Two-year Omanisation exemption among benefits for foreign companies

Energy Saturday 25/July/2020 16:19 PM
By: Times News Service
Two-year Omanisation exemption among benefits for foreign companies

Muscat: Foreign companies that set up in some parts of Oman could receive a host of benefits, including a two-year exemption from Omanisation requirements and the removal of some or all of the fees required to operate in the country, a new report on Oman’s foreign investment plans has said.
The report, which has been published by JD Supra, a US economic consulting firm, hailed the Sultanate’s efforts and regulations to attract foreign investment and diversify the national economy.
“In addition to encouraging foreign investment in Oman, the regulations also aim to attract investment in certain locations and sectors,” the report said. “For example, Article 17 of the regulations sets out that a project established in the least developed regions of Oman, which have not been detailed in the regulations, will benefit from certain privileges such as low rentals on usufructs (for a period of investment not less than five years), and exemptions from two-year Omanisation requirements (and exemption from all or some of the prescribed fees).
“Furthermore, Article 19 of the regulations provides exemptions from taxes and customs duties for projects established in, amongst others, the IT and logistics sectors,” the report added. “In summary, the Regulations are welcomed as they provide further details regarding the application process for foreign investment.”
JD Supra said that the new Oman Foreign Capital Investment Law (FCIL) is considered a major step forward in investment growth. The report referred to the Executive Regulation issued by the Ministry of Commerce and Industry on 14 June, saying, “by removing the requirement for Omani companies to have at least 30 percent Omani ownership (as was generally the case under the old 1994 Foreign Capital Investment Law), the new FCIL is geared towards attracting foreign investors into Oman who can now invest in Oman without the need for any local shareholder.”
The report said that the Executive Regulation specifies a timetable for the execution of the investment project, a date of start of operations, a feasibility study and an accreditation certificate from an approved bank and any other information that the licensing authority concerned might specify.
JD Supra observed that the Executive Regulation states a set of other procedures, including dates for issuing licenses, clearances and licences, noting that these requirements also figure in the Invest Easy electronic system made available to all investors as determined in the investment guide issued by the Minister of Commerce and Industry.
The report said that investors are awaiting the investment guide or manual for further details.
“Article 9 of the regulations refers to various conditions and rules that need to be satisfied in respect of investment projects which can benefit from the new FCIL, with such conditions and rules being set out in an ‘investment manual’. The investment manual has not yet been made available by the MOCI and so we await further information on this,” said the report.