Market Overview
The Duqm Special Economic Zone (DSEZ) is the flagship industrial development in Oman’s Vision 2040 diversification strategy. Located on the Arabian Sea coast of the Al Wusta Governorate, approximately 550 kilometres south of Muscat, the zone spans 2,000 square kilometres — making it one of the largest special economic zones in the Middle East. Duqm’s strategic value lies in its position outside the Strait of Hormuz chokepoint, providing direct Indian Ocean access for import and export operations without transiting the geopolitically sensitive Persian Gulf waterway.
The zone is governed by the Special Economic Zone Authority at Duqm (SEZAD), operating under a dedicated legal framework that provides regulatory autonomy, fiscal incentives, and streamlined investor services.
Opportunity Assessment
| Factor | Assessment |
|---|---|
| Zone area | 2,000 km² |
| Key infrastructure | Deepwater port, 230,000 bpd refinery, dry dock, fishing harbour, airport |
| Refinery | Duqm Refinery (OQ-Kuwait Petroleum JV), operational 2023 |
| Dry dock | Oman Drydock Company, one of the largest in the Middle East |
| Green hydrogen | Multiple projects under HYDROM framework targeting Duqm as export hub |
| Tax incentives | 30-year corporate tax exemption, customs duty exemption, 100% foreign ownership |
| Minimum lease term | 50 years (renewable) |
| Labour | Omanisation quotas apply but with zone-specific flexibility |
Risk Factors
Duqm’s remoteness presents operational challenges. The zone is 550 kilometres from Muscat with limited local population, requiring investment in worker accommodation and social infrastructure. The construction of connecting highway and rail infrastructure is ongoing but incomplete. Water scarcity in the Al Wusta region constrains certain industrial processes. The green hydrogen projects, while strategically compelling, remain in pre-construction phases with final investment decisions pending. The refinery, while operational, entered service during a period of uncertain long-term oil demand outlook.
Entry Strategy
- Target downstream processing and petrochemical activities that leverage refinery output and port access
- Evaluate green hydrogen and ammonia project opportunities as the HYDROM allocation process continues
- Consider logistics and warehousing operations serving Indian Ocean trade routes
- Engage SEZAD directly for land allocation, licensing, and infrastructure connection
- Assess workforce solutions given the remote location — SEZAD maintains worker accommodation facilities
Vision 2040 Alignment
Duqm is the physical centrepiece of Vision 2040’s industrial diversification strategy. The zone’s development represents Oman’s largest single investment in non-oil economic infrastructure. Success at Duqm — measured by tenant occupancy, industrial output, export volumes, and employment generation — is a bellwether for the broader diversification agenda. Pillar 2 (Economy and Development) targets directly reference Duqm’s contribution to manufacturing GDP, export diversification, and FDI attraction.