Brunei targeting investment from MROs

Singapore
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Brunei is looking to attract investment from aerospace companies in an effort to broaden its economy beyond petrol, and has roped in Piper Aircraft.

"The Brunei Economic Development Board (BEDB) is especially keen to promote foreign direct investment in the areas of aircrew training as well as maintenance, repair and overhaul" of airframes, engines, landing gears and components, says BEDB head of marketing and investment promotion, Sheikh Rashid Salam, who was previously a senior executive at Royal Brunei Airlines.

"In an effort to bolster aviation related activities the aviation cluster and all of its supply chain activities may enjoy tax breaks of up to 11 years or more", says Rashid.

"There is no restriction on investor ownership, companies can be 100% foreign owned," he says. "There is also no income tax, capital gains tax or manufacturing tax in Brunei", and utility and labour rates "are considered one of the cheapest in the region."

"The absence of industrial union associations makes Brunei an attractive destination for international corporations," he adds.

In terms of infrastructure, there is readily available hangar space at Brunei International Airport and national carrier Royal Brunei Airlines (RBA) could assist, says Rashid.

"RBA engineering has EASA 145 accreditation with type specific capabilities on Airbus A320s, Boeing 757s and Boeing 767s," he adds.

"A joint venture establishment with the national carrier could, for example, specifically focus on maintenance activities such as engine overhaul, landing gear repairs, cabin interior repairs and electronics repairs.

"Original equipment manufacturers could equally set up manufacturing, distribution and research development facilities in Brunei to capitalize on the tax incentives, utility and labour costs."

Rashid says: "The country's intention to develop as a regional aviation hub was most clearly illustrated in May [last year] when the government-backed investment arm Imprimis acquired 100% of" US general aviation manufacturer Piper Aircraft.

"Brunei is set to become the centre of Piper's expansion in Asia with plans to establish a Brunei-based subsidiary Piper Asia to co-ordinate and execute the company's Asian growth strategy," he says.

Piper president John Becker told ATI's sister publication Flight International last September that Piper is seeking a partner for a pilot training school it wants to establish in Brunei.