Overview
Oman’s Foreign Capital Investment Law establishes the legal framework governing foreign investment in the Sultanate, reflecting the country’s commitment to attracting international capital as part of its Vision 2040 economic diversification strategy. The law has undergone significant amendments to liberalise ownership restrictions and enhance investor protections. Foreign investors are now permitted to hold up to 100 percent equity in companies operating across most commercial sectors, eliminating the previous requirement for mandatory local partnership in many activities. The legislation provides guarantees against expropriation, ensures the right to repatriate profits, and establishes a framework for resolving investment disputes. Understanding the provisions, procedures, and practical implications of this law is fundamental for any foreign investor considering Oman.
Key Facts
The Foreign Capital Investment Law was originally enacted by Royal Decree and has been amended to progressively liberalise foreign ownership rules. One hundred percent foreign ownership is permitted in most sectors, subject to a negative list of restricted activities. Minimum capital requirements have been reduced for many activities to lower barriers to entry. The law guarantees equal treatment between foreign and domestic investors in terms of legal protections. Investment incentives including tax holidays, customs duty exemptions, and preferential land allocation are available for qualifying projects. Foreign investors may own or lease commercial real estate necessary for their business operations.
Regulatory Framework
The Ministry of Commerce, Industry, and Investment Promotion is the primary authority responsible for administering the Foreign Capital Investment Law. Applications for foreign investment approval are processed through the Invest Oman portal. Certain activities including military industries, banking, and insurance remain subject to specific regulations and may require joint venture arrangements. Environmental and social impact assessments may be required for major investment projects. The law is supplemented by implementing regulations and ministerial decisions that provide detailed guidance on specific provisions.
Opportunities
The liberalised ownership framework significantly reduces structural barriers for foreign investors. Investment incentive packages are negotiable for large-scale projects in priority sectors aligned with Vision 2040. Bilateral investment treaties between Oman and numerous countries provide additional protections and dispute resolution mechanisms. The government’s proactive approach to investment promotion signals continued regulatory improvement and support for foreign capital. Free zones offer additional layers of incentives beyond those available under the general investment law.
Considerations
Investors should verify the current status of the negative list, as restricted activities are periodically reviewed and updated. While 100 percent ownership is broadly permitted, certain government contracts and tenders may still favour companies with local equity participation. Compliance with Omanisation requirements applies regardless of the foreign ownership structure. Investment incentives are subject to specific conditions and may require performance commitments. Legal counsel with expertise in Omani investment law should be engaged to structure investments and navigate the regulatory landscape.