Oman’s Ministry of Commerce and Industry is going to enforce a new law starting January 2020 with an aim to make the country an attractive investment destination. The launch of this law is a move to ascertain the steadiness of foreign investments in the Sultanate.
Mohammed bin Rashid Al Badi, the Acting Director of the Legal Department at the Ministry of Commerce and Industry, was of the view that the ministry will apply the Foreign Capital Investment Law that is issued under Royal Decree No. 50/2019, starting from January 2, 2020. The law is anticipated to come into force after six months of its publication in the official gazette, and while talking about this, Mohammed Al Badi said: “Until the implementation of the new Foreign Capital Investment Law, the law which is already in force will continue to regulate foreign capital investment. The new Foreign Capital Investment Law will apply to all non-Omanis who want to establish a project that is economically feasible for the Sultanate, for which they would use their own capital and assets.”
He also said that for creating an appropriate investment environment in the Sultanate, an investment services centre had been founded at the Ministry of Commerce and Industry for the registration of foreign investors, business setup in Oman and for facilitating various licencing procedures.
It is compulsory for the investment services centre and other applicable organizations to comply with processes and timelines for allotting foreign investors with requisite permits, approvals and licenses. If the applicants fail to get a reply in the stipulated time, it would mean that their application has been rejected.
Al Badi also said that the Foreign Capital Investment Law offers multiple incentives and benefits for foreign investments to foster their stability and flow in the Sultanate, as they eventually have an impact on the economic development. It permits the investor to set up a company or do company formation in Oman in one of the acceptable activities, thus allowing them to own all of the capital.
This law does not specify a minimum benchmark for foreign capital investment in a specific project, as far as it complies with the proposed time frame for its execution as per the economic feasibility study.
He also said that the law does not allow for any substantial changes without the ministry’s approval. “Article 18 of the law gives the investment project the right to avail all of 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.”
Article 19 of the law allows the allocation of land or real estate for the investment project specifically under a long term lease. It also permits the right of usufruct without the requirement for the provisions of the Royal Decree controlling the use of land in the Sultanate, or the Land Law, to be complied to. This is as per the rules and guidelines laid out by the regulations in coordination with the pertinent authorities.
These authorities would specify and assign sites in each governorate for setting up of investment projects with the right of usufruct. They would also offer general services like water, gas, electricity, roads, sewage, communications and other such facilities to the project area. Article 21 of the law demands that the investment project can, either by itself or through a third party, import whatever it needs for its setting up process, expansion or operations.
This also includes any production requirements such as raw material, machinery or spare parts and means of transport that are apt for the nature of its activity, without the need for registering itself as an importer.
Al Badi also said that to stabilise the foreign investment in the Sultanate, the Foreign Capital Investment Law provides some guarantees; for example, the rights of investment projects being established in the Sultanate. Article 23 of the Foreign Capital Investment Law No. 50/2019 specifies that projects cannot be detained and investment is now allowed to be frozen or taken into custody, except if there is a court ruling for it. It also gets exemption from taxes of the state.
The newly launched Foreign Capital Investment Law also assures that the investment project cannot be seized, except as per the provisions of the expropriation law in public interest. In that case, a fair compensation needs to be provided without any delay. This is specified in Article 24 of the law. Likewise, the right of usufruct or lease is not permitted to be seized in the case of privatization of the land or real estate; the only exception is in cases that are prescribed either by law or by a court ruling.