The Omanis Ministry of Commerce and Industry, (MOCI) issued the Executive Regulations of the new FCIL in June 2020 which specified provisions relating registration of the foreign investment projects including benefits available to specified projects and land allocation for investment and business purposes and, an inspection of the projects by the Omani regulatory authorities.
The Minister of Commerce, Industry and Investment Promotion formerly known as MOCI issued Ministerial Decision (MD) No. 209/2020 during December 2029 and finally decided on the list of activities that foreign investors are prohibited from participating and conferring the activities to Omani investors for safeguarding the national products and entrepreneurship projects.
In accordance with the latest MD, an Omani investor can make investments in all activities and if desires can enter a partnership with a foreign investor. Any exception to the prohibited list can only be granted with express written permission of the Minister of Commerce, Industry and Investment Promotion.
The Sultanate of Oman vide MD 209/2020 has issued a list of prohibited activities that cannot be undertaken under the new FCIL.
The full list of the activities prohibiting foreign investors is enumerated in detail however most of the activities are most unlikely to be of any great interest to major international investors.
Importantly prohibition of retail sales of fuel would limit future liberalisation of the retail fuel market anymore unless and until the Ministry considers granting an exception and permits foreign investment in such activities.
The conditions and procedures for granting exceptional approval have not been mentioned in the MD and likely to be considered on a case by case basis.
Additionally, any restriction on shipping and unloading of goods are not very clearly spelt out and may have broader interpretation. It will remain to be seen how these are interpreted by the Ministry in practice without any further clarification in between.
The reservation of drinking water to Omani investors generally considered as an attractive business will support local investors as foreign investors will no longer be able to participate in this business.
The new Foreign Capital Investment Law published in July 2019 came into force from January 2020 and made great relaxation to the rules and regulations of foreign investment. It also simplified and streamlined the registration and business licensing procedures keeping in mind the interests of rights and incentives of foreign investors matching those of the local Omani investors.
The most important of the changes in the new FCIL was the permission of 100% foreign ownership in many business sectors in Oman.
Bottom line
The list of prohibited activities mostly contains activities that are less lucrative to international investors, and Oman, with its continued effort to promote FDI by improving ease of doing business, is expected to maintain and increase FDI inflow in the country as well as help generate local employment.
