Oman

Executive Summary 

Oman’s location at the crossroads of the Arabian Peninsula, East Africa, and South Asia and in proximity to larger regional markets is an attractive feature for potential foreign investors. Some of Oman’s most promising development projects and investment opportunities involve its ports and free zones, most notably in Duqm, where the government envisions a 2,000 square-kilometer free trade zone and logistics hub. With a “friends of all, enemies of none” foreign policy, Oman does not face the external security challenges of some of its neighbors. Oman’s domestic political situation remains stable, despite increasing economic pressure and the need to create employment for young Omanis.

Oman’s economy and government finances rely heavily on oil and gas revenue. High energy prices in 2022 are improving Oman’s economic prospects but will not immediately overcome the effects of years of relatively low energy prices, weak economic growth, budget deficits, and the impact of the COVID-19 pandemic. The government announced a medium-term fiscal plan in November 2020 to fix its heavily indebted finances by cutting down on spending and raising revenues, primarily through taxes. Some of the measures negatively affected capital flow, and in an economy dependent on state spending the suspension or cancellation of government projects during Oman’s economic contraction further hit the struggling private sector.

Government leadership recognizes these challenges and is working to improve Oman’s investment climate and to achieve its economic development goals under Oman’s Vision 2040 development plan. Omani Sultan Haitham bin Tarik al Said, who assumed the sultancy in January 2020, has prioritized foreign direct investment (FDI) attraction as an imperative to boost local job creation, particularly as COVID-19-related restrictions have loosened. Toward this end, Oman is in the process of developing further advantages for foreign investors, including a program of tax and fee incentives, permissions to invest in several new industries in the economy, expanded land use, increased access to capital, and labor and employment incentives for qualifying companies. In September 2021, Oman allowed expatriate residents with work visas to own residential units and offered long-term residency visas to attract investors. Five- and 10-year renewable residence visas are available to foreign investors in the tourism, real estate, education, health, information technology, and other key sectors. In March 2022, Oman announced that it would reduce the cost of foreign worker permit fees by up to 85 percent, reversing a hike in the fees it had implemented in June 2021 that some businesses had found problematic.

The success of Oman’s reform efforts will depend on its ability to open key sectors to private sector competition and foreign investment, minimize bureaucratic red tape, pay off its overdue bills, balance its desire for “Omanization” with the realities of training and restructuring its work force, and translate its promises of economic reform into increased FDI flows and job creation. The government also needs to undertake more fundamental reforms for investment such as making its tender system transparent, increasing access to credit, and speeding up approvals for new businesses.

Sultan Haitham and his government are actively courting FDI into many of its sectors. In February 2021, the Ministry of Finance signed three memoranda of understanding with the Saudi Fund for Development to finance several projects amounting to about $244 million. In January 2022, Oman also signed a Sovereign Investment Partnership with the United Kingdom, its largest FDI partner, to facilitate joint investments in both countries.

Sultan Haitham and his government are also seeking to make fuller use of the 2009 U.S.-Oman Free Trade Agreement (FTA), under which U.S. businesses and investors have the right to 100-percent ownership of their companies and can import their products to Oman duty-free. U.S. companies operating in Oman sometimes raise concerns over a lack of clarity and consistency on business license and visa renewal criteria, as well as an increase in associated costs.

The top complaints of businesses relate to requirements for hiring and retaining Omani national employees and a heavy-handed application of “Omanization” quotas. Payment delays to companies that completed work on government infrastructure projects are also a problem across various sectors. Smaller companies without in-country experience or a regional presence face considerable bureaucratic obstacles conducting business here. Beginning in 2020, the government also temporarily ceased the issuance of most new project awards and purchases to curb expenditures.

