OMAN 2020
Oman’s stable political, economic, and social system is enhanced
by excellent relationships between the Sultanate and neighbouring
countries.
Since the oil price slump in 1998 – 99, Oman has diversified
its economy and put greater emphasis on other industries, such as
tourism and liquid natural gas. Oman's Basic Statute of the State
expresses in Article 11, that, "The National Economy is based
on justice and the principles of a free economy."
The June 1995 Vision Conference: Oman 2020 developed the following
aims to securing Oman's future prosperity and growth:
- To have economic and financial stability
- To reshape the role of the Government in the economy and to
broaden private sector participation
- To diversify the economic base and sources of national income
- To globalise the Omani economy
- To upgrade the skills of the Omani workforce and develop human
resources
By 2020, it is expected that the economy will not be reliant on
oil, but rather, will have diversified into non-oil sectors, raising
higher levels of savings and investments.
The crude oil sector's share of GDP is estimated to drop to 9 per
cent in 2020, compared with 41 per cent in 1996.
The gas sector is expected to contribute around 10 per cent to
GDP, compared with less than 1 per cent in 1996.
The non-oil industrial sector's contribution is expected to increase
from 7.5 per cent to 29 per cent.
Incentives for Foreign Investment
- Tax exemptions for 5 years (sometimes renewable for a further
5 years) for industrial enterprises which contribute to Oman's
economy.
- Foreign investors are able to hold 49 per cent of equity, which
may be increased in mitigating circumstances.
- Concessional financing may be arranged through the Ministry
of Commerce and Industry and Oman Development Bank.
- A clear and efficient legal network which offers advice on company
law, copyright law, arbitration and agency law.
- English is the common language.
- A diverse economy which encourages privatisation of infrastructure
and services.
- Price stability, with an inflation rate of not more than 1%
since 1992.
- Stable currency with full convertibility.
- No personal income tax and no foreign exchanges controls.
- Tax and import duty exemptions.
- Interest free long-term loans to partly foreign owned industrial
and tourism projects.
Foreign Business
Foreign business participation in Oman is encouraged, providing
the company is established in accordance with the Foreign Business
and Investment Law of 1974.
Foreign companies are formed:
- As an incorporation of a local company or other commercial
entity
- As a branch office
- As a consultancy
- By appointing a commercial agent, ensuring that the company
only supplies services and/or goods to be imported into the Sultanate.
Airline and shipping offices, as well as companies with occasional
business are not governed by the Foreign Business and Investment
Law.
Potential businesses should apply for authorisation to the Foreign
Capital Investment Committee at the Ministry of Commerce and Industry
supplying the company's articles of incorporation and other pertinent
information.
It is illegal to operate in Oman without the appropriate authorisation
and heavy penalties are imposed on those not meeting the legal requirements.
It is highly difficult for companies to operate in Oman without
a local Omani sponsor although some companies are exempt from these
regulations.
For more information see www.omanet.com
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