Country GuideOman

From Global Connections

Oman received USD1.2 billion foreign direct investment (FDI) inflows in 2014. The majority of foreign investments continue to contribute to the oil sector.

Oman ranked 70th in the World Bank's 2016 Doing Business rankings, up seven places from 77th in the year prior. The rankings recognised a number of reforms enacted by the country to make doing business easier. This included: reducing the time for border compliance for both exporting and importing by transferring cargo operations from Sultan Qaboos Port to Sohar Port. Oman also made getting electricity easier; it improved the regulation of outages by beginning to record data for the annual system average interruption duration index (SAIDI) and system average interruption frequency index (SAIFI).

Key facts about starting a business in Oman:

  • It takes five procedures and approximately seven days to start a new business in Oman; this process is detailed in the Doing Business in chapter
  • The government sets mandatory ratios of Omani to expatriate employees permitted in certain sectors; employment regulations are discussed in detail in the Labour chapter
  • Obtaining a building permit takes approximately 14 days and, in general, costs OMR113
  • All Omani incorporated entities must prepare statutory financial statements in accordance with the International Financial Reporting Standards (IFRS); further details can be found in the Audit chapter
  • Companies that wish to list securities on the Muscat Securities Market must, amongst other requirements, have achieved net profits in the last two years; capital markets are discussed in the Finance chapter

Oman's attractiveness as an investment location can be attributed to a number of factors, including its limited taxation and proximity to other Gulf markets. Nevertheless, in order to make an informed decision, it is critical to understand the nuances of any local regime. The manner in which people conduct business in Oman may differ from the home countries of investors. Furthermore, variations on these distinctions may exist depending on the Emirate and the industry in which a company operates.

Oman's official language is Arabic, although English is widely used in business. Business attire is smart and conservative. A handshake is the typical business greeting and will be used at the beginning and end of a meeting. Punctuality is valued in Oman. Business cards will be exchanged after initial introductions.

Those looking to establish a business in Oman may look across the Middle East for alternative options. However, Oman can be differentiated on the following factors:

  • Political and economic stability; GDP growth of 3.25 per cent in 2015
  • Oman permits the full repatriation of capital, net profits and royalties
  • Oman has a low corporate tax rate at 12 per cent; this is further detailed in the Tax chapter
  • As part of the Oman 2020 vision, the government is investing USD50 billion in major construction and infrastructure projects; further details can be found in the Infrastructure chapter
  • Oman has four Free Zones in operation, offering significant incentives and exemptions to investors; discussed further in the Trade chapter

While there are significant opportunities for investment in Oman, a number of challenges remain. Unless operating in a Free Zone, a number of restrictions to full foreign ownership remain. High levels of bureaucracy mean that setting up a business can be a timely process; the country ranked 149th in the world for the ease of Starting a Business. The government has also enacted restrictions on the employment of foreign nationals through its Omanisation programme. Furthermore, certain categories of employment are reserved exclusively for Omani nationals.

This guide has been developed to provide businesses with an overview of Oman, its legal regime, start-up and market entry considerations, tax and customs requirements and a general summary of the factors that may affect the decision to do business in Oman. However, the information contained in this document is generic in nature and you should not act or rely on it without obtaining specific professional advice.

Please note that the Country Guides may only be available in English.

Useful Links

1 Ministry of Commerce and Industry
2 Ministry of Finance - Secretariat General For Taxation
3 Oman Customs
4 Ministry of Foreign Affairs
5 Ministry of Manpower
6 Free Zones - 1
7 Free Zones - 2
8 Free Zones - 3
9 Free Zones - 4

 

Sources

1 FDI Statistics
2 Doing Business Rankings
3 Oman 2020 investment

 

Download Country Guide - Oman (2.67MB, PDF)

Disclaimer

This document is issued by HSBC Bank Oman S.A.O.G (the Bank). This guide is a joint project with Grant Thornton. It is not intended as an offer or solicitation for business to anyone in any jurisdiction. It is not intended for distribution to anyone located in or resident in jurisdictions which restrict the distribution of this document. It shall not be copied, reproduced, transmitted or further distributed by any recipient. The information contained in this document is of a general nature only. It is not meant to be comprehensive and does not constitute financial, legal, tax or other professional advice. You should not act upon the information contained in this document without obtaining specific professional advice. Whilst every care has been taken in preparing this document, the Bank and Grant Thornton makes no guarantee, representation or warranty (express or implied) as to its accuracy or completeness, and under no circumstances will the Bank or Grant Thornton be liable for any loss caused by reliance on any opinion or statement made in this document. Except as specifically indicated, the expressions of opinion are those of the Bank and are subject to change without notice. The materials contained in this document were assembled in January 2016 and were based on the law enforceable and information available at that time.

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