Companies created under Oman’s new Foreign Capital Investment Law (FCIL), promulgated in 2020, have come under the government’s radar and the Ministry of Commerce, Industry and Investment Promotion (MOCIIP) is re-evaluating investor visas that it issued in 2020. The FCIL removed minimum-share capital requirements and limits on the amount of foreign ownership in an Omani company.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 56 of 179 http://www.transparency.org/research/cpi/overview
Global Innovation Index 2021 76 of 131 https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner country ($M USD, stock positions) 2020 USD 197 https://apps.bea.gov/international/factsheet/ 
World Bank GNI per capita 2019 USD 14, 170 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign Investment 

Oman actively seeks foreign direct investment and is in the process of improving the regulatory framework to encourage such investments.  The Foreign Capital Investment Law (FCIL) allowed 100-percent foreign ownership in most sectors and removed the minimum capital requirement. The law effectively provided all foreign investors with an open market in Oman, privileges already extended to U.S. nationals due to the provisions in the 2009 U.S.-Oman Free Trade Agreement (FTA), although the FTA goes further in providing American companies with national treatment.

The Omani government’s “In-Country Value” (ICV) policy seeks to incentivize companies, both Omani and foreign, to procure local goods and services and provide training to Omani national employees.  The government includes bidders’ demonstration of support for ICV as one factor in government tender awards.  While the government initially applied ICV primarily to oil and gas contracts, the principle is now embedded in government tenders in all sectors, including transportation and tourism.  New-to-market foreign companies, including U.S. firms, may find the bid requirements related to ICV prohibitive.

With the implementation of the FTA in 2009, U.S. firms may establish and fully own a business in Oman without a local partner.  Although U.S. investors are provided national treatment in most sectors, Oman has an exception in the FTA for legal services, limiting U.S. ownership in a legal services firm to no more than 70 percent.  Foreign lawyers may not represent cases in Omani courts at any level. The government also has a “negative list” that restricts foreign investment to safeguard national security interests.  The list includes some services related to radio and television transmission as well as air and internal waterway transportation.   MOCIIP further extended this list to include approximately 70 sectors when the FCIL came into effect.

Since late 2021, the government is employing stringent screening requirements for the issuance and renewals of investor visas, criteria which the government has not made public. U.S. investors raise concerns that these rules are neither consistent nor transparent, and result in a significant increase in renewals costs.

Oman bans non-Omani ownership of real estate and land in various governorates and in some restricted areas.  Non-Omanis can buy property only in designated areas called “Integrated Tourism Complexes” and in certain Ministry of Housing-designated multi-story, commercial and residential real estate buildings in Muscat, subject to eligibilities. Oman permits the establishment of real estate investment funds (REIFs) to encourage new inflows of capital into Oman’s property sector. Foreign investors, as well as expatriates in Oman, may own property units in REIFs.

The World Trade Organization (WTO) conducted a Trade Policy Review of Oman in November 2021. The 2021 report is not yet publicly available. The previous WTO Trade Policy Review was in April 2014 (Link to 2014 report: https://www.wto.org/english/tratop_e/tpr_e/tp395_e.htm .)

The Ministry of Commerce, Industry, and Investment Promotion (MOCIIP) works to attract foreign investors and smooth the path for business formation and private-sector development.  It works closely with government organizations and businesses in Oman and abroad to provide a range of business support.  MOCIIP also offers a range of business investor advice geared to support foreign companies considering investment in Oman, based on company-specific needs and key target sectors that the country’s diversification program identifies. Oman’s “Invest in Oman” website ( https://investinoman.om ) provides information on Oman as a business location.

MOCIIP has an online business registration site, known as “Invest Easy” ( business.gov.om ), through which businesses can obtain a Commercial Registration certificate from MOCIIP. MOCIIP can normally complete most registrations in approximately three or four business days; however, some commercial registration and licensing decisions may require the approval of multiple ministries and could take longer. The “Invest Easy” portal integrates several government agencies into a single portal and serves as a single window for businesses in Oman.

The government neither promotes nor provides incentives for outward investment but does not restrict its citizens from investing abroad.

