As Asian powerhouses such as Singapore, South Korea and Hong Kong steadily strengthen their respective startup ecosystems, potential contenders of the likes of Brunei have begun to emerge on the scene.
Brunei has been known as a wealthy nation but has stayed somewhat under the radar for the advancement of its startup scene. We look at why and where it is headed.
A fertile ground for startups
Touted as having one of the world’s highest standards of living, Brunei mirrors many of the advantages that countries, such as Singapore, offer and – perhaps – more.
Among these are a favourable tax regime (absolutely no income tax and low corporate tax pegged at 18.5%), stable economic environment, ease of registering businesses and low inflation figures.
The nation also provides its citizens with advanced social support including free healthcare and education as well as subsidies for key necessities, such as staple foods and fuel. This translates into potential savings for households and businesses.
Outside of activities that directly impact natural resources such as the oil and gas as well as fisheries industries, the country offers 100% foreign ownership – a big plus for those looking to expand their businesses there.
The Bruneian startup ecosystem is one that has progressed significantly driven by strong support from the government. For instance, the formation of Startup-Brunei Programme – a venture builder that was established by Brunei Economic Development Board to encourage innovation and attract international startups to set up in Brunei.
Brunei’s government also runs programmes through organisations such as iCentre, creating a technological and innovation ecosystem that supports the development of startups geared towards nation-building. This will only further strengthen the local business scene.
Brunei has also realised the need to move away from a dependence on their oil and gas sector, with resources expected to dwindle within the next two decades.
The Brunei government has put into effect its industry aspirations in the form of Wawasan 2035, with the aim of achieving a GDP target of 63% contribution from the Non Oil and Gas Sectors through bolstering Foreign Direct Investment (FDI) as well as through the strengthening and growing the local businesses in Brunei.
The initiative will work in tandem with Darussalam Enterprise (DARe), established as a statutory body to nurture and support local enterprises across their different stages of growth.
The region starting to warm up to Brunei
All the positivity surrounding the Bruneian startups ecosystem has had a positive effect on the region. Neighbouring countries recognise that true collaboration needs to spread across borders and the region is responding accordingly.
One example of this is seen in the recent announcement of DARe’s ‘Start-up Boot Camp’ programme, set up to equip Bruneian startups and SMEs with the skillsets they need to establish scalable and sustainable businesses. The hundred-day programme will focus on startups across the areas of F&B, agriculture, healthcare, cosmetics, and technology. This is the 4th rendition on the country’s accelerator program in these series, this time seeing a joint partnership between DARe and Golden Equator Consulting that exhibits the nation’s ongoing push for advancements in its entrepreneurial sphere.
Startups within the country are also beginning to spread their wings and gain valuable recognition regionally. The ASEAN Rice Bowl Awards, an annual awards ceremony celebrating the spirit of innovation and entrepreneurship in the Southeast Asian startup ecosystem, saw Bruneian Agrome IQ win the Special Recognition award in 2017. The company created an agriculture business intelligence platform that supports decision-making for farmers.
Brunei has also found its distinct advantage across the Islamic Finance industry, and has been lauded for its practical and innovative developments in the area, developed with the intention of providing its people with a viable alternative financial system that is Syariah compliant. It is also likely that in the next several years, the nation will further open up these services through innovative developments to countries with a growing emergence of tech-savvy middle classes. Examples of this have already been seen in other nations such as Abu Dhabi Islamic Bank’s (ADIB) continuous efforts to accelerate its digital transformation strategy and enhance customers’ experience.
Although the Bruneian startup landscape is still in its infancy stage, it would seem that they are on the right track for success. Couple all the factors listed above with them appreciating the necessity to collaborate with other entrepreneurial nations and one can rest assured that the country will be one to watch in the next years.