New regulations to strengthen investments in industrial cities

MUSCAT, SEPT 13 – The Decision 169/2020 issued by the Public Establishment for Industrial Estates (Madayn) in May this year effectively empowers the Authority to enhance the investment appeal of industrial cities established across the Sultanate.
The amendments introduced via the Decision will undoubtedly contribute to attracting more local and foreign investments in the various industrial cities, according to Hasan bin Marhoon al Marhoon, Director General of Planning and Business Development at Madayn.
The investment regulations play a key role in setting rules, procedures and legislative frameworks to organise the process of attracting local and international industrial developers to invest in building, managing and operating specialised investment cities; determining the period of usufruct contracts and investment agreements for developers to be 99 years according to the project; and opening the way to attract global and regional experiences and expertise in the field of building, managing and operating economic cities, and organising the contracting with them according to management and operation agreements of up to 25 years.
The regulations also grant the managements of the industrial cities in the various governorates full authority to approve investment applications of up to 100,000 square metres for industrial lands.
In addition, the regulations set a maximum period of ten days to answer the investor regarding the investment request, and specify a period of 30 days from the date of approval of the investment application to sign contracts and complete investment procedures in Madayn’s various industrial cities.
The investment regulations link the practice of investment activities in the industrial cities with activity license that is renewed annually, and this shall not be granted or renewed except to investors who meet the conditions specified in the law.
One of the major conditions is achieving the Omanisation rate in the projects. The rights of investors and obligations are clearly defined and so are Madayn’s obligations towards investors. Moreover, the cancellation or suspension of the license is only made in specific and restricted cases in a manner that guarantees the interests of investors and does not threaten their investment activities.
Al Marhoon added that in order to ensure Madayn’s commitment to development and use of best management practices in providing services, the investment regulations include specific dates and time periods for granting approvals and licenses.
The regulations clarify that lease contracts are set for investors for a period of thirty years, renewable for a similar period, and restrictions have been put in place for subletting and not allowing except the license holder to engage in any activity inside the industrial cities to limit shadow investment and not perform any activities that conflict with applicable laws and regulations.
The regulations also include clear procedures for handling the status of buildings and facilities set up by investors and developers upon the expiry of contracts and in a manner that guarantees their rights and those of others.
Furthermore, the regulations allow investors and developers in the event that their projects falter and cannot continue under exceptional circumstances to sell buildings and establishments built on the leased lands according to specific procedures, provided that selling is to investors who are authorised to engage in the same specific activities according to the uses of lands and facilities.
Besides, the regulations play an important role in setting the relationship between investors, cargo transport companies and transportation intermediaries, with specifying periods of time to provide service to investors and not allowing empty means of transportation to enter the industrial cities except with a permission and request from an investor working in the industrial city.
The regulations also give emphasis on the employee’s relationship with investors, ensuring their rights and those of investors, while setting restrictions and requirements for the workers’ housing and ensuring the provision of humanitarian requirements in accordance with the best standards and relevant conditions.
The regulations set strict restrictions regarding insurance on establishments, buildings, property and utilities in a manner that achieves the highest levels of maintenance. To work according to the best standards of transparency and clarity with the investors, a list of violations has been developed indicating the value of the violation and the clear and defined measures to be taken with an illustration of a table showing the possible violations.