Muscat: The new investment laws that Oman plans on introducing could increase the growth of local businesses by up to 75 per cent, a senior official at the Ministry of Commerce and Industry has said.
Laws such as the Foreign Capital Investment law, which are scheduled to come into effect next year, will ensure more money stays within the Sultanate’s local economy, thereby providing more money to ensure everyone in the country has the opportunity to enjoy a good and sustainable standard of living, and allow for more economic growth to take place.
Speaking exclusively to Times of Oman, Mohammed Al Badi, the acting director of the Legal Department at the Ministry of Commerce and Industry, said, “The expected growth rate in the investment sector in the Sultanate will not be less than 75 per cent if the legislations are implemented properly and the appropriate investment environment is created and modern regulations are activated.”
The law will make it mandatory for investment service centres and other relevant organisations to abide by the procedures and deadlines required to issue foreign investors with the correct approvals, permits and licences to set up business operations in Oman.
Applicants will also receive approvals for their requests to set up businesses within a particular time frame, with a lack of a response within this period meaning their applications have been accepted.
Al Badi said: “The speed in the completion of transactions and the issuance of permits are the most important factors motivating investment in any country, so we look forward to the executive regulations of the law, which to be issued in the first quarter of 2020, to specify the deadlines for issuing the approvals within 30 days at least.”
Incentives for investors
The Foreign Capital Investment Law, issued under Royal Decree No. 50/2019, includes several incentives and advantages for foreign investments so as to encourage their flow into and stability in the Sultanate. Among the most important incentives included inside this law is the right of foreign investors to fully own the company and to not require the presence of an Omani partner.
Al Badi said: “The law created many incentives to encourage foreign investors to start their investments in the Sultanate. The law allows the establishment of a company in one of the sectors permitted within the Sultanate, with full ownership of and without determining the minimum capital, as long as the foreign investor adheres to the timetable provided for the implementation of the project and does not make any amendments to the project without ministry permission.”
“This requirement helps establish commercial companies in a short time and that will raise the level of the Sultanate on the international stage. In addition, the law gives the foreign investor the right to enjoy all the benefits, incentives and guarantees that are available to projects that are set up in the nation,” he added. “Here, according to the law, foreign investors can receive preferential treatment if they choose to set up an investment project of a huge skill that will meet the strategic and economic requirements of the state.”
Article 19 of the law stipulates that the relevant authorities will coordinate with the ministries and other bodies concerned to determine the sites allocated in each governorate to establish investment projects. It shall also coordinate with the competent authorities to provide public services such as water, electricity, gas, sewage, public roads, communications and others services, limited only to those that are required by the project.
“These incentives were not available in the previous law, Al Badi said. “For example, if the investor identifies a specific location for the project, which however is not among the sites allocated for investment, and it has been confirmed that it can only succeed if set up on this particular piece of land, once a study of its economic feasibility has been carried out, it is necessary to provide land in that location and the investment centre to address the concerned parties about this step.”
Guarantees to investors
“When an investor wants to come and start investing in the Sultanate, of course he will need all of this have all these services and infrastructure available on site,” Al Badi confirmed. The law establishes many guarantees that secure the rights of investors. No investment project may be confiscated or its assets taken, frozen, seized or guarded, except by a court order. The tax debt owed to the State is exempt. Subject to the laws in force in the Sultanate, the foreign investor is free to make all transfers related to the investment project to/from the Sultanate at any time.”
“The investment project may not be expropriated, unless it is in the public benefit to do so, and only once fair compensation has been provided without delay,” he went on to say. “The competent authorities may not cancel the approval, licences or permits issued for the investment project except by a reasoned decision after giving the foreign investor a written warning of the violation attributed to him, hearing his point of view, and giving him a period not exceeding thirty days from the date of his warning, to remove the reasons for the violation. The opinion of the ministry must be taken before the approval, license or permit is revoked.”