2. Bilateral Investment Agreements and Taxation Treaties 

Although Oman does not have a bilateral investment treaty (BIT) with the United States, the FTA contains a chapter governing investment.  Oman has 28 BITs, with the following countries:  Algeria, Austria, Belarus, Bulgaria, China, Croatia, Egypt, Finland, France, Germany, Iran, Italy, Japan, Jordan, Republic of Korea, Lebanon, Morocco, Netherlands, Pakistan, Singapore, Sudan, Sweden, Switzerland, Tunisia, Turkey, United Kingdom, Uzbekistan, and Yemen. Oman does not have a bilateral taxation treaty with the United States, but it has signed double taxation treaties with 35 countries. More information can be found on Oman’s Tax Authority’s website: https://tms.taxoman.gov.om/portal/double-tax-agreements .

Oman is a member of the Organization for Economic Cooperation and Development’s (OECD) Inclusive Framework on Base Erosion and Profit Shifting. In October 2021, Oman agreed that certain multinational enterprises (MNEs) will be subject to a minimum 15% tax rate, effective from 2023.

4. Industrial Policies 

Oman offers several incentives to attract foreign investors such as competitive lease rates for certain types of companies established in recognized industrial estates, free zones, and specific locations, but only on a case-by-case basis.  Oman has no personal income tax or capital gains tax. However, some of Oman’s investment incentives, such as for reductions in utility rates, have diminished in recent years.  Most industrial and commercial consumers now pay cost-reflective tariffs for utilities. Oman in recent years has also eliminated many tax exemptions for foreign investors. Oman taxes corporate earnings at 15 percent.

The Public Authority for Special Economic Zones and Free Zones (OPAZ) oversees the Special Economic Zone at Duqm, Almazuna Free Zone, Salalah Free Zone, Sohar Free Zone, and any other special zone or free zone in Oman to complement its port development projects in Duqm, Salalah, and Sohar.  These areas include strategically located ports and are well connected with modern infrastructure and facilities.  An incentive package for investors includes a tax holiday, duty-free treatment of all imports and exports, and tax-free repatriation of profits.  Additional benefits include streamlined business registration, processing of labor and immigration permits, assistance with utility connections, and lower “Omanization” employment quota requirements.  Foreign-owned firms have the same investment opportunities as Omani entities.

Oman’s labor market policy of Omanization includes minimum employment quotas for Omani nationals.  These quota targets vary depending on the sector; they can be as low as 10 percent in the Special Economic Zone at Duqm (SEZAD) and as high as 90 percent in the banking sector.  Most government ministries have achieved Omanization rates at or near 100 percent.

Omanization targets are prevalent throughout the private sector, but the government enforces them inconsistently.  In practice, each company in Oman submits an Omanization plan to the Ministry of Labor (MoL), which has the authority to adjust required Omanization percentages.  In response to the economic fallout from the COVID-19 pandemic, the MoL adopted stronger measures to force companies to increase their employment of Omanis and to retain their Omani employees.

Employers seeking to hire expatriate workers must seek a visa allotment from the MoL and Royal Oman Police (ROP).  The MoL and ROP scrutinize visa allocations, often using opaque criteria.  Foreign investors complain of the difficulty in hiring expatriates to the point that it deters companies from investing or expanding in Oman.  The ROP allows expatriate workers to switch employers upon completion or termination of their employment contracts without the need to obtain a “no-objection” certificate (NOC) from their current employers.

The MoL imposes a six-month ban on visas for expatriates in 87 job categories across 10 private sector industries.  The MoL has extended the dates for this ban several times and periodically adds job categories to the visa ban.

Oman has no requirements for companies to turn over source code or to provide access to surveillance.  However, the Telecommunications Regulatory Authority (TRA) requires service providers to house servers in Oman if they are to provide services in Oman.  The TRA is the lead agency on establishing data quotas in Oman.

5. Protection of Property Rights 

Oman does not recognize or enforce securitized interests in property, both moveable and real. Mortgages and liens exist in the country.  Foreign nationals are generally not able to own real estate in Oman, other than residential property in so-called “integrated tourism complexes” — zoned areas that permit foreign nationals to own property on a freehold basis.  The Ministry of Housing and Urban Planning (MHUP) allows foreign nationals to purchase units in multi-storied commercial and residential buildings under the usufruct system, with limitations. Individuals record their interest in property with the Land Registry at the MHUP.  The legal system, in general, facilitates the acquisition and disposition of property rights.

