Brunei REAL ESTATE MORTGAGE LOANS BANKS
It all began in 1997, when oil prices fell, and the reduction of the Asian economy has affected the economy of Brunei, which depends almost entirely on exports of oil and gas. In the same year, the company controlled by one of the brothers Sultan, Prince Jeffrey, was bankrupt, with 3,5 billion dollars of debt.
Alarmed by the Sultan turned to another brother, Prince Mohamed, that he appreciated the economic prospects of the Sultanate. Mohamed Committee in 1999 agreed: despite the fact that Brunei possessed a rich property, there were worrying signs of economic problems that threatened to undermine economic prosperity and, consequently, social stability. “
By 2001, Brunei’s GDP per capita fell to 12,600 dollars, ie by 44% compared with 22,600 dollars in 1981. Sultan gave to Jeffrey before the Supreme Court of Brunei, saying that his brother had misappropriated a $ 15 billion for international investment. The Royal brothers have agreed without trial, and Jeffrey promised to return the money. John Perry, executive head of the Government’s Office of Economic Development, said Sultan, who is not only the monarch of Brunei, but its prime minister, finance minister and defense minister, now believes that the natural riches of his sultanate is not enough to ensure prosperity for all. So far 345 thousand subjects of the monarch still do not pay taxes and enjoy free health care and education, but, says Perry, the Sultan of Brunei intends to reduce its dependence on oil and gas sales comprising 94% of exports.
Sultan, apparently plans to turn Brunei into an offshore financial center on the likeness of Bermuda or the Cayman Islands. The scheme of such offshore obvious: people are investing in similar financial centers to avoid paying taxes in their countries, or to secure a banking secrecy. According to the agency Standard & Poor, investors poured more than 1,7 billion dollars in investment funds that operate in only 10 of the 65 offshore jurisdictions. These centers are Luxembourg, Ireland, Cayman Islands, Bermuda, Netherlands Antilles, Guernsey, British Virgin Islands, Jersey, Netherlands and the Isle of Man.
Brunei does not have any of its stock exchange or securities market. Neither his company is not traded anywhere in the world, even including the very large companies, for example, Brunei Shell Petroleum, a mixed enterprise, half of which belongs to the government, half of Royal Dutch / Shell Group. The Sultanate has no central bank, he has artificially boosted the level of the local currency, Brunei dollar, at around one to one against the Singapore dollar. Operations carried out in Brunei, local banks and seven foreign. Their assets are estimated at 6,6 billion dollars.
Of the fifty largest global banks, only two, Citigroup Inc. and HSBC Holdings, to do business in Brunei. While Luxembourg has sheltered 7,818 investment funds, assets which together is estimated at 1.34 trillion dollars. In Brunei office is only one fund, with assets of about 1,5 billion dollars. Geographically, in Brunei there is only one financial center-rival, Labuan, Malaysia. He is only 45 miles from Brunei.
The actions of the Sultan towards transforming the country into a financial center have been very rapid. In January 2000 he hired Robert Miller, a lawyer with a practice in Bermuda, that he had primary legal work for the establishment of an international financial center in Brunei. As head of the supervisory agency, Miller developed the laws subordinating Brunei international laws to combat money laundering and tax evasion. Sultan, ruling the country without a legislature, introduced the laws in force by royal decree.
Brunei gave the first offshore banking license of the Royal Bank of Canada. The license allows the Bank of Canada to accept deposits only from persons residing outside the country and provide investment services to these people, such as fund management. The license does not allow the bank to conduct banking investments. A branch bank in Brunei opened on August 2 this year. “We are not doing so voluntarily,” - says Trevor Wynn, executive director of the Royal Bank of Canada in Singapore. “We are doing this to make money.”
Currency Exchange Brunei meanwhile will start in the near future. Yong Boon Chung, executive director of Nesdex, the Internet company in Singapore that the Sultan had hired for the establishment of electronic exchange, said that the original plan - trading on stock exchanges in the U.S. and Asian futures contracts for the products of companies such as Microsoft and Taiwan Semiconductor Manufacturing.
By 2004, investors will be able to bid via IBX shares of the companies represented at the various Asian markets. Miller said that Brunei will attract a growing number of wealthy people in Asia and beyond. In 2001, the general welfare of Asian millionaires grew by 7% to 5.1 trillion dollars, and in total they control 20% of wealth around the world. Being a Muslim country, Brunei will also attract business companies, which are subject to the Islamic ban on pay and receive interest. Incidentally, in all Islamic financial institutions around the world manage 225 billion dollars. And this property is growing annually by 15%.