How to Navigate Foreign Direct Investment Laws in Oman?

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Oman has emerged as one of the most promising investment destinations in the Persian gulf region. With strong economic reforms, liberal business laws, and strategic global connectivity, the Sultanate continues to attract foreign investors across the world to invest in best sectors in Oman.

we’ll explore the foreign direct investment laws in Oman, the benefits and incentives offered to international investors, and how to set up a compliant and profitable business under the latest legal framework in 2025.

Overview of Foreign Direct Investment (FDI) in Oman

Foreign Direct Investment (FDI) plays a important role in Oman’s economic growth and diversification goals under Vision 2040. The government aims to reduce dependence on oil revenue by encouraging foreign participation in industries such as logistics, manufacturing, renewable energy, and tourism.

According to the latest reports, Oman has seen a steady increase in foreign inflows since the introduction of the Foreign Capital Investment Law (FCIL) in 2019, which simplified ownership structures and registration processes for foreign entities.

The Ministry of Commerce, Industry, and Investment Promotion (MOCIIP) has also digitized the investment process through platforms like Invest Oman, ensuring transparency, efficiency, and equal opportunities for all investors.

How is foreign capital investment law

The foreign capital investment law (FCIL), issued under Royal Decree No. 50/2019, represents one of the most transformative reforms in Oman’s investment landscape. This law replaced the previous 1994 regulation and was specifically designed to attract international investors and promote economic diversification in line with Oman Vision 2040.

Under this law, foreign investors are now allowed to own up to 100% of their business in most sectors without the need for a local Omani sponsor or partner. This major shift has positioned Oman as one of the most liberalized and transparent markets in the Gulf region for foreign direct investment (FDI).

The FCIL also provides a clear and predictable legal framework that enhances investor confidence and aligns with global standards for business protection and competitiveness.

Key provisions include:

Full foreign ownership permitted in approved sectors without local partnership requirements
Simplified and transparent company registration procedures through the Invest Oman portal
Protection against expropriation or nationalization except for public interest and with fair market compensation
The right to freely transfer and repatriate profits, dividends, and capital abroad in foreign currency
Equal legal treatment and protection for both local and foreign investors
Access to dispute resolution mechanisms and commercial arbitration under Omani and international law

Beyond ownership flexibility, the law also clarifies the rights and obligations of foreign entities operating in Oman. It ensures that foreign investors are not subjected to arbitrary restrictions or unfair competition and that their investments are safeguarded through transparent administrative and judicial systems.

Furthermore, the Ministry of Commerce, Industry, and Investment Promotion (MOCIIP) is empowered under this law to issue implementing regulations, approve foreign investment projects, and provide special incentives for strategic sectors such as manufacturing, logistics, renewable energy, and tourism.

Role of the Ministry of Commerce, Industry, and Investment Promotion

MOCIIP is the primary authority overseeing all foreign investment activities in Oman. It provides licenses, approves FDI projects, and ensures compliance with the FCIL.

The ministry also operates the Invest Oman Center, which serves as a one-stop hub for international investors—offering legal guidance, sector insights, and assistance in obtaining permits and incentives.

Ownership and Licensing Regulations for Foreign Investors

Under the new legal framework, foreign investors can:

Establish Limited Liability Companies (LLC) with 100% foreign ownership

Operate in Free Zones or Special Economic Zones (SEZs) such as Sohar, Duqm, or Salalah

However, certain activities like security, defense, and real estate may still require partial Omani participation or special approval.

The general steps to obtain a business license include:

Submitting an online application via the Invest Oman Portal

Providing details of shareholders and capital investment

Securing sector-specific approvals (if needed)

Paying registration and licensing fees

Once approved, the business can legally operate and enjoy the full benefits of Oman’s investment framework.

Incentives and benefits for foreign investors

Oman provides a range of incentives to make foreign investment more attractive and sustainable:

Tax and Customs Benefits
0% income tax for Free Zone companies
Tax holidays up to 10 years for eligible projects
No import or export duties on raw materials and machinery in Free Zones
Infrastructure and Logistics
Access to world-class seaports in Sohar, Duqm, and Salalah
Advanced logistics networks and low-cost utilities
Proximity to major Asian, African, and European markets
Legal and Financial Stability
Transparent dispute resolution mechanisms
Strong investor protection laws
Free transfer of capital and profits abroad
These benefits have positioned Oman as one of the most investor-friendly environments in the Middle East.

Restricted or Prohibited Sectors for FDI

Although Oman welcomes foreign investment, certain sectors remain restricted or subject to special conditions. These include:

Activities related to national defense or security

Oil and gas exploration (requires joint venture with government entities)

Real estate brokerage and property ownership in some areas

Media and publishing sectors

Investors should always consult with legal experts or MOCIIP before entering these sectors to ensure compliance with local regulations.

How to comply with Oman’s FDI laws?

To successfully invest in Oman, foreign companies must adhere to the country’s investment and commercial regulations.

Here’s a step-by-step compliance checklist:

Choose the Right Legal Structure ,LLC, branch, or free zone entity

Define the Business Activity , trading, manufacturing, logistics, or services

Secure Required Approvals , based on the nature of the business

Obtain Commercial Registration (CR),to begin operations

Maintain Proper Accounting and Tax Records ,as per Omani law

Hiring a local legal advisor or consulting firm can greatly simplify these procedures and ensure full compliance.

Conclusion

The foreign direct investment laws in Oman have transformed the country into a top-tier destination for global investors. With full ownership rights, attractive incentives, and a transparent regulatory environment, Oman provides an ideal platform for establishing and expanding international businesses.

If you’re considering investment in Oman, partner with experts who understand the market dynamics and legal framework , like Flamingo Holding , and take the first step toward building your global success story in the Sultanate.