Certain lands are reserved for tribal use and ownership, but no clear definitions or regulations governing these lands prevail.  These tribes legally own the land, as opposed to the government owning the land, and they therefore control access and any commercial activities on it.

According to the World Bank, it takes 18 days on average to register property in Oman, and the cost of the registration process as a percentage of the property value (six percent) is on par with elsewhere the region.  In 2019, the World Bank ranked Oman 57th in the world for registering property.

Oman has a relatively robust legal and regulatory framework for intellectual property rights (IPR) protection. Oman is not included in the United States Trade Representative (USTR) Special 301 Report or the Notorious Markets List.

U.S. stakeholders have reported difficulty encouraging appropriate agencies, including the Consumer Protection Authority (CPA), the Public Prosecution, Ministry of Commerce, Industry and Investment Promotion (MOCIIP), and the Royal Oman Police, to take IPR enforcement action.  Confusion sometimes exists over which government agencies are responsible for investigating different types of IPR violations.

CPA officials have told U.S. officials that they do not accept responsibility for complaints arising from brand-owners; rather, they only act on consumer complaints.  Ministry of Justice and Legal Affairs officials have also confirmed that the Law of Copyrights and Neighboring Rights (Royal Decree No. 65/2008) stipulates that the MOCIIP shall be responsible for IPR enforcement at the retail level, including for inspections and seizures.

Under its obligations as a signatory to the 2009 U.S.-Oman FTA (FTA), Oman offers IPR protection for copyrights, trademarks, trade secrets, geographical indications, and patents.  FTA-related revisions to IPR protection in Oman are strengthened by Oman’s passage of World Trade Organization-consistent intellectual property laws on copyrights, trademarks, industrial secrets, geographical indications, and integrated circuits.  The FTA’s chapter on IPR can be found at: https://om.usembassy.gov/business/u-s-oman-free-trade-agreement/texts-free-trade-agreement/.

Oman is a member of the World Intellectual Property Organization (WIPO) and is registered as a signatory to the Madrid, Paris, and Bern conventions on trademarks and intellectual property protection.  Oman has signed the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.  Oman is a signatory to the International Convention for the Protection of New Varieties of Plants.

Trademark laws in Oman are compliant with Trade Related Aspects of Intellectual Property Rights (TRIPs).  MOCIIP registers trademarks and notes them in the Official Gazette.  Local law firms can assist companies with the registration of trademarks.  Oman’s copyright protection law extends protection to foreign copyrighted literary, technical, or scientific works; works of the graphic and plastic arts; and sound and video recordings.  In order to receive protection for a foreign-copyrighted work, the rights holder must register the work with the Omani government by depositing a copy of it with the government and paying a fee.  Trademarks are valid for 10 years while patents are generally protected for 20 years.  Literary works, software and audiovisual content receive protection for 50 years.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at:  https://www.wipo.int/directory/en/details.jsp?country_code=OM .

Ministry of Commerce and Industry – National Intellectual Property Office

Eng. Khalid Al Hinai
Director of the National Intellectual Property Office
Tel: +968 2482 8126
Email: khdhinai@moci.gov.om 

Oman Chamber of Commerce & Industry
Dr. Al Fadhil bin Abbas al-Hinai, CEO
Tel: +968-2479- 9146
Fax: +968-2479-1713
E-mail: salehm@chamberoman.om
Web: www.chamberoman.om 

U.S. Patent & Trademark Office
Regional IP Attaché
Pete C. Mehravari, Intellectual Property Attaché for the Middle East & North Africa
U.S. Embassy Abu Dhabi
U.S. Department of Commerce
Tel: +965 2259 1455
E-mail: Peter.mehravari@trade.gov
Web: https://www.uspto.gov/learning-and-resources/ip-policy/intellectual-property-rights-ipr-attach-program/intellectual 

United States Trade Representative
IPR Director for the GCC
Jacob Ewerdt
Tel: +1 (202) 395-9564
E-mail: Jacob.P.Ewerdt@ustr.eop.gov
Web: http://www.ustr.gov 

