2017 Index of Economic Freedom

Brunei Darussalam

overall score69.8
world rank35
Rule of Law

Property Rights62.5

Government Integrity40.9

Judicial Effectiveness39.9

Government Size

Government Spending61.2

Tax Burden85.6

Fiscal Health100.0

Regulatory Efficiency

Business Freedom76.6

Labor Freedom90.4

Monetary Freedom76.1

Open Markets

Trade Freedom89.1

Investment Freedom65.0

Financial Freedom50.0

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Quick Facts
  • Population:
    • 0.4 million
  • GDP (PPP):
    • $33.2 billion
    • -0.2% growth
    • 0.0% 5-year compound annual growth
    • $79,587 per capita
  • Unemployment:
    • 1.9%
  • Inflation (CPI):
    • -0.4%
  • FDI Inflow:
    • $173.2 million
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Oil and gas revenue have helped to make Brunei one of the world’s richest economies, but long-standing efforts to modernize the economic structure have met with only limited success. Recently, a higher priority has been placed on measures to diversify the economy and attract more foreign investment, and the corporate tax rate has been cut to 18.5 percent.

With oil revenues down, fiscal adjustments have been at the forefront of reform efforts, particularly in terms of improving the efficiency and composition of public spending. Brunei continues to benefit from moderately well-maintained monetary stability and a relatively high level of market openness that facilitates engagement with the world through trade and investment.



Brunei, two small disconnected enclaves surrounded by the Malaysian state of Sarawak, lies on the northern coast of Borneo. The sultan serves as his own prime minister, minister of defense, foreign minister, and minister of finance. He is advised by several councils, including a Legislative Council and Privy Council, which he appoints. The oil and gas industry accounts for over half of GDP and 90 percent of government revenues. However, it generates only a small fraction of employment, and most of the population works directly for the government. Brunei has extremely low manufacturing capacity and imports most of its manufactured goods and food.

Rule of LawView Methodology

Property Rights 62.5 Create a Graph using this measurement

Government Integrity 40.9 Create a Graph using this measurement

Judicial Effectiveness 39.9 Create a Graph using this measurement

Protection of private property is weak. Only citizens may purchase land; foreign firms must have a local partner. The constitution does not provide for an independent judiciary. Brunei is one of the world’s last remaining autocracies, and Sultan Hassanal Bolkiah wields nearly absolute powers. In 2016, the government slowed the planned full implementation of sharia (Islamic) law because it might jeopardize Brunei’s inclusion in the Trans-Pacific Partnership trade pact.

Government SizeView Methodology

Brunei has no personal income tax. The top corporate tax rate is 18.5 percent for most companies; the rate for oil and gas companies is 55 percent. The overall tax burden equals 33.1 percent of total domestic income. Government spending has amounted to 36 percent of total output (GDP) over the past three years, and budget surpluses have averaged 1.9 percent of GDP. Public debt is equivalent to 3.1 percent of GDP.

Regulatory EfficiencyView Methodology

Registration requirements for starting a business have been simplified, and a one-stop shop now facilitates the overall operation of small and medium-size enterprises. The labor market is relatively flexible. The government provides large price-distorting subsidies for nearly everything the average citizen needs (for example, fuel, power, food, health care, and education).

Open MarketsView Methodology

Trade is extremely important to Brunei’s economy; the value of exports and imports taken together equals 107 percent of GDP. The average applied tariff rate is only 0.5 percent. State-owned enterprises distort the economy, and foreign ownership of land is restricted. The small financial sector remains dominated by banks, which are well capitalized. Islamic financial services have grown considerably in recent years.

Country's Score Over Time

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Regional Ranking

rank country overall change
1Hong Kong89.81.2
3New Zealand83.72.1
6South Korea74.32.6
7Malaysia 73.82.3
9Brunei Darussalam69.82.5
13Thailand 66.22.3
19Kyrgyz Republic 61.11.5
25Sri Lanka57.4-2.5
27Solomon Islands558.0
28Bangladesh 551.7
32Pakistan 52.8-3.1
37Papua New Guinea50.9-2.3
43North Korea4.92.6
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