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Executive Summary

Overall, Oman’s investment climate is conducive to U.S. investment, despite presenting significant challenges, particularly to smaller, less-established investors. Omani officials and businesspeople generally value U.S. technology, skills, and expertise in a wide range of fields. They count on U.S. firms’ reputation for reliable, transparent business practices, and they admire U.S. business models, corporate values, and entrepreneurial culture. They are keen to take fuller advantage of the United States-Oman Free Trade Agreement (FTA), which was implemented in 2009. Obstacles to investing in Oman persist, however, including a difficult labor market, a slow and cumbersome governmental bureaucracy, restrictions on ownership of real estate, physical distance from the United States, and an economy overly dependent on oil revenues. A key issue to watch is whether political pressure stemming from unemployment exacerbates challenges in the labor market — in particular, an increasingly restrictive immigration policy and onerous requirements to hire and retain Omanis. Long-awaited foreign capital investment and labor laws may provide greater incentives and clarity, but uncertainty remains as to when the legislation will be enacted.

Advantages of investing in Oman include:

  • Nearly ten years under a FTA, which includes duty exemptions and the right to wholly own a business without an Omani co-investor;
  • A one-stop-shop at the Ministry of Commerce and Industry for business registration;
  • The excellent quality of life: Oman is a modern, friendly, and scenic country, with outstanding international schools, widely-available consumer goods, modern infrastructure, an educated and largely bilingual Omani work force, and a convenient and growing transportation network;
  • Oman’s geographic location, just outside the Arabian Gulf and the Strait of Hormuz, along busy shipping lanes carrying a significant share of the world’s maritime commercial traffic, with convenient access and connections to the Gulf, Africa, and South Asia;
  • The steady and ambitious investment by the Government of Oman (GoO) in the country’s infrastructure, including manufacturing free zones, seaports, airports, rail, and roads, as well as in its health care and educational systems and facilities.

Challenges to investing in Oman include:

  • Omanization mandates, which compel companies to hire and retain Omani employees;
  • Restrictions on foreigners for real estate ownership and minimum capital requirements for investments;
  • Burdensome bureaucratic procedures that are too often characterized by slowness and inefficiency, in addition to a quasi-legislative process that obscures proposed laws, rules and regulations governing business and investment issues;
  • Oman’s physical distance from the U.S., remoteness in the region that inhibits accessibility, and insufficient or ineffective marketing contributes to an overall lack of awareness about the country to a U.S. investor audience;
  • Economic diversification efforts have been lackluster and have not driven real economic growth. The economy remains overly dependent on oil revenue, and there is a sense of complacency with the recent recovery of oil prices.

Table 1

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2017 68 of 180
World Bank’s “Doing Business” 2017 71 of 190
Global Innovation Index 2017 77 of 127
U.S. FDI in partner country ($M USD, stock positions) 2016 USD 32
World Bank GNI per capita 2015 USD 18,080

Policies Toward Foreign Direct Investment

“In-Country Value” (ICV) is the GoO’s policy effort to incentivize companies, both Omani and foreign, to invest in Oman through their procurement of local goods and services and training of Omanis. The GoO includes bidders’ demonstration of support for ICV as one factor in government tender awards. While ICV was first conceived primarily for oil and gas contracts, the principle is now embedded in government tenders in all sectors, including transportation and tourism. The original policy included a number of factors to determine a project’s ICV rating including capital investment, local training, local supplier development, and investment in local institutions. This GoO policy aims to increase economic diversification and local capacity building in the long run, but 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 United States-Oman FTA on January 1, 2009, U.S. firms may establish and fully own a business in Oman without a local partner. In contrast, non-American service providers must be at least 30 percent (and in most cases at least 51 percent) owned by an Omani who is currently practicing in the specialized field with a relevant degree before the Ministry of Commerce and Industry (MOCI) will approve a license. 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.

A new foreign capital investment law would allow 100 percent foreign ownership and remove the minimum capital requirement to provide foreign investors with an open market in Oman — privileges already extended to U.S. nationals due to the provisions of the FTA. There is uncertainty, however, as to when the law may be enacted.

