Oman offers following advantages to the foreign investors to invest in oman.
- Political Stability.
- Liberal foreign ownership in companies permitted.
- Oman is rich in oil and gas.
- Capital and profits of a business entity is fully repatriable.
- No personal income-tax. All individuals can fully repatriate their savings.
- Committed to privatization, industrialization, economic diversification and development.
- Free trade and open market policy.
- Low income tax rate structure for companies and double taxation relief treaties available with many countries.
- Income tax holiday period of five years renewable for further period of five years, available for business entities engaged in priority areas of economic development.
- Geographically ideally located, proximity to Gulf, Asian and African markets.
- Well regulated stock exchange.
- Industries fulfilling certain conditions can get interest free/soft loans, exemption from custom duty on import of plant, equipment and raw materials and export credit insurance.
- Government leased land available at a concessional rate with good utilities.
- Modern infrastructure with good roads, airports, sea ports, and state of the art telecommunications and other services.
- English is used widely in day to day business commerce.
- Free trade zones in Salalah, Sohar, etc., offering attractive benefits to investors viz. full foreign ownership, low Omanisation, tax and custom exemption etc.
Economy and Business
Oman is an oil and gas based economy with oil and gas sector accounting for about 75% of government revenues and contributing about 50% to the Gross Domestic Product (GDP). Although the non-oil sectors contribution to GDP has been steadily increasing over the years, Oman's dependence on oil is likely to continue in the years to come. The government strategy for economic development is based on a series of five year development plans, and has the primary goal of a balanced government budget, encouragement of the private sector, Omanisation and diversifying the economic base of the country.
The monetary unit of Oman is Omani Rial (R.O.). The Rial is divided into 1000 equal units called Baizas. The Rial is tied to US Dollar, at the rate of Baizas 385.5 to US $ 1. There are no exchange controls in any form on inward / outward investment or on repatriation of capital and profits, either by nationals or expatriates.
The Capital Market Authority (CMA) regulates the securities market in Oman. The Capital Market Authority Law governs all the listed companies in Oman. Muscat Securities Market is the stock exchange of Oman. Membership in the exchange is compulsory for Omani licensed banks, public joint stock companies, and specialised loans institutions whose shares are listed in the securities market.
Only Commercial Companies are liable to pay income tax in Oman. There is no personal income tax, fringe benefit tax, gift tax, wealth tax or any form of estate duty, and there is no sales tax or value added tax.
Under the new Income Tax Law of Oman, income-tax rate applicable to any business establishment, Omani company or Permanent Establishment (i.e. foreign branch), for any tax year ending after 31st December 2009 would be as under:
|Taxable/assessed income||Tax rate|
||Flat rate of 12%|
As per the new Income Tax Law of Oman, withholding tax shall be charged on the following types of income accruing or arising in Oman:
- Consideration for research and development or for the use of or right to use computer software or as fees in return for management.
Any Omani tax payer that has paid or credited any of the amounts as specified above shall be liable to deduct withholding tax (@ 10% of the gross amounts) from the gross amount paid or credited to the account of any foreign person that does not carry on any business in Oman through a permanent establishment situated therein, and remit the same to the Secretariat General not later than 14 days from the end of the month in which the amount is paid or credited, whichever is earlier.
The Sultanate of Oman
The Sultanate of Oman is one of the six Gulf Cooperation Council countries, the others being The Kingdom of Saudi Arabia, Kuwait, Bahrain, Qatar and the United Arab Emirates. It stretches over 300,000 sq. kms. with a coastline of over 1,700 kms. The highest executive authority is the Council of Ministers deriving its power from His Majesty the Sultan, to whom it is collectively responsible.
The official language is Arabic and all communication with government is generally required to be made in Arabic. English is generally used for all written communication between businesses.