April 15, 2025
Directorship Services in Brunei: Key Insights and Essential Information
Brunei, a small yet economically stable nation located on the island of Borneo in Southeast Asia, has become an increasingly attractive destination for foreign businesses and investors. Its strategic location, strong legal framework, and commitment to providing a stable and business-friendly environment make it a popular choice for setting up companies in the region.
A crucial aspect of setting up and maintaining a business in Brunei is understanding the requirements surrounding directorship services. Among these, nominee director and nominee shareholder services are essential components for many foreign entrepreneurs looking to establish a presence in Brunei. This blog will explore the intricacies of directorship services, focusing on nominee director and nominee shareholder arrangements.
Directorship Services in Brunei: Overview
In Brunei, like in many other jurisdictions, a director is a key individual responsible for the management and oversight of a company’s operations. Brunei’s Companies Act (Cap. 39) requires that a private limited company (known as Sendirian Berhad or Sdn Bhd) must have at least one local (resident) director. This local director requirement is often a challenge for foreign investors who wish to establish a business in the country.
To navigate this challenge, foreign investors typically rely on directorship services provided by corporate service providers. These services ensure that a local resident director is appointed to fulfill legal requirements, while offering flexibility in managing the business without requiring the foreign entrepreneur to reside in Brunei. In certain cases, companies may also choose to appoint a nominee director or nominee shareholder to maintain privacy and comply with regulatory obligations.
The Role and Responsibilities of a Director in Brunei
The role of a director in Brunei is not only central to the governance of the company but also involves compliance with various legal and regulatory frameworks. Directors in Brunei have several key duties, including:
- Fiduciary Duty: Directors must act in good faith in the best interests of the company and avoid conflicts of interest.
- Duty of Care: Directors must exercise reasonable care, skill, and diligence in managing the company’s affairs.
- Compliance with Laws: Directors must ensure the company adheres to Brunei’s laws and regulations, including filing annual returns and tax reports.
- Financial Oversight: Directors are responsible for ensuring that the company maintains proper financial records and reports.
- Risk Management: Directors should ensure the company has adequate systems in place to manage and mitigate risks, including legal, financial, and operational risks.
Failing to fulfill these responsibilities can lead to significant legal consequences, including fines, penalties, or personal liability for the director.
Nominee Director Services in Brunei
What is a Nominee Director?
A nominee director is an individual appointed to serve as the director of a company on behalf of the beneficial owner or shareholders, usually to fulfill the legal requirement for a local resident director. The nominee director’s role is typically limited to maintaining the company’s legal status and meeting the regulatory requirement for a local director.
It is important to note that a nominee director does not have control over the company’s operations or decision-making. The beneficial owner retains full control of the company’s management, and the nominee director’s actions are guided by the instructions of the beneficial owner.
How Does a Nominee Director Work?
In Brunei, when a foreign investor establishes a company, they may not be familiar with the local laws or have a residence in Brunei. To meet the requirement of having a local director, the investor can hire a nominee director through a corporate service provider. This arrangement ensures that the company complies with local regulations, while the investor retains full control of the business operations.
Typically, a Nominee Director Agreement is signed between the beneficial owner and the nominee director, which outlines the following:
- The nominee director’s role and limited authority
- The scope of the nominee’s involvement in company management
- An indemnity clause protecting the nominee from liability due to company decisions made by the beneficial owner
- The relationship between the nominee director and the actual shareholders or beneficial owner
Benefits of Nominee Director Services
- Compliance with Local Laws: Nominee director services ensure that the company fulfills the legal requirement of having a local resident director.
- Confidentiality and Privacy: The use of a nominee director helps protect the identity of the actual owners of the company, providing privacy.
- Reduced Burden on Foreign Investors: A nominee director can manage the local residency requirement, allowing foreign investors to focus on their business operations without needing to establish personal residence in Brunei.
Nominee Shareholder Services in Brunei
What is a Nominee Shareholder?
A nominee shareholder is an individual or entity that holds shares in a company on behalf of the actual beneficial owner. The nominee shareholder’s name appears on the public records as the shareholder of the company, but the beneficial owner retains the full economic rights and control over the shares. The actual ownership and control are governed by a Declaration of Trust, which ensures that the nominee is merely holding the shares in trust for the beneficial owner.
Why Use Nominee Shareholder Services?
Nominee shareholder services are often used by foreign investors to maintain privacy and avoid the disclosure of the true ownership of the company in public records. This can be beneficial in jurisdictions where there may be concerns about privacy, tax implications, or political sensitivities. Additionally, nominee shareholder services can be used for the following purposes:
- Confidentiality: The beneficial owner’s identity is kept private, which can be important for strategic, personal, or security reasons.
- Flexibility in Structuring: Nominee shareholder services can be useful for creating complex ownership structures, especially in cross-border investments or joint ventures.
- Estate and Succession Planning: Nominee shareholder arrangements can assist in the smooth transfer of shares upon the death or incapacity of the beneficial owner.
Considerations for Nominee Shareholders
Although nominee shareholder services are legal in Brunei, it is important to ensure that the arrangement complies with the Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) regulations. The corporate service provider offering nominee services must conduct proper Know Your Customer (KYC) checks to verify the identity of the beneficial owner.
A Nominee Shareholder Agreement or Declaration of Trust will typically outline:
- The beneficial owner’s full rights to the shares, including voting rights and the right to dividends
- The nominee shareholder’s obligations to act in the best interests of the beneficial owner
- Provisions for the transfer or disposal of shares when required
Key Considerations for Choosing Directorship Services in Brunei
When selecting directorship services in Brunei, including nominee director and nominee shareholder services, the following factors should be carefully considered:
- Reputation and Experience: Ensure that the service provider is well-established and has a strong reputation for providing reliable and legally compliant directorship services.
- Regulatory Compliance: The service provider must adhere to all relevant laws and regulations, including those related to AML, CFT, and KYC.
- Transparency: Clear and transparent agreements outlining the roles, responsibilities, and liabilities of nominee directors and shareholders are essential.
- Cost Structure: Be aware of the costs involved in nominee director and nominee shareholder services, as these can vary depending on the service provider.
- Indemnity and Insurance: Ensure that the nominee director or shareholder is adequately covered by indemnity insurance in case of legal claims or disputes.
Final Thoughts: The Importance of Directorship and Nominee Services for Business Success in Brunei
Directorship services in Brunei, including nominee director and nominee shareholder arrangements, play a vital role in helping foreign investors establish and manage their businesses while complying with local regulations. These services provide flexibility, ensure legal compliance, and protect the privacy of the beneficial owners. However, it is crucial for investors to carefully select a reputable service provider and ensure that all agreements are legally sound and transparent.
Understanding the nuances of directorship services in Brunei can help foreign entrepreneurs navigate the legal landscape and set up their business with confidence, knowing that they are meeting regulatory requirements while protecting their interests.
For more information or queries, please email us at
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Key Contact
Surendra Singh Chandrawat
Managing Partner