Other Investment Policy Reviews

Oman has not undergone any third-party investment policy reviews in the past three years. The last WTO Trade Policy Review was in April 2014, before the drop in global oil prices. (Link to 2014 report: ).

Business Facilitation

Although the Ministry of Commerce and Industry has established a “One-Stop Shop” ( ) for government clearances, the approval process for establishing a business can be slow, particularly with obtaining expatriate worker visas.

The GoO has tasked the Public Authority for Investment Promotion and Export Development (Ithraa), with attracting foreign investors and smoothing the path for business formation and private sector development. Ithraa works closely with government organizations and businesses based in Oman and internationally to provide a comprehensive range of business support. Ithraa also offers a comprehensive range of business investor advice geared exclusively to support international companies looking to invest in Oman, and this service is based on company-specific needs.

Outward Investment

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

Oman is a member of the Gulf Cooperation Council (GCC), but there has been no movement towards negotiating trade agreements as a group rather than as individual nations.

Although Oman does not have a bilateral investment treaty (BIT) with the United States, there is a chapter governing investment in the FTA. Oman has 26 BITs with the following countries: Algeria, Austria, Belarus, China, Croatia, Egypt, Finland, France, Germany, India, Iran, Italy, 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. It has signed double taxation treaties with 34 countries.

Transparency of the Regulatory System

The legal, regulatory, and accounting systems in Oman remain less than fully transparent and new policies are often ambiguous. Commercial registration and licensing decisions often require the approval of multiple ministries. Although a new law expanded the policy review function of the Majlis Oman, or Council of Oman (Oman’s quasi-parliamentary body), its powers remain limited. Omani NGOs and private sector associations do not play a role in the regulatory environment.

The Ministry of Legal Affairs prepares and revises draft laws, drafts royal decrees, and negotiates international agreements and contracts in which the GoO is one of the involved parties. It also gives legal opinions and advice on matters put before it by other ministries and government departments. Its website contains copies of royal decrees and some ministerial decisions, mostly in Arabic, but some have English translations.

International Regulatory Considerations

As a member of the GCC, Oman largely follows its regional regulatory system. In December 2013, GCC Member States issued regulations on the GCC Regional Conformity Assessment Scheme and GCC “G” Mark in an effort to “unify conformity marking and facilitate the control process of the common market for the GCC members, and to clarify requirements of manufacturers.” U.S. and GCC officials continue to discuss concerns about consistency of interpretation and implementation of these regulations across all six GCC Member States, as well as the relationship between national conformity assessment requirements and the GCC regulations, with a view to avoiding inconsistencies or unnecessary duplication.

As Oman is a member of the WTO, it is committed to update the WTO Committee on any Technical Barriers to Trade (TBT). Oman’s Trade Facilitation Agreement (TFA) with the WTO entered into force on February 22, 2017.

Legal System and Judicial Independence

Oman’s legal system is code-based, but incorporates elements from a variety of legal traditions, most notably modern English and French law as well as Islamic law in the Ibadhi interpretation. Despite its reliance on English law as a model for some legislation, however, Oman should not be considered a “common-law” jurisdiction, as there is no reliance on judicial precedent as a source of law.

Business disputes within Oman are resolved through the Commercial Court. The Commercial Court has jurisdiction over most tax and labor cases, and can issue orders of enforcement of decisions. The Commercial Court can accept cases against governmental bodies, but can only issue, and not enforce, rulings against the government. The Commercial Court replaced the Authority for Settlement of Commercial Disputes.

Laws and Regulations on Foreign Direct Investment

The Foreign Capital Investment Law (Royal Decree No. 102/94) provides the legal framework for non-U.S. and non-GCC foreign investors. Oman amended this law in 2000 as part of its WTO accession and in 2009 to implement the United States-Oman FTA. The Council of Oman has held hearings and readings for a new foreign capital investment law that would remove the minimum Omani ownership requirement for all investors. U.S. investors are not currently subject to that restriction, due to the FTA. It will only become effective after all due legal and governmental processes are completed.

