Definition
A free zone is a geographically defined area within a country where goods may be imported, stored, manufactured, and re-exported with minimal customs duties and streamlined regulatory procedures. Free zones typically offer incentives such as tax exemptions, 100 percent foreign ownership, repatriation of profits, and simplified business licensing. They are designed to attract foreign investment, boost exports, create jobs, and promote technology transfer.
Context in Oman
Oman operates several free zones, with the most prominent being the Sohar Free Zone, the Salalah Free Zone, and the Free Zone at the Special Economic Zone at Duqm. Al Mazunah Free Zone near the Yemen border focuses on border trade. Each zone is managed by a dedicated authority and offers tailored incentives depending on the target industry. Benefits commonly include up to 30 years of corporate tax exemption, no customs duties on imports and re-exports, 100 percent foreign ownership, and no minimum capital requirements. The zones focus on attracting industries such as petrochemicals, metals, logistics, food processing, and light manufacturing.
Key Data Points
| Metric | Value |
|---|---|
| Major free zones | Sohar, Salalah, Duqm, Al Mazunah |
| Tax holiday duration | Up to 30 years |
| Foreign ownership permitted | 100 % |
| Customs duties within zone | Exempt |
| Key target industries | Petrochemicals, metals, logistics |
Vision 2040 Connection
Free zones are critical infrastructure for Vision 2040 diversification goals. The strategy aims to expand the capacity and scope of existing zones, attract higher-value manufacturing, and strengthen logistics connectivity between free zones and international shipping routes. Increasing the number of operational companies within free zones is a tracked KPI.
Further Reading
- [[What is a Special Economic Zone]]
- [[What is FDI]]
- [[Oman Company Formation Guide]]