Overview
Oman’s investment strategy balances attracting foreign capital with nurturing domestic investment. Both are essential for Vision 2040 targets, but they contribute differently to economic development, technology transfer, and employment creation.
Foreign Direct Investment in Oman
FDI in Oman has grown following reforms including 100 percent foreign ownership rights, streamlined licensing, and special economic zone incentives. Major FDI sources include the UAE, UK, India, Kuwait, and China. FDI is concentrated in energy, manufacturing, and logistics. Foreign investors bring technology, management expertise, and access to international markets. However, FDI can be volatile and may repatriate profits rather than reinvesting locally.
Domestic Investment in Oman
Domestic investment, comprising government capital expenditure and private Omani investment, forms the majority of total investment. Government investment focuses on infrastructure, education, and healthcare. Private domestic investment is led by family-owned conglomerates and a growing SME sector. Domestic investors have deeper local knowledge, longer time horizons, and stronger commitment to community development. However, domestic capital is limited relative to development needs.
Key Differences
FDI brings technology transfer and international market access that domestic investment typically cannot provide. Domestic investment creates stronger local supply chains and retains profits within the economy. FDI responds to global conditions and can be withdrawn, while domestic investment is more stable. Government investment crowds in private investment when directed at infrastructure and enablers.
Verdict / Bottom Line
The optimal strategy combines both sources: FDI for technology-intensive sectors and large-scale projects, and domestic investment for SMEs, services, and community-level development. Oman should use ICV policies to link FDI with domestic supply chains, maximising the spillover benefits from foreign investment.