Land Law Update: Royal Decree Allows Expansion of Property Size

Over the last few years the Omani authorities have taken numerous steps toward liberalizing the rules for expatriate ownership of real estate in the Sultanate. Over the last few years the Omani authorities have taken numerous steps toward liberalizing the rules for expatriate ownership of real estate in the Sultanate.

Just two years ago, for example, the Government significantly relaxed the restrictions on landholding for Omani joint-stock companies with foreign ownership. Joint-stock stock companies with real estate development among their corporate objects and with foreign shareholding of up to 70 percent were granted the right to own land on a freehold basis for the purpose of real estate development. Prior to the change, only joint-stock companies with at least 51 percent Omani shareholding had been allowed to own land in Oman – and only for purposes subservient to the company’s business objects, such as for showroom, warehouse or administrative office space or for employee housing. This pivotal new rule made it possible for Omani real estate development companies with foreign shareholding to directly transfer freehold ownership to their purchasers or their units.

The Government has also broadened land ownership rights in Oman for expatriate individuals. GCC nationals have been granted land ownership rights within the Sultanate that are almost on par with those of Omani nationals. (Among the main distinctions is that non-Omani landowners are required to develop the land and not dispose of it before the lapse of a stipulated time period, and non-Omani landowners face more stringent conditions for minimum build requirements and for assigning their land ownership rights.) Even non-GCC expatriates are now able to own real estate within designated integrated tourism complexes (ITCs) in Oman.

Recently, the Government’s most recent addition to Omani real estate law, Royal Decree No. 43-2012, has taken land ownership rights one step further, by allowing for the “expansion or increase in land area [of a given plot of land]”. The new rule applies to Omanis, GCC nationals, and non-GCC expatriates alike. While this is more of an incremental change compared to some of the sweeping amendments of the past few years, it nevertheless is a promising sign that the Omani authorities are actively focused on reviewing and enhancing the legal framework for real estate ownership in the Sultanate.