CHANGE IS COMING

Oman 2017 | EXECUTIVE GUIDE | REVIEW: DOING BUSINESS

With reforms outlined in Oman's ninth Five-Year Plan already taking shape, much is set to change for the business community in Oman.

With the state seeking to reduce its role in the economy, new ventures and partnerships are already taking form as part of the country's ninth Five-Year Plan. Oman is currently ranked 66 of 190 countries in the World Bank's Doing Business Report. The country has long had the tools necessary to improve its position, and with the government making a serious effort to allow private business to have a more prominent role in the economy, Oman is only set to benefit in the coming years.

Business Structure

The primary types of business in Oman are joint stock companies, limited liability companies, partnerships, joint ventures, and branches of foreign companies. In order for any foreign prospective businessperson to open or conduct business in Oman, he or she must obtain pertinent licenses from the Ministry of Commerce and Industry. According to current laws, for any business an Omani citizen must own at least 30% of capital in any Omani company; there are, however, certain waivers for 100% foreign participation, so long as there is at least OMR500,000 in capital along with the businesses' activity having a direct correlation to the national economy's development.

Free Zones

Oman has three free zones, located in Sohar, Salalah, and Al Mazunah. Businesses operating at the Sohar Free Zone benefit from a full exemption from customs duties for goods imported into the free zone. Tax exemptions are granted for up to 25 years, and businesses may be owned in full by foreigners. The Sohar Free Zone was created to attract and boost investment in the Sultanate's logistics, food, and steel and metal industries, with close proximity to the Sohar Industrial Estate and the Port of Sohar. The Salalah Free Zone offers income tax exceptions for as many as 30 years in addition to certain exemptions on customs and full foreign ownership. The zone in Salalah gives business access to better infrastructure and labor costs than in other areas of the country, and has relaxed Omanization laws. Oman's third free trade zone, located in Dhofar in the country's southwest, is the Al Muzunah Free Zone. Like the other two, Al Muzunah offers customs exemptions, full foreign ownership, and exemptions from certain taxes, here extending to 30 years.

The Sultanate also contains the Duqm Special Economic Zone, which consists of several spaces, namely tourism and educational areas, petrochemical complexes, dry-docking, fisheries, and industrial and logistics areas, in addition to a town and airport. Like the free zones, the special economic zone offers full foreign ownership and customs and tax exemptions, in addition to lower leasing rates for land.

Business Etiquette

In line with any other GCC country, a basic understanding of local customs alongside an obvious display of respect for colleagues and supervisors alike can be the difference between making the deal and destroying a professional relationship. The people of Oman greatly emphasize the importance of the personal relationships that they form between other business associates; as such, they have a clear and defined preference to work with businesspeople and companies with which they are already familiar and whom they trust. Given that Oman has a high percentage of expatriates, many of whom are in the business community, it is a possibility that all business dealings may be made with other expats, rather than Omanis. Subtle and conservative dress should be worn in all business dealings, and women should take care to cover both their knees and shoulders, though covering of the head is not necessary or expected. While Arabic is the Sultanate's official language, among the business community English is widely spoken. Despite the ubiquity of English, the effort should be made to learn a few key Arabic words and phrases, the charm of which might be of benefit. If invited to an Omani home, it is appropriate to arrive with a gift; refrain, however, from bringing gifts of alcohol or pork products. Standard business hours are from Sunday through Thursday, from 8am to 1pm, and from 3:30pm to 6:30 am.