Competition and Anti-Trust Laws

Investments are not screened for competition considerations, and Oman does not have an active competition commission. The Competition and Anti-Monopoly Law, promulgated in December 2014, aims to combat monopolistic practices by prohibiting anti-competitive agreements and price manipulation, and includes a reporting requirement for any activity, such as mergers and acquisitions, which results in a dominant market position for one firm.

Expropriation and Compensation

Oman’s interest in increased foreign investment and technology transfer make expropriation or nationalization unlikely. In the event that a property is nationalized, Article 11 of the Basic Law of the State stipulates that the Government of Oman must provide prompt and fair compensation. There are no recent examples of expropriation or nationalization.

Dispute Settlement

ICSID Convention and New York Convention

Oman is a party to the International Convention for the Settlement of Investment Disputes between States and Nationals of other States (ICSID) and the United Nations New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

Investor-State Dispute Settlement

Oman has a modern arbitration law which is largely based on the United Nations Commission on International Trade Law (UNCITRAL) model. Pursuant to its arbitration law, an arbitration agreement must be in writing, and it can be in one or more instruments. The parties are free to choose any law relating to the arbitration agreement and, in the absence of an explicit law, the courts are given the power to determine it.

Additionally, there are specific dispute resolution mechanisms through the FTA that can assist Omani and U.S. companies in resolving disputes outside of the Omani legal system.

International Commercial Arbitration and Foreign Courts

Many corporate entities in Oman are increasingly turning to arbitration to resolve their disputes, as arbitration is considered to be a more efficient and reliable mechanism. An arbitral award is usually rendered in Oman within 12 months of the aggrieved party stating in writing that a dispute has arisen. In contrast, court processes can often be much lengthier, particularly where technically complex issues are involved. The fact that cases normally go through three tiers of justice (Primary, Appeal, and Supreme) also naturally means a longer process.

The Omani Arbitration Law (Royal Decree 47/97 as amended) defines the term “arbitration” as a dispute resolution mechanism agreed to by parties of their own volition. Usually, the parties will state in their initial contract that any dispute will be resolved by arbitration pursuant to, for instance, the Omani Arbitration Law. The Law mandates that an arbitration agreement should be in writing. It is also permissible for parties to agree in writing, once a dispute has arisen, that it will be resolved by arbitration. In such cases, however, the agreement has to specify the underlying issues that the parties have agreed to resolve by arbitration.

Binding international arbitration of investment disputes between foreign investors and the Omani government is recognized, though the government is increasingly challenging rulings in favor of foreign companies in payment collection cases. Oman’s legal framework provides for the enforcement of international arbitration awards and most foreign companies elect for dispute resolution by arbitration. Arbitration is generally cheaper, quicker, and easier than settling commercial disputes in the normal court system, where judges often lack expertise on technical commercial issues.

Bankruptcy Regulations

Oman has written and consistently applied commercial and bankruptcy laws. However, insolvency laws currently allow only for complete dissolution rather than restructuring, and many businesses opt to simply shut their doors rather than go through the insolvency process. The focus of Omani laws is on protecting creditors as much as possible and ensuring the insolvent company is liquidated efficiently. Private credit bureaus first opened in 2009 to enable banks to make more informed lending decisions, thus providing advantages to both consumers and financial institutions.

According to the World Bank, it takes on average four years to resolve bankruptcy filings, and the cost of resolving bankruptcy as a percentage of the estate (3.5 percent) is lower in Oman than elsewhere the region. In 2017, the World Bank ranked Oman fourth out of the nineteen countries in the region in resolving insolvency, and 98th in the world.

Investment Incentives

Oman offers several incentives to attract foreign investors, though some of these incentives have been reduced in recent years. Most industrial and commercial consumers now pay cost-reflective tariffs for utilities, and many tax exemptions for foreign investors were eliminated as part of Oman’s overhaul of its corporate tax law in 2017. However, Ithraa (Oman’s investment promotion authority) still identifies an array of incentives used to encourage investment attraction, such as land at competitive lease rates in specific locations, and a competitive tax regime. Oman taxes corporate earnings at 15 percent and has no personal income or capital gains tax. Additional incentives may be offered for certain types of companies established in recognized industrial estates or free zones. Other incentives may be offered by the government on a case-by-case basis.

