Employing citizen mandatory in foreign investor companies

Muscat: In a significant move aimed at bolstering local employment and aligning foreign investment practices with Omani regulations, the Council of Ministers has issued a mandate requiring foreign investors to employ at least one Omani citizen in their commercial operations within Oman.

This regulation, set to take effect on April 1, 2024, represents a pivotal step in ensuring that foreign enterprises contribute to the development and prosperity of the Omani workforce.

The decision comes as part of broader efforts by the Ministry of Commerce, Industry, and Investment Promotion (MoCIIP) to foster a more inclusive and equitable investment environment in the Sultanate of Oman.

By mandating the employment of at least one Omani citizen within foreign investors’ businesses, the government aims to strike a balance between attracting foreign capital and safeguarding the interests of the local workforce.

Engineer Ammar bin Sulaiman Al Kharousi, Director General of the Investment Services Centre at the Ministry, underscored the importance of this initiative in enhancing the attractiveness of Oman as an investment destination.

He emphasised that the government is committed to removing barriers and facilitating procedures for investors, both domestic and foreign, while ensuring that they contribute to the socio-economic development of the country.

Under the new regulation, foreign investors will be required to hire an Omani citizen within one year of commencing commercial activities in Oman. This employee must be registered with the General Authority for Social Insurance, thereby ensuring compliance with Oman’s labour laws and Omanisation policy, which aims to increase the participation of Omani nationals in the private sector.

To enforce compliance, the ministry will implement administrative measures, including prohibiting transactions on the Oman Business Platform for foreign investors who fail to meet the employment requirement.

Companies will be granted a 30-day grace period, extendable once, to rectify any non-compliance. Failure to adhere to the mandate will result in electronic flagging of non-compliant companies for monitoring and enforcement by relevant authorities.

This regulatory change builds upon previous reforms undertaken by the Omani government to promote foreign investment and streamline business procedures. Notably, foreign investors are now allowed full ownership in various sectors and can access over 1,700 commercial and industrial activities through the Oman Business Platform. Additionally, the government has reduced, cancelled, and merged 836 government services to facilitate investment endeavours and promote economic growth.

By mandating the employment of at least one Omani citizen in foreign investors’ businesses, Oman seeks to create sustainable employment opportunities, enhance skills development, and foster economic growth that benefits both investors and local population.