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.
• 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 for a non-renewable period of five years available for entities carrying its main activities in the field of industry.
• Geographically ideally located, proximity to Gulf, Asian and African markets.
• Well regulated stock exchange.
• 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.

Oman is an oil and gas based economy with oil and gas sector accounting for about 71% 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. 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. Under the Oman Income Tax Law, Oman has adopted a global tax system whereby a company in Oman is taxed on its entire income, wherever earned in the world, subject to provisions in Oman tax law and Double tax treaties to avoid International double taxation. The Executive Regulation to the Oman Tax Law provides the detailed rules which apply to the tax treatment of certain income and expense items, thin capitalization rules and specific forms to be completed for tax purposes.

Corporate Tax Rates

Under the 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 would be @15% on the taxable/assessed income.

In the case of small enterprises meeting specific criteria would be taxed at 3% on declared taxable income subject to fulfilment of certain conditions.

Withholding Tax

Withholding tax applies to payments (income to the recipient accruing in Oman) made by an Omani taxpayer or government body to a foreign person which does not have a permanent establishment in Oman or to a foreign company that has a permanent establishment in Oman but such payment does not form part of its taxable income in Oman, for:

1. Consideration for the use, or right to use, of computer software;
2. Royalties;
3. Management fees;
4. Research and development;
5. Performance of services (certain specified categories of services are specifically excluded from withholding tax)

Royalties include:

1. Consideration for the use or the right to use of:

• Intellectual or proprietary right either for artistic, literary or scientific work, including computer software, cinematograph films, or films or tapes or discs or any other means used for radio or television broadcasting.
• Patents, trademarks, design, drawing, models and secret process or formula.
• Industrial, commercial or scientific equipment.

2. Consideration for information concerning industrial, commercial or scientific experience.2. Consideration for information concerning industrial, commercial or scientific experience.

3. Consideration for granting rights of exploitation of mining or any other natural resources.The domestic withholding tax rate on the above is 10%. Omani withholding tax may be reduced or eliminated if the foreign company is based (resident) in a country with which Oman has a DTA. Withholding tax must be paid within 14 days following the month of payment or credit, whichever is earlier and Income Tax Form 18 must be filed with the Tax Authority online. The obligation to deduct this tax shall rest with the company or the permanent establishment which pays the above amount.