Legal Framework
The primary legislation governing foreign investment in Oman is the Foreign Capital Investment Law (Royal Decree 50/2019) and its implementing regulations. The 2019 law significantly liberalised the investment framework compared to its predecessor, extending 100% foreign ownership rights to most commercial activities and streamlining the approval process.
Key legislation:
- Royal Decree 50/2019: Foreign Capital Investment Law — the primary FDI framework
- Royal Decree 29/2018: Investment Climate Law — complementary business environment reforms
- Royal Decree 35/2025: Establishment of the Investment and Commercial Court — critical for dispute resolution
- Royal Decree 43/2021: Establishment of OPAZ (Public Authority for Special Economic Zones and Free Zones)
Permitted Activities
Under Royal Decree 50/2019, foreign investors may establish wholly-owned entities (100% foreign ownership) in the vast majority of commercial and industrial activities in Oman. This represents a significant departure from earlier requirements for Omani partnership.
Activities generally open to 100% foreign ownership:
- Manufacturing (all categories)
- Services (professional, financial, logistics, hospitality)
- Trading and distribution
- Technology and digital services
- Healthcare and education (private sector)
- Real estate development (within regulatory framework)
- Construction and engineering
Foreign investors can establish:
- Wholly Foreign Owned Company (WFOC): 100% foreign-owned limited liability company
- Joint venture: Omani-foreign partnership (no minimum Omani share requirement in most sectors)
- Branch of foreign company: Foreign company branch for specific project execution
- Representative office: For liaison functions (not permitted to engage in commercial activities)
Restricted Sectors
Certain sectors retain restrictions on foreign ownership for strategic, security, or national interest reasons:
Excluded activities (100% Omani ownership required):
- Real estate brokerage (as distinct from development)
- Employment and staffing agencies serving domestic workers
- Customs clearance (primary licence)
- Retail (some sub-categories)
Sectors requiring specific approval:
- Defence and security-related activities
- Telecommunications (subject to Communications Regulatory Authority licensing)
- Banking and financial services (Central Bank of Oman licensing required)
- Healthcare facilities (Ministry of Health approval)
- Mining (Ministry of Energy and Minerals concession)
OPEC+ energy production: Upstream oil and gas production is managed through concession agreements with the Ministry of Energy and Minerals — foreign participation is through production sharing agreements, not company ownership of reserves.
Investment Registration
The registration process for foreign investment has been streamlined progressively:
OPAZ One-Stop-Shop: For investments in OPAZ-regulated zones (Duqm SEZ, Salalah Free Zone, Sohar Free Zone, Al Mazunah), investors engage a single authority for initial approvals, land allocation, and licensing.
Invest in Oman Hall: Activated in 2024, provides integrated investor services for all investment types, including non-zone investments.
Ministry of Commerce and Industry: Handles commercial registration for companies established outside economic zones.
Estimated timelines (2024): Company registration in Oman typically takes 1-3 weeks for standard commercial entities in most sectors — improved from earlier periods when the process was longer and less predictable.
Investment and Commercial Court
Royal Decree 35/2025 established the Investment and Commercial Court — perhaps the single most significant recent reform for investor confidence. The dedicated court provides:
- Commercial law expertise (specialist judges with business and investment law background)
- Faster resolution timelines than general courts
- Predictable, consistent application of commercial law
- Alternative dispute resolution (ADR) mechanisms as preferred first step
Prior to the court’s establishment, investors frequently cited commercial dispute resolution as slow and unpredictable — a significant barrier to FDI confidence. The dedicated court directly addresses this concern.
Free Zone Investment
Investments in OPAZ-regulated free zones benefit from enhanced incentives:
- 100% foreign ownership (universal in zones, regardless of sector)
- Corporate tax exemption: 25-30 year tax holiday from commencement of operations
- Import duty exemption: On inputs, equipment, and goods for re-export
- No personal income tax
- No restrictions on capital or profit repatriation
- Streamlined residency visas for investors and employees
Zone-specific additional benefits vary — Duqm SEZ, Salalah Free Zone, and Sohar Free Zone each offer tailored incentive packages for priority industries.