U.S. Department of Commerce – International Trade Administration
International Trade Specialist
Drew Pederson
Tel: +1-202-482-0879
E-Mail: Drew.Pederson@trade.gov
Web: http://www.trade.gov

6. Financial Sector 

Oman has no restrictions on the flow of capital and the repatriation of profits.  Foreigners may invest in the Muscat Stock Exchange so long as they do so through an authorized broker.  Access to Oman’s limited commercial credit and project financing resources is open to Omani firms with foreign participation.  As of 2022, the market does not have sufficient liquidity to allow for the entry and exit of sizeable amounts of capital.  According to the 2020 annual report on exchange arrangements and exchange restrictions of the International Monetary Fund, Article VIII practices are reflected in Oman’s exchange system.

The Commercial Companies Law requires the listing of joint stock companies with capital in excess of $5.2 million.  The law also requires companies to exist for two years before their owners can float them for public trading.  Publicly traded firms in Oman are still a relatively rare phenomenon; most businesses are private family enterprises.

The banking system is sound and well capitalized with low levels of non-performing loans and generally high profits.  Oman’s banking sector consists of 16 licensed local and foreign commercial banks, two specialized banks and eight Islamic commercial banks.  Bank Muscat, the largest domestic bank operating in Oman, has $32.7 billion in assets.  The Central Bank of Oman (CBO) is responsible for maintaining the internal and external value of the national currency.  It is also the single integrated regulator of Oman’s financial services industry.  The CBO issues regulations and guidance to all banks operating within Oman’s borders.  Foreign businesspeople must have a residence visa or an Omani commercial registration to open a local bank account.  Oman imposes no restrictions for foreign banks to establish operations in the country so long as they comply with CBO instructions.

The Oman Investment Authority (OIA) is Oman’s principal Sovereign Wealth Fund. OIA is a full member of the International Forum of Sovereign Wealth Funds and follows the Santiago Principles.  Omani law does not require sovereign wealth funds to publish an annual report or submit their books for an independent audit.

The OIA focuses on two main investment categories: tradable public markets assets that include global equity, fixed income bonds and short-term assets; and non-tradable private markets assets, which include private investments in real estate, logistics, services, commercial, and industrial projects.

7. State-Owned Enterprises 

State-owned enterprises (SOEs) are active in many sectors in Oman, including oil and gas extraction, oil and gas services, oil refining, liquefied natural gas processing and export, manufacturing, telecommunications, aviation, infrastructure development, and finance.  The government does not have a standard definition of an SOE but tends to limit its working definition to companies wholly owned by the government and more frequently refers to companies with partial government ownership as joint ventures.  Almost all SOEs in Oman fall under the Oman Investment Authority (OIA). The government does not publish a complete list of companies in which it owns a stake.

In theory, the government permits private enterprises to compete with public enterprises under the same terms and conditions with access to markets, and other business operations, such as licenses and supplies, except in sectors deemed sensitive by the Omani government such as mining and telecommunications. SOEs purchase raw materials, goods, and services from private domestic and foreign enterprises.  Public enterprises, however, have comparatively better access to credit.  Board membership of SOEs is traditionally composed of various government officials, with a cabinet-level senior official usually serving as chairperson.  Especially since the government reorganization began in August 2020, the government is making efforts to include private-sector officials on SOE boards.

OIA has made efforts to enhance the efficiency and governance of SOEs, including by publishing audited financial statements, assessing each entity’s business strategy and public policy considerations, and mitigating financial exposures. OIA is developing a code of governance for SOEs. It restructured several companies under its supervision and formed new boards of directors drawing from both the public and private sectors. SOEs receive operating budgets, but, like budgets for ministries and other government entities, the budgets are flexible and not subject to hard constraints.  The information that the Omani government published about its 2022 budget did not include allocations to and earnings from most SOEs.

