Investment in Oman has now become more attractive to foreign individuals as a result of the new
Foreign Capital Investment Law (Royal Decree 50/2019) (the “New FCIL”) that was published in the
Official Gazette in the second half of 2019 and came into force on 1 January 2020.
Under the New FCIL, foreign investors can now set up investment companies in Oman without any
capital requirements, and local participation is no longer mandatory. The Ministry of Commerce and
Industry (the “MOCI”) further facilitates the registration of companies subject to the New FCIL by
introducing an incentive package to ensure capital stability, allowing the transfer of profits abroad, and
simplifying the licensing procedures.
The New FCIL contributes to attracting foreign investments, enhancing the Sultanate’s position as an
investment destination capable of attracting foreign capital, and raising the Sultanate’s ranking in
global indicators relating to ease of business and economic diversification, as well as reducing the silent
partner arrangement that was common under the former FCIL.
The New FCIL will play an important role in attracting foreign investments and the flow of capital
within the Sultanate by creating appropriate conditions for investment so as to be competitive in
attracting investments from countries around the world, and granting incentives, privileges, and
guarantees that contribute to the establishment of foreign investments.
The MOCI supports applications for the registration of foreign investment companies and seeks to
facilitate and simplify procedures for obtaining all approvals, permits and licenses for investment
projects; and an integrated team has been assigned to oversee these applications.
In addition, the New FCIL has included a number of incentives to encourage foreign investment, of
which the most prominent are the following:
- Allowing foreign investors to own 100% (as mentioned above);
- The absence of a maximum foreign capital contribution; and
- Omani investors can enter into a partnership with foreign investors without a specified minimum percentage.
Investment projects established by foreign investors, either alone or with the participation of others in the Sultanate, enjoy all the advantages, incentives and guarantees that national projects enjoy under the laws in force in the Sultanate. The incentive package includes the possibility of allocating government land and real estate necessary for the investment project by way of long-term lease or by granting a usufruct.
In order to establish foreign investments in the Sultanate, the New FCIL guarantees the rights of existing investment projects in the Sultanate, including that investment projects may not be confiscated, seized, frozen, or guarded, except by a court ruling; and debt is exempted from taxable income. Ownership of the project may only be expropriated for the public benefit and in return for fair compensation paid without delay. Likewise, usufruct or lease contracts may not be terminated where land or real estate has been allocated except in accordance with legally established precedents or by a court ruling; and the competent authorities may not withdraw the approval or license or permit issued for the investment project, unless the investor has committed a serious breach of the terms of his investment followed by a reasoned decision in writing after (i) warning the investor of the breach and (ii) giving 30 days from the date of warning to remedy the breach. If the breach has not been remedied, the MOCI will gradually impose administrative penalties on those in breach.
