by Antonia Dimou
Oman, the source of two-third of the world's oil exports, is in the middle of the East-West trade routes, ensuring easy access to markets in the Middle East, India, South-East Asia, Africa and Europe. The Sultanate is considered ideal for long-term investments as it posses a modern infrastructure, a strong industrial base, a stable government, and, most notably, the institutions that protect and favour foreign investment.
Oman’s membership in the World Trade Organization (WTO) ensures its adherence to international trade norms and practices, while its participation in the Indian Ocean Rim Associations for Regional Cooperation (IORARC) opens up a potential market of over 1500 million consumers. Additionally, membership in the Arab Gulf Cooperation Council ensures duty-free export of products within the Council’s member countries.
Oman offers a number of incentives that guarantee foreign investment. Major incentives focus on: provision of soft loans with low interest rates and easy payback periods; full repatriation of capital, net profit and royalties; up to 100% foreign ownership; exemption from customs duty on import of plant equipment; credit insurance through export; no personal income tax; relief from customs duty on raw materials for up to 10 years; corporate tax holiday of up to 10 years.
Foreign investors are assured of a reliable infrastructure that includes, among others, industrial estates and access to capital. Specifically, eight industrial estates, with another underway, provide complete support systems to industry in different parts of Oman. These estates offer a comprehensive range of services that could extend to their own gas-fuelled power stations and water supply, and housing complexes for the workforce.
The industrial estates in the Sultanate are eight namely Al Rusail, Sohar, Raysut, Nizwa, Sur and Al Buraimi, in addition to the Information Technology Industry Estate, Knowledge Oasis Muscat (KOM) and Al Mazyounah Free Zone, which aim to attract foreign investment, nationalize national capital, enhance the private sector, introduce new technology and promote international trade.
Additionally, the Sultanate’s well-organized private banking sector provides a wide range of financial services and credit facilities to investors. The Industrial Bank of Oman offers advisory services and considers equity participation in industrial projects. Also institutions like the Oman Development Bank channels government funding to help the private development of the economy and offers soft loans to small-scale industries and the service sector. Muscat Securities Market, the established and regulated stock market, is a potential source of new capital for the private sector, helping investors raise capital for the expansion of current projects and for the initiation of new ventures.
Setting up business in Oman is mainly facilitated by the Omani Centre for Investment Promotion (OCIPED) which provides services for new investment projects in the Sultanate. OCIPED was established to provide investors with the information and much needed practical help with the form of feasibility studies, of setting up operations and identifying export markets for finished goods.
At the same time, OCIPED coordinates with a number of agencies of importance to foreign investors such as the Ministry of Commerce and Industry, the Oman Chamber of Commerce and Industry, the Oman Development Bank, the Export Guarantee and Financing Agency, the Public Establishment for Industrial Estates, the Muscat Security Market, the Commercial Court, and the Ministry of Social Affairs, Labour and Vocation Training.
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