With its strategic location and burgeoning economy, Oman could hold promise for business owners considering expansion within the Middle East. While Oman has been reliant on oil for some time now, over recent years the government has introduced new measures to encourage new investment and growth within the economy that will allow the country to diversify.
But is this the right time for you to start a business in Oman? Let’s take a look at some of the benefits on offer to foreign investors setting up here.
Oman is enjoying economic growth – and plans for more
Oman’s economy continues to grow as it makes plans for the future. Currently moving through Oman’s ninth Five-Year Development Plan (2016-2020), the country is focusing on building a stronger economy for the future with expansive diversification.
Looking further ahead, Oman’s Vision 2040 presents its desire to develop multiple sectors, including infrastructure, tourism, technology, hospitality, transport, manufacturing and mining. There are also plans in the mix to develop the country’s capital, Muscat, as a link between Asia and Africa, helping to further initiate growth.
In terms of ongoing projects, these include the Salalah LPG Project, Mina Sultan Qaboos Waterfront Project, and the extension of Muscat International Airport.
Oman is making plans to expand out of oil
Discovering oil brought about a dramatic improvement to Oman’s economy. However, Oman’s reserves are not as plentiful as some of its neighbours, so wisely, the country is taking steps to generate growth outside this sector, so that it doesn’t remain so reliant on this one commodity.
Introducing initiatives to expand the export of non-oil products, the government has created opportunity for other sectors, such as manufacturing and mineral mining, fishing and pharmaceuticals.
Oman’s set-up allows foreign investors to prosper
With a relatively small population, Oman knows it needs to look outside of its borders to continue its growth within them. With that in mind, Oman offers a number of incentives to encourage both local and foreign businesses, such as tax exemptions, interest free loans, free trade zones and preference in allocation of government land.
Of course, the benefits of encouraging growth is beneficial on both sides. With these incentives in place, foreign businesses can expand and prosper, while Oman profits from economic development.
And it seems to be working. Oman’s macroeconomic environment is ranked among the top 20 countries in the world by the World Economic Forum (WEF), largely due to its economic stability and attractiveness to foreign investment.
What else can foreign investors expect from setting up business in Oman? With a vibrant expat and foreign investor community, Oman makes it easy to settle and network there. Oman also offers a well-built infrastructure, a safe and secure environment, and a rich cultural heritage.
Oman offers a variety of company structures for foreign investors
Foreign investors setting up in Oman can choose from a range of company structures, allowing them to find the one that will best suit their business activities. Aside from free zone options, there are various company structures to choose from, including a branch or representative office, a joint stock company, or a limited liability company (LLC).
The LLC is the most common option for foreign investors, and typically allows 70% ownership, with a local partner required for the remaining 30% share. However, there are ways to enjoy 100% ownership if you meet certain requirements. US citizens can also benefit from 100% ownership alongside other incentives thanks to the 2009 Oman-USA Free Trade Agreement.
Oman provides a favourable tax environment
Foreign investors may also benefit from Oman’s appealing tax system. In Oman, there is no personal income tax for business owners or employees. There are no foreign exchange restrictions or levies, and there is an exemption from corporate income tax on the first OMR30,000. Once established, a company typically has a flat rate of 15% corporate tax. Within free zones, there is a complete exemption from corporate taxes for up to 50 years.
Want to find out more about the benefits of starting a business in Oman? Talk it over today with one of the experts at Fusion. As your local partner in Oman, Fusion will be with you every step of the way as you expand throughout the Middle East, to take advantage of all this incredible region has to offer.