With the exception of a small number of trades and services, 100 per cent foreign ownership of Omani companies is now a reality under the new Foreign Capital Investment Law that came into force in the Sultanate on January 7, 2020.
Prohibited for 100 per cent foreign ownership are 37 types of commercial activities encompassing, among other areas, translation and photocopying services, tailoring, laundry, vehicle and automotive repairs, transportation and sale of drinking water, manpower and recruitment services, hairdressing and salon services, taxi operation, fishing, and rehabilitation homes for the elderly, disabled and orphans.
Notwithstanding this blacklist, representing an important but relatively small component of the Omani economy, the new law promulgated by Royal Decree 50/2019 (FCIL) opens up promising new sectors for 100 per cent foreign investment, according to a Muscat-based legal expert.
“The Ministry of Commerce and Industry (MoCI) has taken significant modernising steps in the new FCIL to facilitate an investment-friendly regulatory regime in Oman, informing us that it will now allow 100 per cent foreign ownership in all companies established in Oman other than those practicing any activity contained in a recently circulated ‘blacklist’,” said Oliver Stevens (pictured), Head of Corporate – Addleshaw Goddard Oman, specialists in corporate law.
“The blacklist, which sets out 37 activities does, at this time, not include sectors which were previously stringent in their Omani ownership requirements such as defence, oil and gas and restaurants.”
Stressing the importance of the new statute to Oman’s ambitions to drive foreign investment inflows, Stevens noted that the FCIL is expected to place the “Omani market in a stronger position to provide foreign investors with a more open, welcoming and robust regulatory framework within which to conduct business”.
Importantly, the FCIL does not stipulate a minimum share capital requirement, the legal expert pointed out. “In what we believe marks a seismic impact to the foreign investment landscape in Oman, the MoCI has additionally relaxed its previous practice of requiring any company with one or more foreign shareholders to have a minimum starting share capital of RO 150,000 (approximately $390,000). Note that fees for registering such a company at the Ministry are higher than they were previously and start from RO 3,000 (approximately $7,800) (subject to increase depending on the proposed share capital of the new company).”
Further clarity with regard to the specific provisions of the new law is expected to become available when the Executive Regulations are issued sometime later this year, Stevens added.
Oman Observer is now on the WhatsApp channel. Click here
