - 12:00 pm, Afternoon session: 1:00 pm - 4:00 pm.
• Markets: You can trade on seven exchanges: Bursa Malaysia, Singapore Exchange, Hong Kong Stock Exchange, NASDAQ, New York Stock Exchange, NYSE American, and Shanghai Stock Exchange-A VIA Shanghai-Hong Kong Stock Connect.

Real estate

There are two main strategies for real estate investment:

• Buy a property, renovate it, and rent it out.
• Buy cheap, renovate, and sell for profit.

The second strategy may not be as effective in Brunei due to the long time it takes to transfer property between owners.

It is worth noting that foreign investors cannot own property in Brunei. In 2017, the government began allowing non-citizens to lease property for a maximum term of 99 years, but this has not had a significant impact on attracting foreign investment.

If you are considering investing in real estate in Brunei, it is important to do your research and be aware of the potential challenges and risks involved.

Starting a business

First, you will need to determine the type of business you want to start. Consider your skills, interests, and the needs of the local market. You can also look at the unique assets of Brunei and how your business can take advantage of them. For example, Brunei has a stable political climate, a wealthy economy, and a favourable environment for foreign investment. It also has a well-educated, largely English-speaking population and excellent infrastructure. These factors can be beneficial for certain types of businesses.

Next, you will need to register your company and navigate the necessary permits and licenses. This process can be complex, so it may be helpful to seek support from organisations that offer guidance to international companies entering the Bruneian market, such as the Investor's Concierge. They can help you familiarise yourself with the business ecosystem in Brunei and provide support with company registration, recruitment, and finding working spaces and premises.

Additionally, you will need to consider your funding options and develop a solid financial plan. You can explore different investment vehicles, such as stocks, bonds, or investment-linked policies, to fund your business venture. It is important to carefully assess the risks and potential returns of each option and to diversify your investments to minimise risk.

Finally, remember that starting a business is a complex process that requires careful planning and due diligence. It is essential to conduct thorough research, seek professional advice when needed, and be prepared to adapt your strategies as you gain a deeper understanding of the market and your target audience.

Unit trusts

Some unit trusts offer dividends, which can be paid directly to your account or reinvested into your investment, compounding your returns. When choosing a unit trust, carefully select the company you want to invest with. Consult a financial advisor to determine the management fees, which can range from 3% to 4% of your total investment.

Before investing in unit trusts, be aware that investing carries risk, and you may lose some or all of your money. Conduct your own research and consider seeking professional financial advice.

Investment-linked policies

ILPs are available in Brunei through insurance companies. They are one of several investment options in the country, including unit trusts, the stock market, gold investments, and starting your own business.

Frequently asked questions