Oman: Investing

FDI in Figures

According to UNCTAD's World Investment Report 2023, foreign direct investment (FDI) inflows to Oman amounted to USD 3.7 billion in 2022, showing a 7.6% decrease from USD 4 billion the previous year. By the end of the same period, the total stock of FDI reached USD 49.5 billion, equivalent to around 43.2% of the country’s GDP. The United Kingdom was the largest investing country, followed by the United Arab Emirates, Kuwait, Qatar, and Bahrain, as reported by the National Centre for Statistics and Information (NCSI). The majority of FDI was directed towards the oil & gas sector, with lower shares allocated to the financial services, manufacturing, and real estate sectors. Oman's foreign direct investments experienced a growth of 3.78%, reaching approximately USD 59.54 billion by the conclusion of the third quarter of 2023, based on data from the National Center for Statistics and Information.

The enactment of the new Foreign Capital Investment Law in 2020 marked a significant step towards attracting further foreign investment in Oman. This law removed the minimum 30% Omani ownership requirement for Oman-based companies, aimed at streamlining registration and licensing procedures for foreign investors, and aligned foreign investors’ rights and incentives with those given to local investors. Special Economic Zones have also been instrumental in attracting substantial foreign investment, although there is potential to enhance spillover effects from these economic zones to the local economy, according to the IMF. Additionally, Oman introduced new incentives for foreign investors, including exemptions from certain fees and operational requirements for investment projects in the country's less-developed regions. However, Oman currently lacks a screening mechanism for investments concerning competition considerations, and there is no active competition commission in the country. Overall, Oman ranks 69th among 132 economies on the Global Innovation Index 2023 and 56th out of 184 on the latest Index of Economic Freedom.

What to consider if you invest in Oman

Strong Points

Oman has a strategic location within the east-west nexus joining markets in Europe and Asia. Its ports are one of the most strategically placed in the world and provide fast sailing times to major markets in Asia. Good air connectivity and road infrastructure facilitate access to other GCC countries. Currency risk is low as the country's currency, rial, is pegged to the US Dollar and the Central Bank of Oman has high levels of foreign exchange. Oman does not impose any personal income tax and allows full repatriation of capital, net profit and royalties. The local labour force is highly skilled (most finish their studies in the UK or in the US).

Weak Points

Some challenges for foreign investors seeking to establish in Oman: The time it takes to set up a local business outside of free trade zones and to obtain operating licenses, local ownership requirements outside of free trade zones (setting up a 100% foreign-owned is nearly impossible), Omanisation policy (requirement to employ Omani nationals)

Government Measures to Motivate or Restrict FDI

The Foreign Investment Law (FCIL), promulgated by the Royal Decree No. 102/94 is the main legislation regulating foreign investment in Oman. The law provides for interest-free loans to the private sector in agriculture, fisheries, industry, mining and quarrying. Industrial firms enjoy low-interest loans from the Oman Development Bank. Custom duties are exempted on import of equipment and raw material. Corporate tax is exempted for the first five years of activity (can be extended for another period of five years). There are no limits on the repatriation of capital, net profit and royalties. Free trade zones in Duqm, Salalah, and Sohar provide enhanced tax-free holiday, duty-free treatment of all imports and exports and have lower Omanisation requirements. The Free Trade Agreement with the United States allows US citizens to bypass requirements regarding the process of setting up a business and to be treated as Omani (or GCC) nationals.

Procedures Relative to Foreign Investment

Freedom of Establishment

Non-Omanis (except for GCC and US citizens) cannot own more than 70% of shares of a company (The status of wholly foreign-owned company is rarely granted). Minimal share of the Omani citizen must be 30%. Foreign investors are further required to employ Omanis in addition to expatriates.

Acquisition of Holdings

The foreign share of in an Omani company cannot exceed 49% of the total capital (can be exceptionally raised to 65% or 100% by a decision of the Omani Minister of Commerce and Industry). Foreigners can only purchase shares in the Muscat Stock Exchange via an authorised broker. Real estate brokerage services, which were also limited to authorised Omani brokers, have been opened up to all Omani residents as of January 2018.

Obligation to Declare

Applications for foreign investment licence must be addressed to the Foreign Capital Investment Committee within the Ministry of Commerce and Industry. The Committee gives its opinions on the identification of the investment fields and the extent to which the project can be considered as one of the economic development projects while also giving priority to projects that use local products and raw materials, and attract internationally reputed industries. The Minister has the final say on the granting of licence.

Competent Organisation For the Declaration

Invest Easy (One Stop Shop)

Requests For Specific Authorisations

Public authorities reserve the right to inspect compliance of foreign investment projects with environment, health and other standards at any stage of operation.
70%-foreign ownership rule does not apply to investments in the electricity and water sector where 100% foreign ownership is allowed.
The Omani government can exceptionally extend foreign ownership rights of a company upon recommendation of the Minister of Commerce and Investment stating that the proposed investment activity is crucial and critical to the economic development of and to the national interests of Oman.

Investment Opportunities

Investment Aid Agency

Ithraa -  Public Authority for Investment Promotion & Export Development

Tenders, Projects and Public Procurement

Electronic Tender Board, Tender Board of the Sultanate of Oman
Tenders Info, Tenders in Oman
Oman Projects, Tenders, projects, enquiries and business deals from the Sultanate of Oman

Other Useful Resources

Invest Easy Initiative
Oman Investment Corporation
Investor's Guide (Oman Chamber of Commerce and Industry)

Any Comment About This Content? Report It to Us.