Overview
The regulatory environment governing Oman’s manufacturing sector has undergone significant reform under Vision 2040. Key legislative changes include the Foreign Capital Investment Law (2019), updated Commercial Companies Law, and sector-specific regulations aimed at improving ease of doing business. Oman’s ranking in the World Bank Doing Business index improved notably, though further regulatory modernisation is needed.
Key Indicators
| Indicator | Current | 2040 Target |
|---|---|---|
| Primary Regulator | Sector ministry | Enhanced governance |
| FDI Framework | Open with conditions | Fully liberalised |
| Licensing Complexity | Moderate | Streamlined |
Analysis
Regulatory reform in the manufacturing sector balances investor attraction with national interest protection. The sector’s regulatory framework is administered by relevant ministries with oversight from the Supreme Council for Planning. Sohar Aluminium, Raysut Cement, OQ, Oman Cables, A’Saffa Foods operate within a licensing regime that has been progressively simplified. The introduction of the Invest Easy portal has reduced business setup time from weeks to days. However, inter-agency coordination remains a bottleneck, with overlapping mandates between sector regulators and cross-cutting bodies like the Environmental Authority and Labour Ministry.
Challenges
Regulatory complexity and enforcement inconsistency remain key concerns. High energy input costs for non-subsidised operations, limited domestic supply chains, skill shortages in advanced manufacturing, competition from Saudi and UAE mega-factories, and reliance on imported raw materials. Additionally, the pace of regulation often lags behind technological and market developments, creating uncertainty for first movers.
Opportunities
Regulatory sandboxes, digital permitting platforms, and outcome-based regulation can unlock growth. Downstream aluminium value addition (extrusions, cables), food processing for regional export, pharmaceutical manufacturing (Oman Pharma), building materials for GCC mega-projects, and defence manufacturing under the IKTIFA programme.
Vision 2040 Targets
Raise manufacturing GDP share to 15 percent; double non-oil exports; create 150,000 new manufacturing jobs; achieve 50 percent Omanisation; establish Oman as a GCC advanced manufacturing hub.