The Omani government has indicated that it hopes to reduce its budget deficits by privatizing or partially privatizing some state-owned enterprises.  Although the plan for privatization is not publicly available, the Omani government has already reorganized some of its holdings for public offerings.  In March 2020, for example, State Grid Corporation of China acquired a 49-percent stake in the Oman Electricity Transmission Company from Nama Holding, a government-owned holding company for five electricity transmission and distribution companies. The government’s divestment of a portion of its ownership in telecommunications firm Omantel is also an example of a partial privatization.  In this case, the government in 2014 offered 19 percent of Omantel’s ownership as stock on the Muscat Stock Exchange, but only to Omani investors. The government today owns a 51-percent share of Omantel, according to the company’s website.

The government allows foreign investors to participate fully in some privatization programs, including in drafting public-private partnership frameworks. In December 2021, the Ministry of Finance, which has the mandate to procure projects and services via the Public–Private Partnership (PPP) route, initiated the bidding process for its first PPP infrastructure project under the Law of Partnership between Public and Private Sectors (the PPP Law).

8. Responsible Business Conduct 

Corporate social responsibility (CSR) is becoming increasingly prevalent among local and foreign companies operating in Oman, and several companies have dedicated CSR departments and programs. While CSR programs may differ, they invariably seek to engender goodwill in the communities they serve and to provide a social benefit.  Examples include competitions in elementary and secondary schools for academic performance and artistic skill; sponsorship of charitable, academic, and social events; training programs; entrepreneurship incubators; and the organization of women’s or tribal empowerment events.

The press covers consumer rights violations, mostly the sale of expired food or counterfeit medicine or car parts.  A general culture of accountability is prevalent, as is a sense that companies who violate CSR tenets will suffer in business and market share.

No independent consumer organizations that promote CSR exist. However, many business associations, including the Oman American Business Center (the local U.S. Chamber of Commerce affiliate), pursue CSR initiatives as a part of their annual activities.  Companies generally follow CSR guidelines set forth by the Organization for Economic Cooperation and Development. Oman’s Council of Ministers directs state-owned companies to allocate a portion of their CSR budgets to support training programs and the employment of Omani citizens. Additionally, each government ministry has a department dedicated to facilitating CSR compliance and initiatives.  The government has not waived regulations promoting CSR to attract foreign investment. In December 2021, MOCIIP issued a mandate instructing private companies to allocate 20 percent of their CSR budgets to the state-funded charitable organization, the Oman Charitable Association.

Department of State

Department of the Treasury

Department of Labor

Oman does not have a “net zero” greenhouse gas emissions goal. Oman in 2019 adopted a National Strategy for Adaptation and Mitigation to Climate Change: 2020-2040. Oman has also included environmental indicators, such as the Environmental Performance Index, in its Vision 2040. Oman joined the UN Convention on Biological Diversity in 1994 and maintains and regularly updates a National Biodiversity Strategy and Action Plan.

In July 2021, Oman submitted its second nationally determined contribution to the Paris Agreement on climate change (NDC). In the NDC, Oman targets a seven-percent reduction of greenhouse gas emissions below projected levels by 2030. Oman’s second NDC does not explicitly reference private sector contributions, although some actions, such as reducing gas flaring and increasing renewable energy generation capacity, will fall on state-owned and private enterprise.

Oman’s public procurement policies do not factor in any environmental considerations. Investment projects with the potential to cause pollution must conduct an environmental impact assessment and obtain a permit from the Environment Authority. Oman has several laws regulating pollution, including Ministerial Decree 41/2017 for air quality and Royal Decree 34/74 on marine pollution.

9. Corruption 

U.S. businesses do not generally identify corruption as one of the top concerns of operating in Oman.

The Sultanate has the following legislation in place to address corruption in the public and private sectors:

1) The Law for the Protection of Public Funds and Avoidance of Conflicts of Interest (the “Anti-Corruption Law” promulgated by Royal Decree 112/2011). The law predominantly concerns employees working within the public sector.  It is also applicable to private-sector companies if the government holds at least a 40-percent share in the company, or in situations where a private-sector company engages in punishable offenses with government bodies or officials.

