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Executive Summary

Omani Sultan Haitham bin Tarik al Said, who assumed the sultancy in January 2020, has led a whole of government effort to reform Oman’s economy to attract foreign direct investment (FDI).  This effort has built on an overhaul of Oman’s business and investment framework that included, most notably, updates in 2019 to Oman’s Commercial Companies Law, Foreign Capital Investment Law, Privatization Law, Public-Private Partnership Law, and Bankruptcy Law.  Under Sultan Haitham’s leadership, Oman is now 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.  These reforms seek to improve Oman’s investment climate and are in line with Oman’s Vision 2040 development plan.  The success of Oman’s reform effort will depend on Oman’s ability to open up 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.

Oman’s location on the Persian Gulf and the Indian Ocean, at the crossroads of the Arabian Peninsula, East Africa, and South Asia, and in proximity to shipping lanes carrying a significant share of the world’s maritime commercial traffic and access 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. Because of its “friends of all, enemies of none” foreign policy, Oman does not face the external security challenges of its neighbors.  Because of its domestic policy of peaceful coexistence, political instability among its diverse population is practically nonexistent.

Oman has taken numerous recent measures to promote investment.  In August 2020, it created the Public Authority for Special Economic Zones and Free Zones (OPAZ) to oversee and facilitate investment into the Special Economic Zone at Duqm, Almazuna Free Zone, Salalah Free Zone, Sohar Free Zone.  In 2019, it promulgated five laws to promote investment:  the Public-Private Partnership Law; the Foreign Capital Investment Law (FCIL); the Privatization Law; the Bankruptcy Law; and the Commercial Companies Law.  The FCIL, which came into force January 1, 2020, holds particular promise for removing minimum-share capital requirements and limits on the amount of foreign ownership in an Omani company.  Under the U.S.-Oman Free Trade Agreement (FTA), U.S. businesses and investors already have the right to 100 percent ownership.

Oman’s overall financial situation continues to suffer from the COVID-19 pandemic, the collapse of global oil prices, and the resulting oversupply.  The situation has highlighted Oman’s oil dependence, chronic fiscal vulnerabilities, and its inability to significantly diversify its economy.  While the government took steps to curb spending in 2020, revenue losses outpaced expenditure cuts and the deficit ballooned $2 billion beyond projections.  Oman’s wealth will continue to rely on oil and gas revenues, despite diversification efforts.  Overall, Oman is facing worsening financial conditions and rising financial obligations, which could continue to restrict the government’s ability to invest in needed growth to address a worsening employment situation.  Its debt to GDP ratio reached 81 percent by the end of 2020, compared to 60 percent in 2019.

Sultan Haitham has recognized these challenges and is seeking to address them.  In the first year of his reign, he succeeded in cutting at least $4.7 billion from Oman’s bloated government budget and filled his cabinet with technocrats who are united the goal of in righting Oman’s faltering economy, with an emphasis on FDI.  As part of Oman’s government revenue diversification efforts, the government instituted a Value-Added Tax of 5 percent for the majority of purchases of goods and services April 16 and implemented long overdue subsidy reforms January 1; in addition, the Tax Authority is planning a personal income tax on high-income individuals for next year.

The top complaints of businesses often relate to requirements to hire and retain Omani national employees and a heavy-handed application of “Omanization” quotas.  Payment delays to companies 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 contracts and purchases as a move to curb expenditures.

The government also needs to undertake more fundamental reforms for investment such as making its tender system transparent, modifying its labor laws to provide companies with workforce flexibility to address manpower redundancies, increasing access to credit, and speeding up approvals for new businesses to truly open up Oman to foreign investment.

Table 1: Key Metrics and Rankings 
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2020 49 of 179
World Bank’s Doing Business Report 2019 68 of 190
Global Innovation Index 2020 84 of 131
U.S. FDI in partner country ($M USD, stock positions) 2018 USD 1,624
World Bank GNI per capita 2019 USD 14, 110

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct 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) allows 100 percent foreign ownership in most sectors and removed the minimum capital requirement.  The law effectively provides 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.

Limits on Foreign Control and Right to Private Ownership and Establishment

With the implementation of the U.S.-Oman 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.  Since January 1, 2021, 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.   The Ministry of Commerce, Industry, and Investment Promotion (MOCIIP) – until August 2020 known as the Ministry of Commerce and Industry (MOCI) – issued Ministerial Decision 209/2020 on December 8, 2020, updating the list of activities in which foreign investors are prohibited from engaging, from 37 in 2019 to 70.  MOCIIP is applying the new law on a reported case-by-case basis, and it remains uncertain whether
a 100 percent foreign-owned company can now undertake an activity which is not on the negative list.  Under the new FCIL, foreign nationals seeking to own 100 percent shares in local companies no longer are required to seek MOCIIP approval.

