By Staff writer
Draft legislation will reportedly remove $389,000 capital requirement for expat businesses
Expats will be able to own 100 percent of a company in Oman, under a new law to boost foreign investment in the sultanate, it was reported on Wednesday.
Oman’s new foreign capital investment law, which is in its third and final drafting stage, will allow 100 percent foreign ownership and remove the minimum capital requirement to open up the market, Times of Oman reported.
Under the current law, foreign investors are required to have a local shareholder that owns at least 35 percent of the foreign company.
However, many expats are reluctant to have a local shareholder for a range of commercial, operational and legal reasons.
Oman’s Ministry of Commerce and Industry (MoCI) has completed the third draft of the new law in collaboration with the World Bank, in an attempt to encourage higher levels of foreign investment into the country at a time when its economy is suffering from the low oil price.
Oman expects to run a deficit of OMR3.3 billion ($8.6 billion) this year, according to its 2016 budget announced this month.
The ministry has also proposed the removal of the OMR150,000 ($389,000) minimum capital requirement for foreign investors to set up businesses in the sultanate.
The law will allow for tax incentives, to be addressed in the forthcoming new income tax law, the newspaper said.
WOW..GOOD NEWS, but we have to look at the final draft. No businessman will enter without proper benefits and local controls, in particular for insisting local labour percentage. Also Dubai is next door with all benefits for expat community. So Oman has to give more benefits to attract foreign investments, otherwise it will be like any of the other GCC countries. It remains on paper but it will never became a reality.
Additionally, this scenario will raise competitiveness in Oman, because many operations will be initially out-skilled by a higher quality performance delivers by expatriate operations/services/workers. Whilst this will negatively impact many established companies initially, assuming the plan works and a substantial amount of investment materializes, future ventures and businesses established by Omanis will have a higher investment in training and education.
However, nobody likes being forced to spend more. Oman is already known and discussed by local CEOs for its limited interest, level of active investment, and distinct lack of understanding in how and why to invest in strategic prospects.
Whilst they are amazingly warmhearted people alhamdullilah, Omanis' complaints about how 'unfair' the situation is, that they are being outdone by foreigners will surely go through the roof and drive some level of underlying anti-expatriate sentiment.