Wednesday, June 25, 2008

The Oman Law Digest 2009 - TOURISM

Depletion of energy reserves has accelerated the pursuit of alternate sources of revenue and Oman’s endowment with varied landscapes unmatched in the region has pushed tourism to the forefront.

To promote the market and develop tourism in Oman, the Ministry of Tourism was carved out of MCI following issuance of the Law of Tourism [RD 33/02] and Executive Regulations [MD 91/03]. Responsibilities of this Ministry include: (i) making a comprehensive evaluation of Oman’s tourism potential and developing it as an alternate source of revenue to oil and gas; (ii) drafting national five-year plans and programmes for development of tourism; (iii) reviewing new tourism projects, attracting foreign investments and recommending tax and other exemptions for tourism projects; (iv) assistance in identifying and alloting of land for tourism and setting up tourism projects in accordance with Land Law [RD 5/80], Usufruct Law [RD 5/81] and Foreign Capital Investment Law [RD 102/94]; (v) determining fees and granting licence for tourism-related services; and (vi) monitoring and controlling prices for services offered by hotels and tourist establishments.

A natural or corporate person engaging in a tourism-related commercial activity must obtain the relevant licence from the Ministry. A fine of up to RO 3,000 may be imposed and/or licence may be revoked for violating provisions of the law.

A licence is required for establishing or utilising tourist resorts, construction of hotels or tourist establishments, operating travel and tourism offices, establishing time-sharing resorts, bringing foreign performing artistes from abroad, etc. Appendices attached to Executive Regulations specify details regarding the fee payable for each licence, duration of licence, bank guarantees required for licence, and time regulations for foreign performing artists.

Law lays down criteria for classification of hotels and tourist establishments and allotting grades which may be altered if found necessary during technical and administrative inspection.

Applicants for a licence as tourist guides must appear for tests to be conducted in knowledge of history, culture, ancient monuments, heritage, geography, social science, Arabic and at least one foreign language. Based on location of practice, tourist guide may be granted licence as a general tourist guide or regional tourist guide.

Many real estate tourism projects are underway. This has also led to issuance of Law on Integrated Tourist Complexes [RD 12/06] permitting non-Omani individuals and companies to own land and build units for residential and investment purposes in areas designated by the Government as Integrated Tourist Complexes (“ITC”). Pursuant to this law, the Government grants usufruct rights to real estate developers over ITC land and obligations of developers are recorded in a development agreement. Most ITC projects have well-defined tourism, commercial and housing components.