Oman bans non-Omani ownership of real estate and land in various governorates and in other areas the government deems necessary to restrict, as per Royal Decree 29/2018.  However, Oman permits the establishment of real estate investment funds (REIFs) in order to encourage new inflows of capital into Oman’s property sector, and foreign investors, as well as expatriates in Oman, may own property units in REIFs.  In January 2020, Oman’s first REIF (Aman) launched an initial private offering valued at $26 million for Omani and non-Omani investors.  In addition, the Ministry of Housing and Urban Planning in October 2020 issued Ministerial Decision 357/2020 extending permissions for non-Omanis to own units in multi-story commercial and residential real estate buildings under the usufruct system in some locations in Muscat governorate.

Other Investment Policy Reviews 

Oman has not undergone any third-party investment policy reviews in the past seven years.  The last WTO Trade Policy Review was in April 2014 (Link to 2014 report:

Business Facilitation

Royal Decree 97/2020 restructured the Ministry of Commerce, Industry, and Investment Promotion (MOCIIP) in August 2020 to assume the functions that the Public Authority for Investment Promotion and Export Development (Ithraa) previously held.  In this role, MOCIIP works toward attracting foreign investors and smoothing the path for business formation and private-sector development.  It works closely with government organizations and businesses in Oman and abroad to provide a comprehensive range of business support.  MOCIIP also offers a comprehensive range of business investor advice geared exclusively to support foreign companies looking to invest in Oman, based on company-specific needs and key target sectors that the country’s diversification program identifies.  Oman’s “Invest in Oman” website ( provides information on Oman as a business location.

MOCIIP has an online business registration site, known as “Invest Easy” (, 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.

Outward Investment 

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

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 the private-sector company has punishable dealings with government bodies and officials.

2)  The Omani Penal Code (promulgated by Royal Decree 7/2018).  In January 2018, the Omani government issued a new penal code that completely replaced Oman’s 1974 penal code.  Minimum sentencing guidelines for public officials guilty of embezzlement increased from three months to three years.  The definition of “public officials” expanded to include 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.  In 2011, the government updated the Tender Law (Royal Decree No. 36/2008) to preclude Tender Board officials from adjudicating projects involving interested relatives to “the second degree of kinship.”

It is not yet clear if Sultan Haitham will prioritize rooting out corruption.  The late Sultan dismissed several ministers and senior government officials for corruption during his reign.  In response to public protests in 2011, a royal decree expanded the powers of the State Audit Institution.

Oman has stiff laws, regulations, and enforcement against corruption, and authorities have pursued several high-profile cases.  In March 2019, local press and social media focused intensely on an embezzlement scandal and the subsequent arrest of employees at the Ministry of Education.  The Courts have signaled that they will not tolerate corruption.  Media in 2020 occasionally reported on instances of economic crimes in the public domain and in February 2021, of a 25 percent increase of cyber crimes in Oman in 2020 over 2019.

In an extra attempt to prevent and eradicate corruption in the Sultanate of Oman, Oman joined the United Nations Convention Against Corruption (the “UNCAC”) in 2013.  Oman is not a party to the OECD Convention on Combating Bribery.

Resources to Report Corruption

State Audit Institution
Phone number: +968 8000 0008

There are no “watchdog” organizations operating in Oman 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 some reported deaths and injuries, property destruction, and the blocking of pedestrian and vehicle access to the Port.  In recent years, high youth unemployment has been the Omani public’s most significant social grievance, and the Omani 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.

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 Sultanate through the third quarter of 2020 was RO 15.6 billion, representing growth of 11.7 percent increase over the same period in 2019.  FDI inflow at the end of the third quarter of 2020 stood at RO 1.644 billion ($4.25 billion).  The United Kingdom remains by far the biggest investor in FDI (RO 7.92 billion – $20.5 billion), followed by the United States (RO 1,847.9 billion – $4.8 billion), UAE (1,267.7 billion – $3.3 billion), Kuwait (RO 933.2 million – $2.4 billion), and China (RO 848.9 million – $2.2 billion).

Major foreign investors that have entered the Omani market within the last five years 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), 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) 2018 $82,200 2018 $79,789
Foreign Direct Investment Host Country Statistical source* USG or international statistical source  USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other 
U.S. FDI in partner country ($M USD, stock positions) 2018 $4,025 2018 2,131 BEA data available at
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A N/A N/A BEA data available at
Total inbound stock of FDI as % host GDP N/A N/A 2018 34.3 UNCTAD data available at

* 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 30,313 100% Total Outward 16,764 100%
United Kingdom 14,703 47% UAE 1,099 N/A%
UAE 2,981 10% Saudi Arabia 288 N/A%
USA 2,333 8% India 205 N/A%
Kuwait 2,162 7% United Kingdom 77 N/A%
China 1,265 4% Kuwait 77 N/A%
“0” reflects amounts rounded to +/- USD 500,000.

*Source for Host Country Data: National Centre for Statistical Analysis, 2019 Q2 (Inward). **2017 Q4 (Outward).  Data on Oman from the IMF’s Coordinated Direct Investment Survey is not available.

Table 4: Sources of Portfolio Investment
Data not available.

Investment Climate Statements
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