Foreign Trade Zones/Free Ports/Trade Facilitation

The government has established free-trade zones 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 requirements. Foreign-owned firms have the same investment opportunities as Omani entities.

Performance and Data Localization Requirements

Since 1988, the GoO has had a labor market policy of Omanization — employment quotas for Omani nationals. These quota targets vary depending on the sector — they can be as low as 15 percent in some and 60 percent in others. Most government ministries have achieved Omanization rates at or near 100 percent.

Omanization targets are prevalent throughout the private sector but are enforced inconsistently. In practice, each company in Oman is required to submit an Omanization plan to the Ministry of Manpower (MoM), which has the authority to reduce the requirements for some businesses and to adjust required Omanization percentages accordingly. Towards the end of 2017, the MoM adopted more heavy-handed tactics to force companies to increase their employment of Omanis.

Employers seeking to hire expatriate workers must seek a visa allotment from the MoM and Royal Oman Police. Specific visas allocations are scrutinized using sometimes opaque criteria. Foreign investors complain of the difficulty in hiring expatriates to the point that it frustrates or deters companies from investing in Oman. Additionally, expatriate workers in Oman are required to leave Oman and remain outside the country for two years between changing employers (unless the initial employer agrees otherwise). Persons may seek exemption of this rule from the Royal Oman Police on a case-by-case basis. On January 24, 2018, the MoM issued a decree that imposed a six-month ban on visas for expatriates in 87 job categories across 10 private sector industries. MoM officials have commented in the press that the ban could be extended if Omanization targets are not achieved.

Currently, Oman does not have any 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.

Real Property

Securitized interests in property, both moveable and real, are recognized and enforced in Oman, with mortgages and liens also existing in the country. Foreign nationals are generally not able to own real estate in Oman, other than residential property located in a few designated Integrated Tourism Complexes. Individuals record their interest in property with the Land Registry at the Ministry of Housing. The legal system, in general, facilitates the acquisition and disposition of property rights.

There are lands reserved for tribal use and ownership, but there are no clear definitions or regulations. These tribes legally own the land, as opposed to the government owning the land, and therefore control access and any commercial activities.

Intellectual Property Rights

While intellectual property right (IPR) legislation and regulations are strong, U.S. stakeholders have experienced difficulty getting appropriate agencies, including the Public Authority for Consumer Protection, the Public Prosecution, the Ministry of Commerce and Industry, and the Royal Oman Police, to take enforcement action. Adding to the lack of efficiency in IPR enforcement is the continued confusion as to which government agencies are responsible for investigating different types of IPR violations.

Public Authority for Consumer Protection officials have confirmed that they do not accept responsibility for complaints arising from brand-owners; they only take action on consumers’ complaints. The Ministry of Legal Affairs also confirmed the 2008 Copyright Law stipulates that the MOCI shall be responsible for IPR enforcement at the retail level, including inspections and seizures.

After revising its intellectual property and copyright laws to comply with its FTA obligations, Oman now offers increased IPR protection for copyrights, trademarks, trade secrets, geographical indications, and patents. FTA-related revisions to IPR protection in Oman build upon the existing intellectual property rights regime, already strengthened by the passage of WTO-consistent intellectual property laws on copyrights, trademarks, industrial secrets, geographical indications and integrated circuits. The FTA’s chapter on IPR can be found at:

Oman is a member of the World Intellectual Property Organization (WIPO) and is registered as a signatory to the Madrid, Paris, and Berne conventions on trademarks and intellectual property protection. Oman has also signed the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty. Oman is also a signatory to the International Convention for the Protection of New Varieties of Plants. In 2017, Oman was not listed in the United States Trade Representative’s (USTR’s) Special 301 report, nor is it designated as a notorious market.

Trademark laws in Oman are Trade Related Aspects of Intellectual Property Rights (TRIPs) compliant. Trademarks must be registered and noted in the Official Gazette through the Ministry of Commerce and Industry. 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, a foreign-copyrighted work must be registered with the Omani government by depositing a copy of the work with the government and paying a fee. Trademarks are valid for ten years while patents are generally protected for twenty years. As literary works, software and audiovisual content is protected for fifty years.

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at .

