OPERATION FREE ZONE

Oman 2017 | TRANSPORT & LOGISTICS | FOCUS: FREE ZONES IN OMAN

The economic zones of Oman and their adjoining free zones are dominating FDI and internal investment numbers and are also at the heart of Oman's diversification efforts.

Economic zones were created in Oman with the purpose of concentrating investments in a variety of different economic spheres. Central in the creation of these economic zones were the free zones that exist within them, each offering a wide array of favorable and attractive benefits and incentives for bringing business to these areas. Each of these zones in Oman is different in the industries and investment volumes they have attracted. Supported and marketed heavily by the Omani government, these economic zones are being utilized effectively as mediums through which the country can maneuver the tricky post-oil downturn macroeconomic situation and accomplish the ambitious goals set out in its various 2020 and 2040 master economic plans.

To begin, the Al Mazunah free economic zone has recently seen bustling activity, commanding much more international investor attention than in years past. Situated in the south of the country in the Dhofar region, this free zone is located close to Yemen. Its proximity to Yemen is especially significant due to one of the unique incentives offered to businesses that operate in Al Mazunah, namely that businesses are able to enter Al Mazunah without a visa or completing border procedures between Oman and Yemen. It thus provides a great opportunity to companies that would like to trade with Yemen and serves as a gateway to the millions of consumers in East Africa. In the first quarter of 2016 alone, 21 different companies have signed investment deals in Al Mazunah, bringing the total number of multinational companies that signed agreements there to 75, with trade figures exceeding USD150 million.

The Sohar economic zone is a giant within Oman. Part of the remarkable growth of Sohar stems from the fact that it is now receiving all the maritime cargo traffic previously destined for Muscat's Sultan Qaboos Port, which has been refashioned to serve as a tourism hub. Last year, Sohar Port handled a record 1 million tons of cargo per week. The Sohar free zone stretches 4,500ha and has attracted USD25 billion in investments together with the port. The free zone acts as a vehicle to spur development in Sohar because the incentives attract companies that can take advantage of the world-class infrastructure that is in place, which includes processes for the exporting and importing of new goods and utilizing upstream products as feedstock for downstream processes.

Duqm reigns supreme as the largest economic zone in Oman, with each passing day seemingly bringing new developments to the 1,745sqkm region that enjoys 70km of coastline. The latest big investment in Duqm came from China in the form of a USD10 billion industrial park. The country is working hard to develop this area into a bustling area of economic activity and has plans to see its population increase to 100,000 over the next 10 years. It has set up a one-stop-shop to seamlessly facilitate investments from interested parties all over the globe. Other recent news out of Duqm that harbors national importance includes a massive, recently built 200 million barrel oil storage facility; the first mineral exports took place out of the port in early 2016; and a tender was floated for the construction of a major fishery port there as well.

Again representing the south of the Sultanate, Salalah has a red hot free zone as well. The Ministry of Transport and Communication reported that activity at the Port of Salalah, already the biggest port in Oman, has grown by a whopping 70%. The Port has also signed an exciting MoU with the Port and Maritime Authority of Iran to foster growth in a variety of sectors of mutual interest, including logistics. Incentives in the Salalah free zone are strong and include an exemption from all corporate taxes for 30 years and 100% foreign ownership opportunities. Set to remain a vital player for years to come, a large-scale LPG plant is in the works in Salalah and will further develop Oman's downstream capabilities.