In light of the Oman Economic and Free Zone Summit 2019 on 21 and 22 October 2019, we have set out below a brief summary of the incentives and the types of business activities permitted for companies that are set up within each Economic and Free Zone available in the Sultanate of Oman.
Free Zones and Special Economic Zones
Companies established under the Free Zones and Special Economic Zones in Oman benefit from tax exemptions as well as other commercial incentives such as allowing 100% foreign ownership. Currently, Oman has three Free Zones (Salalah Free Zone, Sohar Free Zone and Al Mazunah Free Zone) and two Special Economic Zones (the Duqm Special Economic Zone and Knowledge Oasis Muscat) with the intention of attracting different types of businesses to Oman. Each Zone has its own set of incentives.
Salalah Free Zone
The Salalah Free Zone is in the south of Oman. It has been established to attract investors involved in industrial estate, logistics, tourism and other mixed use-developments. The Salalah Free Zone allows for 100% foreign ownership of companies as well as a relaxed Omanisation rate of 10%, a 30-year tax-holiday and no custom duties. Additionally, investors do not need to meet to meet a minimum share capital requirement in order to incorporate there.
Sohar Port and Free Zone
This Free Zone is near the Port of Sohar and the Sohar Industrial Estate. It has been established to encourage investors in steel and metal, logistics and food sectors mainly. However, it also allows investors interested in incorporating companies with other trade activities to set up their business. Companies incorporated under the Solar Free Zone are able to benefit from full exemptions from custom duties on imports and also are not subject to minimum share capital requirements. However, the share capital declared to the Sohar Free Zone in the investors’ application must be deposited to the company’s bank statement. The Omanisation requirement is reduced to 15% for the first 10 years from the date of incorporation, and Sohar Free Zone companies can enjoy a 25-year tax holiday.
Al Mazunah Free Zone
Al Mazunah Free Zone is in the south of Oman, next to Yemen. It seeks to encourage investors in the warehousing, food processing and industrial sectors. Similarly to the Sohar Free Zone, companies incorporated in Al Mazunah Free Zone are exempt from custom duties on imports and no minimum capital requirements. Investors may also enjoy a 30-year tax holiday and relaxed Omanisation rates of 10%. Yemeni nationals are able to work in this Free Zone without having to obtain a visa or work permit.
Duqm Special Economic Zone
Duqm is an internationally renowned key hub and a gateway for the Middle East, South Asia, and North and East Africa. It has a port and dry dock as well as a fishing port, fisheries industries, industrial estates, logistics, tourism and other mixed-used developments. Investors can enjoy relaxed Omanisation rate of 25%. Additionally, there are no minimum share capital requirements or custom duties, and investors can enjoy a 30-year income tax exemption. Investors are also offered competitive land lease rates in the Duqm Special Economic Zone.
Knowledge Oasis Muscat Economic Zone
This Economic Zone seeks to attract investors wishing to incorporate IT service companies in Oman. These investors are entitled to significantly reduced Omanisation rates of 25%. Unlike the other Free and Special Economic Zones in Oman, this Knowledge Oasis Muscat Economic Zone has a minimum share capital requirement of twenty thousand Omani Rials (OMR 20 000).