Resources for Rights Holders

Ministry of Commerce and Industry– Department of IPR Enforcement
Director of Intellectual Property
Ahmed Al-Saidi
Tel: +968- 9942-1551
Fax: +968-2481-2030

Ministry of Commerce and Industry – Directorate of Commerce
Director General of Commerce
Khamis Al-Farsi
Tel: +968-2482-8100/115
Fax: +968-2481-2030
E-mail: ;

Oman Chamber of Commerce & Industry
Director General
Abdul Adheem Al-Bahrani
Tel: +968-2476-3723
Fax: +96-2479-1713

Arabian Anti-Piracy Alliance
Office 401, City Tower 2,
Sheikh Zayed Road,
P.O. Box 52194, Dubai
United Arab Emirates
Chief Executive Officer
Scott Butler
Tel: +9714 33 22 114

U.S. Patent & Trademark Office
Regional IP Attaché
Pete C. Mehravari Intellectual Property Attaché for the Middle East & North Africa
U.S. Embassy Kuwait City, Kuwait
U.S. Department of Commerce Foreign Commercial Service, U.S. Patent & Trademark Office
Tel: +965 2259 1455

United States Trade Representative
IPR Director for the GCC
Sung Chang
Tel: +1 (202) 395-9564

U.S. Department of Commerce – International Trade Administration
IPR Lawyer
Kevin Reichelt
Tel: +1-202-482-0879

Capital Markets and Portfolio Investment

There are no restrictions in Oman on the flow of capital and the repatriation of profits. Foreigners may invest in the Muscat Securities Market (MSM) 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. At this time, there is not sufficient liquidity in the market to allow for the entry and exit of sizeable amounts of capital. Joint stock companies with capital in excess of USD 5.2 million must be listed on the MSM. According to the Commercial Companies Law, companies must have been in existence for at least two years before being floated for public trading. Publicly traded firms in Oman are still relatively rare phenomenon; the majority of businesses are private family enterprises.

Money and Banking System

The banking system is sound and well-capitalized with low levels of non-performing loans and generally high profits. Oman’s banking sector includes 7 local banks, 9 foreign banks, 2 Islamic banks, and 2 specialized banks. Bank Muscat, the largest domestic bank operating in Oman, has USD 27 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. 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, and there are no restrictions for foreign banks to establish operations in the country as long as they comply with the CBO instructions.

Foreign Exchange and Remittances

Foreign Exchange

Oman does not have restrictions or reporting requirements on private capital movements into or out of the country. The Omani rial (RO) is pegged at a rate of RO 0.3849 to USD 1, and there is no difficulty in obtaining exchange. In general, all other currencies are first converted to dollars, then to the desired currency; national currency rates fluctuate, therefore, as the dollar fluctuates. The government has consistently stated publicly that it is committed to maintaining the current peg. The government has also stated publicly that it will not join a proposed GCC common currency. There is no delay in remitting investment returns or limitation on the inflow or outflow of funds for remittances of profits, debt service, capital, capital gains returns on intellectual property, or imported inputs.

Remittance Policies

Oman does not restrict the remittance abroad of equity or debt capital, interest, dividends, branch profits, royalties, management and service fees, and personal savings, but it does apply withholding tax to many of these transfers at a rate of 10 percent. Because Oman’s currency is pegged to the dollar, the GoO is unable to engage in currency manipulation tactics. Investors can remit through legal parallel markets utilizing convertible, negotiable instruments. There are no surrender requirements for profits earned overseas.

The GCC, of which Oman is a member, is a member of the Financial Action Task Force (FATF) and its regional body. The level of compliance with the FATF Recommendations for the anti-money laundering and counter-terrorist financing regime of the Sultanate of Oman, according to its 2011 Mutual Evaluation Report, is comparatively high for the region, and the legal framework is sound. However, the overall effectiveness was noted to be lacking in some areas. Statistics regarding suspicious transaction reports, investigations and convictions are not widely available.

Sovereign Wealth Funds

Oman has two main sovereign wealth funds: the State General Reserve Fund of the Sultanate of Oman; and the Oman Investment Fund. Omani sovereign wealth funds are not required by law to publish an annual report or submit their books for an independent audit. Many of the smaller wealth funds and pension funds actively invest in local projects.

