Overall, Oman’s investment climate is conducive to U.S. investment, despite presenting significant challenges, particularly to smaller, less-established investors. Omani officials and businesspeople generally value U.S. technology, skills, and expertise in a wide range of fields. They count on U.S. firms’ reputation for reliable, transparent business practices, and they admire U.S. business models, corporate values, and entrepreneurial culture. They are keen to take fuller advantage of the United States-Oman Free Trade Agreement (FTA), which was implemented in 2009. Obstacles to investing in Oman persist, however, including a difficult labor market, a slow and cumbersome governmental bureaucracy, restrictions on ownership of real estate, physical distance from the United States, and an economy overly dependent on oil revenues. A key issue to watch is whether political pressure stemming from unemployment exacerbates challenges in the labor market — in particular, an increasingly restrictive immigration policy and onerous requirements to hire and retain Omanis. Long-awaited foreign capital investment and labor laws may provide greater incentives and clarity, but uncertainty remains as to when the legislation will be enacted.
Advantages of investing in Oman include:
- Nearly ten years under a FTA, which includes duty exemptions and the right to wholly own a business without an Omani co-investor;
- A one-stop-shop at the Ministry of Commerce and Industry for business registration;
- The excellent quality of life: Oman is a modern, friendly, and scenic country, with outstanding international schools, widely-available consumer goods, modern infrastructure, an educated and largely bilingual Omani work force, and a convenient and growing transportation network;
- Oman’s geographic location, just outside the Arabian Gulf and the Strait of Hormuz, along busy shipping lanes carrying a significant share of the world’s maritime commercial traffic, with convenient access and connections to the Gulf, Africa, and South Asia;
- The steady and ambitious investment by the Government of Oman (GoO) in the country’s infrastructure, including manufacturing free zones, seaports, airports, rail, and roads, as well as in its health care and educational systems and facilities.
Challenges to investing in Oman include:
- Omanization mandates, which compel companies to hire and retain Omani employees;
- Restrictions on foreigners for real estate ownership and minimum capital requirements for investments;
- Burdensome bureaucratic procedures that are too often characterized by slowness and inefficiency, in addition to a quasi-legislative process that obscures proposed laws, rules and regulations governing business and investment issues;
- Oman’s physical distance from the U.S., remoteness in the region that inhibits accessibility, and insufficient or ineffective marketing contributes to an overall lack of awareness about the country to a U.S. investor audience;
- Economic diversification efforts have been lackluster and have not driven real economic growth. The economy remains overly dependent on oil revenue, and there is a sense of complacency with the recent recovery of oil prices.
|TI Corruption Perceptions Index||2017||68 of 180||http://www.transparency.org/
|World Bank’s “Doing Business”||2017||71 of 190||http://www.doingbusiness.org/rankings|
|Global Innovation Index||2017||77 of 127||http://www.globalinnovationindex.org/
|U.S. FDI in partner country ($M USD, stock positions)||2016||USD 32||http://www.bea.gov/
|World Bank GNI per capita||2015||USD 18,080||http://data.worldbank.org/