The Foreign
Capital Investment Law of 1994, amended from time to time, governs foreign investment
in Oman. Under this law, any foreign national or entity wishing to invest in Omani
companies must obtain approval from the Ministry of Commerce & Industry.
One
of the recent significant changes in the foreign investment law is to allow foreign
ownership up to 70% to most of the sectors provided the capital is not less than
Omani Rials150, 000 (US$ 390,000).
Even 100 % foreign ownership is allowed
provided the capital is at least Omani Rials 500,000 (US $1.3 million) and the
project contributes to the development of the national economy.
Foreign
companies engaged in certain business activities in Oman are allowed to operate
through branch offices and are exempted from the requirements of the foreign capital
investment law. They can also open commercial representative offices in Oman for
non-commercial purposes.
Tax exemptions are available for entities engaged
in manufacturing, mining, agriculture, fishing, fish processing, animal breeding,
tourism, export of manufactured and reprocessed products, higher education and
public utilities. Exemptions are granted for the initial five-year period, extension
may be granted for another term.
Companies engaged in the activities
listed above are also eligible for exemption from the payment of customs duty
on import of equipment, spare parts and raw materials.
As part of the reform
process, the government is at present reviewing this law and a more investment
friendly law is expected to be in place at an early date.
