The Ministry of Commerce and Industry (MOCI) in Oman will implement the new Foreign Capital Investment Law from January 2, next year.
“The current law would continue to regulate the foreign capital investment in the Sultanate till the new law is implemented”, said Mohammed bin Rashid al Badi, Acting Director of the Legal Department at the Ministry.
As stipulated in Article V, the Foreign Capital Investment Law, issued under Royal Decree No. 50/2019 should come into force six months after its publication in the official gazette.
The new law would be applicable for all non-Omanis who intend to establish a project with their own capital and assets, which should economically feasible for the Sultanate, Al Badi said.
“The new law offers several incentives and advantages for investors to encourage foreign investment flow to the Sultanate as it will ensure economic development”, he said.
The Foreign Capital Investment Law allows the investor to establish a company in one of the permitted activities owning the entire capital.
The law does not stipulate a minimum limit for a foreign capital investment in a project provided it abides by the timetable it has offered for its implementation, in accordance with the economic feasibility study.
It also does not allow making any substantial amendments in it without the ministry's approval.
He added: As it is well known that investment laws play an important role in attracting foreign investments and the flow of capital to establish companies covering giant economic projects needed by the Sultanate. It increases the level of efficiency of operating companies and transfer of economic expertise and modern technologies. This result in diversification of the economic base and have a positive impact on it. He pointed out that to improve the investment environment in the Sultanate and create a suitable environment for it, an Investment Services Centre was established at the Ministry of Commerce and Industry for registration of a foreign investor and make the procedures of getting approvals and licenses required for the project simple and easy. It is mandatory for the Invest Services Centre and other relevant organisations to abide by the procedures and deadlines for issuing approvals, permits and licenses as applied by a foreign investor. If the applicant does not get any reply within the stipulated time, it would mean that his or her application was not accepted.
Mohammed Al Badi said that the Foreign Capital Investment Law has several incentives and advantages for foreign investments to encourage their flow and stability in the Sultanate as it has an impact on economic development. The Foreign Capital Investment Law allows the investor to establish a company in one of the permitted activities owning the entire capital. The law does not stipulate a minimum limit for foreign capital investment in a project provided it abides by the timetable it has offered for its implementation, in accordance with the economic feasibility study. It also does not allow making any substantial amendments in it without the ministry's approval.
Al Badi said that Article 18 of the law gave the investment project the right to avail all the advantages, incentives and guarantees enjoyed by the national projects in accordance with the laws already practiced in the Sultanate. Additional benefits may also be given to foreign investment projects established in the less developed regions of the Sultanate.
Mohammad bin Rashid Al Badi also said that Article 19 of the law permits the allocation of land and real estate for the investment project under a long term lease. It also grants the right of usufruct without abiding by the provisions of the Royal Decree regulating the use of the Sultanate's lands and the Land Law. This is in accordance with the rules and provisions decided by the regulations in coordination with the concerned authorities. The concerned authorities will specify and allocate sites in each governorate for the establishment of investment projects with the right of usufruct. They will also provide general services such as water, electricity, gas, sewage, roads, communications and other such facilities to the project area.
Article 21 of the law allows that the investment project, itself or thought third party, can import whatever it requires for its establishment, expansion and operationalisation. This can be either production requirements, materials, or machinery, spare parts and means of transport suitable for the nature of its activity without registering itself as importer, said Mohammed Al Badi.
He said: To make foreign investments stable in the Sultanate, the Foreign Capital Investment Law gives some guarantees including guarantee of the rights of investment projects established in the Sultanate. Article 23 of the Foreign Capital Investment Law No. 50/2019 stipulates that projects could not be seized and investment cannot be frozen or taken into custody, except by a court ruling. The taxes of the state is exempted from it.
Al Badi added: The new Foreign Capital Investment Law also guarantees that the investment project could not be expropriated except in accordance with the provisions of the expropriation law in the public interest and in that case the fair compensation has to be given without any delay. It is stipulated in Article 24 the law. Similary, the right of usufruct or lease cannot be seized in case of privatision of the lands or real estate, except in cases prescribed by law or a court ruling.