2) Minimum sentencing guidelines for public officials guilty of embezzlement are three years, per the Omani Penal Code.  The definition of “public officials” includes officers of parastatal corporations in which the Omani government has at least a 40-percent controlling interest.  The new penal code may make Oman seem more investment friendly, by virtue of modern references to corporations as legal entities, as an example.  However, its language on money laundering remains ambiguous and descriptions of licit and illicit banking are unclear, potentially contributing to confusion about investment regulations.

A lack of domestic whistleblower-protection legislation in Oman has resulted in the private sector taking the lead in enacting internal anti-bribery and whistleblowing programs.  Omani and international companies doing business in Oman that plan to implement anti-corruption measures will likely find it difficult to do so without also putting in place an effective whistleblower-protection program and a culture of zero tolerance.

Ministers are not allowed to hold offices in public shareholding companies or serve as the chairperson of a closely held company.  However, many influential figures in government maintain private business interests and some are also involved in public-private partnerships.  These activities either create or have the potential to create conflicts of interest.  Oman’s Tender Law precludes Tender Board officials from adjudicating projects involving interested relatives to “the second degree of kinship.”

Oman has stiff laws, regulations, and enforcement against corruption, and authorities have pursued several high-profile cases.  The Courts have signaled that they will not tolerate corruption.  In its annual report released in February 2021, the State Audit Institution (SAI) reported that, pursuant to its annual audit of government departments, Oman’s Public Prosecution sentenced several government employees to imprisonment, fines, dismissal from jobs and permanent bans on holding further public jobs due to charges of bribery. SAI reported 2,767 cases of administrative and financial irregularities in 2020, a 51-percent increase over 2019.

Oman joined the United Nations Convention Against Corruption (the “UNCAC”) in 2013.  Oman is not a party to the OECD Convention on Combating Bribery.

State Audit Institution
https://www.sai.gov.om/en/contactus.aspx
Phone number: +968 8000 0008

Oman has no “watchdog” organizations that monitor corruption.

10. Political and Security Environment 

Oman is stable, and politically motivated violence is rare. Oman’s first head of state transition since 1970 occurred on January 11, 2020, with the peaceful rise to power of Sultan Haitham bin Tarik, in accordance with Oman’s Basic Law of the State. Omani law provides for limited freedom of assembly, and the government allows some peaceful demonstrations to occur. Oman experienced Arab Spring-related demonstrations in 2011. These were far smaller than in other Arab countries, although demonstrations in the northwestern Omani city of Sohar resulted in casualties, property destruction, and the blocking of pedestrian and vehicle access to the city’s port. In recent years, high youth unemployment has been among the Omani government’s most significant concerns, and the government prioritizes providing employment opportunities for Omani nationals. On regional security, Oman is committed to securing its border with Yemen, ensuring that Yemen’s instability does not affect Oman, countering illicit trade and terrorist travel, and supporting freedom of navigation through its strategic territorial waters in the Strait of Hormuz.

11. Labor Policies and Practices 

Oman’s labor market is a significant factor for foreign business and investors to consider. Sultan Haitham made clear in his first royal decrees and nationally televised speeches that addressing unemployment among Omani nationals would be a top priority.

Unemployment figures in Oman vary, but the most severely impacted demographic is young men and women.  No statistics about employment in the informal economy are available, but this sector is primarily limited to agriculture and fishing in rural areas.

Omani national private sector employees often work in administrative or managerial roles carved out for them through Omanization.  Most drivers and secretaries are required to be Omanis across all sectors.  In general, a surplus of workers exists in desirable fields, such as information technology and engineering.  A shortage of workers prevails in labor-intensive sectors, particularly construction, due to Omanization laws curbing the number of foreign workers who can be brought in to fill these roles.  Foreign workers play a significant role in the Omani economy. Indians and Bangladeshis alone constitute approximately half of the workforce.

Omani citizens enjoy a high degree of protection, making labor dispute resolution very difficult and lengthy.  Both the Ministry of Labor (MoL) and the courts have broad powers to reinstate Omani national employees or mandate a severance package that provides pay for several months or, in some cases, several years.  Foreign workers may also appeal termination to the MoL but they have less legal protection than Omani nationals.

