On 2 January, the Sultanate of Oman’s new Foreign Investment Law came into force offering, several incentives and expanding the number of investment sectors open to foreign investors. The new law is designed to make the country an attractive investment environment for international and expatriate investors.
Governments in the Gulf Cooperation Council (GCC) states have been vying with each other to attract foreign investments by introducing further reforms to existing investment laws or implementing plans that create a more robust regulatory environment for investment. In a bid to diversify their economies away from their mainstay of hydrocarbon revenues, GCC nations have also been encouraging the private sector to play a more important role in development. The roll-out of the new law, exactly six months after it was initially published in the official gazette, is expected to give Oman a foothold in this highly competitive market for international investments
Speaking about the law, Ibrahim bin Said Al-Mamari, chief executive officer of the newly created Investment Services Centre at the Ministry of Commerce and Industry, said that the Foreign Capital Investment Law No. 50/2019 will ensure the stability of foreign investment in the Sultanate. He added that provisions of the law are applicable to every non-Omani natural or legal person who sets up an investment project in the Sultanate, using his capital and assets for the project which is economically feasible for the country.”
Al-Mamari stated that those choosing to invest in the Sultanate will receive “incentives, privileges and guarantees” through various Articles of the law. Some of these include, Article 18, which gives the right to avail all of the advantages, incentives and guarantees enjoyed by the national projects in accordance with the laws already practiced in the Sultanate. Additional benefits may also be given to foreign investment projects established in the less developed regions of the Sultanate.
Article 19 of the law permits the allocation of land and real estate for the investment project under a long-term lease. It also grants the right of usufruct without the need for the provisions of the Royal Decree regulating the use of land in the Sultanate, or the Land Law, to be adhered to.
The authorities will specify and allocate sites in each governorate for the establishment of investment projects with the right of usufruct. They will also provide general services such as water, electricity, gas, sewage, roads, communications and other such facilities to the project area.
Article 21 of the law stipulates that the investment project, either by itself or via third party, can import whatever it requires for its establishment, expansion and operation. This includes production requirements, materials, machinery, spare parts and means of transport suitable for the nature of its activity, without the need to register itself as an importer.”
Article 23 of the law stipulates that projects can not be seized and investment cannot be frozen or taken into custody, except by a court ruling. It is also exempt from taxes of the state. Similarly, the right of usufruct or lease cannot be seized in the case of privatisation of the lands or real estate, except in cases prescribed by law or a court ruling.
He added that the Foreign Capital Investment Law allows investors to establish a company in one of the permitted activities and own the entire capital of the company. “There is no limit on the capital for the companies established under this law, provided the foreign investor adheres to the timetable submitted by him to implement his project and approved in accordance with the economic feasibility study,” said Al-Mamari.
He went on to point out that the investment law will play an important role in attracting foreign investment, helping in the flow of capital for the establishment of companies that could absorb the giant economic projects planned by the Sultanate. “It increases the level of efficiency of operating companies and helps in the transfer of economic expertise and modern investment technologies. This leads to the diversification of the economic base and has positive impacts.”
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