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 GoO does not have a standard definition of a state-owned enterprise, 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. The GoO also does not have a complete, published list of companies in which it owns a stake.

In general, private enterprises are allowed to compete with public enterprises under the same terms and conditions with access to markets, and other business operations, such as licenses and supplies. 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 composed of various government officials, with a cabinet-level senior official usually serving as chairperson.

SOEs are given an operating budget, but, like budgets for ministries and other government entities, the budgets are flexible and not subject to hard constraints.

Privatization Program

The GoO has indicated that it hopes to reduce its budget deficits by privatizing or partially privatizing some government-owned companies. The plan for privatization is not publically available; however the GoO has already begun to reorganize its holdings in the electricity and logistics sector in anticipation of a public offering. In past privatizations — the divestment of a portion of government ownership in Omantel, for example — stock was offered on the Muscat Securities Market, but only to Omani investors. Foreign investors are allowed to participate fully in some privatization programs, even in drafting public-private partnership frameworks.

Responsible business conduct is generally referred to as corporate social responsibility (CSR) in Oman, where the term carries a different connotation than in other parts of the world. In Oman, CSR programs are organized, “extra-curricular” programs hosted and supported by the business entity to engender goodwill in the community 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; entrepreneurship incubators; and women’s or tribal empowerment events.

Labor and employment disputes and consumer rights violations (mostly the sale of expired food or counterfeit medicine or car parts) are widely covered in the press. There is a general culture of accountability, and a sense that companies who violate these tenets of corporate social responsibility will suffer in business and market share.

There are no independent NGOs promoting corporate social responsibilities; however, many business associations including the Oman American Business Center/AmCham-Oman pursue CSR initiatives as a part of their annual activities.

While the GoO does not have specific guidance for companies, it does have an expectation that companies will generally follow OECD-comparable guidelines. Additionally, each ministry has a department dedicated to facilitating CSR compliance and initiatives. Regulations promoting CSR have not, in the past, been waived to attract foreign investment.

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

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

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 40 percent shares in the company or in situations where the private sector company has punishable dealings with Government bodies and officials.

The Omani Penal Code (promulgated by Royal Decree 7/2018). In January 2018, the GoO issued a new penal code that completely replaced Oman’s 1974 penal code. Minimum sentencing guidelines for public officials guilty of embezzlement have increased from three months to three years, but the definition of “public officials” has also expanded to include officers of parastatal corporations in which the GoO 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 is still ambiguous and descriptions of licit and illicit banking, which could potentially cloud investment regulations, are unclear.

A lack of domestic whistleblowers 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 on implementing anti-corruption measures will likely find it difficult to do so without also putting in place an effective whistleblowing program and a culture of zero tolerance.

Ministers are not allowed to hold offices in public shareholding companies or serve as chairperson of a closely held company. However, many influential figures in government maintain private business interests and some are also involved in private-public projects. These activities either create or have the potential to create conflicts of interest. In 2011, the Tender Law was updated to preclude Tender Board officials from adjudicating projects involving interested relatives to “the second degree of kinship.”

The Sultan has dismissed several ministers and senior government officials for corruption during his reign. The “State Financial and Administrative Audit Institution” (SFAAI) was granted expanded powers under Royal Decree 27/2011, largely in response to public protests against the perception of corruption and nepotism at the highest levels of government.

In an extra attempt to prevent and eradicate corruption in the Sultanate of Oman, Sultan Qaboos issued Royal Decree 64/2013 ratifying the Sultanate in joining the United Nations Convention Against Corruption (the “UNCAC”). The Royal Decree was published in the Official Gazette and has been effective since November 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

Politically-motivated violence is rare in Oman. Incidents of violence were associated with Arab Spring-related demonstrations in 2011, including several demonstrations that resulted in blocked pedestrian and vehicle access to the Port of Sohar. Although most protests were peaceful, one demonstration that turned violent resulted in several injuries and one fatality. The government allows some peaceful demonstrations to occur.