While unions are allowed to operate in the private sector, they are not very influential and do not engage in collective bargaining.  Most unions only exist to ensure that employers provide government-mandated benefits to employees, such as required annual raises.  Workers generally direct appeals for wage increases to the government.  During the Arab Spring protests in 2011, the government passed a law increasing worker benefits.

In May 2021, unemployed young Omanis protested in front of MoL offices in numerous cities, though not in Muscat, over job layoffs and unemployment. The largest was in the port city of Sohar, where Omani security forces dispersed protesters with tear gas and arrests. The demonstrations were the first significant protests under Sultan Haitham. Several small-scale protests over the lack of jobs, inadequate unemployment benefits, and recruitment policies have occurred outside MoL headquarters in Muscat and Salalah in past years.  The Omani government takes public concern about unemployment very seriously.

Oman is a member of the International Labor Organization (ILO).  Oman has ratified four of the eight core ILO standards, including those on forced labor, abolition of forced labor, minimum working age, and the worst forms of child labor.  Oman has not ratified conventions related to freedom of association, collective bargaining, equal remuneration, or the conventions related to the elimination of discrimination with respect to employment and occupation.

The issue of forced labor remains a problem in Oman, but the government continues to demonstrate increasing efforts to combat trafficking in persons.  Expatriate workers can switch employers upon completion or termination of their employment contracts without the need to obtain a “no-objection” certificate (NOC) from their current employers. Government guidelines in place since 2020 bolster Omani nationals’ employment and authorize the termination of expatriate laborers in response to the economic slowdown.  Oman’s new labor law, initially expected to be issued in April 2021, is delayed. Government officials have not shared publicly the contents of any proposed draft.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics  

According to the Oman’s National Centre for Statistics and Information (NCSI) — the only host-country source of foreign direct investment (FDI) data — total FDI in the Sultanate through the third quarter of 2021 was RO 16.43 billion, representing a 5.6-percent increase over the same period in 2020. FDI inflow at the end of the third quarter of 2020 stood at RO 0.88 billion ($2.29 billion). The United Kingdom remains by far the biggest investor in FDI (RO 8.3 billion – $21.6 billion), followed by the United States (RO 2 billion – $5.2 billion), UAE (1.2 billion – $3 billion), Kuwait (RO 914 million – $2.4 billion), and China (RO 773.4 million – $2 billion).

Major foreign investors that have entered the Omani market that include SV Pittie Textiles (India), Moon Iron & Steel Company (India), Sebacic Oman (India), BP (UK), Sembcorp (Singapore), Daewoo (Korea), LG (Korea), Veolia (France), Huawei (China), SinoHydro (China), DEME (Belgium), ACME Group (India), Equinix (United States), Oracle (United States), and Vale (Brazil).

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2020 $73,886 2020 $64,648 www.worldbank.org/en/country
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2021 N/A 2020 197 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A 2020 -18 BEA data available at https://www.bea.gov/international/direct-investment-and-multinational-enterprises-comprehensive-data
Total inbound stock of FDI as % host GDP N/A N/A 2020 56.1 UNCTAD data available at

https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Country-Fact-Sheets.aspx  

* Source for Host Country Data: National Centre for Statistics and Information (NCSI). 

Table 3: Sources and Destination of FDI 
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment* Outward Direct Investment**
Total Inward 42,739 100% Total Outward 16,764 100%
United Kingdom 21,662 51% UAE 1,099 N/A%
USA 5,247 12% Saudi Arabia 288 N/A%
UAE 3,087 7% India 205 N/A%
Kuwait 2,2,378 6% United Kingdom 77 N/A%
China 2,011 5% Kuwait 77 N/A%
“0” reflects amounts rounded to +/- USD 500,000.

*Source for Host Country Data: National Centre for Statistical Analysis, 2021 Q3 (Inward). **2017 Q4 (Outward).  Data on Oman from the IMF’s Coordinated Direct Investment Survey is not available.

14. Contact for More Information 

Economic & Commercial Officer
U.S. Embassy, P.O. Box 202, Postal Code 115, MSQ, Muscat, Sultanate of Oman
+968-2464-3623, muscatcommercial@state.gov 

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