Foreign workers play a significant role in the Omani economy, representing the vast majority of laborers, and about half of highly-skilled/specialized workers. There is a shortage in labor-intensive sectors, particularly construction, due to Omanization laws curbing the number of foreign workers who can be brought in to fulfill these roles.

The small percentage of Omani citizens in the private sector mostly work in administrative or managerial roles carved out for them through Omanization. Most drivers and secretaries are required to be Omanis across all sectors. Generally speaking, there is a surplus of workers in desirable fields, such as information technology and engineering. According to the World Bank, unemployment in Oman stood about 17.5 percent in 2016, and the most severely impacted demographic is young men. There are no available statistics about the informal economy, but it is mostly limited to rural areas in agriculture and fishing.

Omani citizens enjoy a high degree of protection, making labor dispute resolution very difficult and lengthy. An Omani citizen who is terminated before the end of the employment contract has the option to appeal the termination to the Ministry of Manpower, which can resolve the dispute or initiate a court case. The Ministry or the subsequent courts have broad powers to reinstate the employee or mandate a severance of several months to, uncommonly, several years. Foreign workers may also appeal termination to the Ministry but have less legal protection.

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. Appeals for wage increases, by sector or nationally, are usually directed towards the government, which then might pass a law increasing worker benefits, as was the case during the Arab Spring.

There were no significant organized private sector strikes in the past year, but several small-scale protests about the lack of jobs, inadequate unemployment benefits, and recruitment policies have occurred outside the Ministry of Manpower headquarters in Muscat. The Omani government is keenly aware and is attempting to respond by inducing private companies to hire more Omanis.

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. Oman has been criticized by the international community for not having a strong enough program to detect, deter, and prosecute labor violations, including Trafficking in Persons.

No new labor-related laws were enacted in 2017. A new comprehensive labor law has been long anticipated but there is no clear indication of when this law will be published or come into force. Government officials remain unwilling or unable to divulge the contents of the proposed draft.

Oman is eligible for Export-Import Bank of the United States (EXIM) financing, and Overseas Private Investment Corporation (OPIC) insurance coverage. Unusual for a Gulf country, Oman provides export credit insurance against commercial and political risk, through the Oman Development Bank. In addition, the independent Export Credit Guarantee Agency of Oman, a closed stock company, extends credit insurance, guarantees and financial support to Omani exporters, though its limit is USD 1 million per transaction. The U.S. Embassy in Muscat purchases local currency at the fixed rate of RO 1 to USD 2.6.

Oman’s National Centre for Statistics and Information (NCSI) is currently the only source of 2017 data. Total FDI as of September 30, 2017, was 8.32 billion RO (over USD 20 billion) compared to 7.15 billion RO (about USD 18.6 billion) as of September 30, 2016, a growth rate of 13.3 percent.

The United Kingdom remains by far the biggest investor in FDI, followed by other Gulf countries, but the U.S. is not far behind. According to the U.S. Department of Commerce’s Bureau of Economic Analysis, U.S. FDI stood at USD 974.4 million in 2016, down from USD 1.24 billion in 2015. World Bank data for net outflows in FDI shows a steep drop after 2014 followed by a gradual recovery.

Major foreign investors that have entered the Omani market within the last five years include 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) ($M USD) 2016 USD 66,800 2015 USD 69,800 
Foreign Direct Investment Host Country Statistical Source USG or International Statistical Source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2017 USD 9 2016 USD 974.4 BEA data available at
Host country’s FDI in the United States ($M USD, stock positions) N/A N/A 2016 USD 32 BEA data available at
Total inbound stock of FDI as percent host GDP 2016 28.7% N/A N/A N/A

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 USD 21,643 100% Total Outward Amount 100%
UK USD 9,129 42.2% N/A
United Arab Emirates USD 2,468 11.4%
Bahrain USD 1,192 5.5%
Kuwait USD 1,184 5.5%
Qatar USD 1,154 5.3%
“0” reflects amounts rounded to +/- USD 500,000.

Table 4: Sources of Portfolio Investment

Data not available.

Economic & Commercial Officer
U.S. Embassy, P.O. Box 202, Postal Code 115, MSQ, Muscat, Sultanate of Oman

2018 Investment Climate Statements: Oman
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