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Oman Introduces New Foreign Capital Investment Law

Oman Introduces New Foreign Capital Investment Law (FCIL) Listing 70 Prohibited Activities

Last Updated on July 2, 2021


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.

No Activity
1. Manufacture of Omani halwa (Omani dessert)
2. Tailoring of Arab men wearing apparel
3. Tailoring of non-Arab men wearing apparel
4. Tailoring of Arab and non-Arab ladies wearing apparel
5. Tailoring of sports clothing
6. Tailoring of military uniform
7. Manufacture of Omani kimma (Omani cap)
8. Manufacture of women’s abaya (gown)
9. Manufacture of Omani khanjar (traditional dagger)
10. Transport and sale of drinking water
11. Motor vehicle electrical repair and recharging of batteries
12. Repairing and cleaning motor vehicle radiators
13. Repairing punctured tyres and metal wheels
14. Wheel balance
15. Motor vehicle service stations
16. Replacement of motor vehicle oils
17. Repairing car air-conditioner
18. Repairing motor vehicle exhaust pipe
19. Car cleaning and polishing
20. Wholesale of fruits and vegetables
21. Wholesale of cooking gas
22. Liquefied petrol gas filling stations
23. Retail sale of fresh fruit, vegetables and dates in specialised stores
24. Retail sale of honey in specialised stores
25. Motor vehicle fuel stations
26. Diesel fuel stations
27. Retail sale of telephones and their accessories in specialised stores
28. Retail sale of mobile telephones and their accessories in specialised stores
29. Retail sale of souvenirs, paintings and gifts in specialised stores
30. Retail sale of flowers and natural plants in specialised stores
31. Retail sale of pottery and handicrafts in specialised stores
32. Retail sale of cooking gas in specialised stores
33. Retail sale of silverware and gifts in specialised stores
34. Retail sale in specialised stores of cards of telecommunications services licensed in the Sultanate
35. Retail sale of traditional weapons in specialised stores
36. Retail sale of animal feed in specialised stores
37. Retail sale of bags in specialised stores
38. Retail sale of ceremony requirements in specialised stores
39. Retail sale of fireworks in specialised stores
40. Retail sale of Omani khanjar (traditional dagger) in specialised stores
41. Retail sale of empty gas cylinders in specialised stores
42. Retail sale of wedding cards in specialised stores
43. Retail sale of handcraft products in specialised stores
44. Retail sale of beekeeping supplies in specialised stores
45. Pilgrim and umra performers’ transport
46. Road transport by trucks of cooking gas cylinders
47. Loading and unloading of goods
48. Customs clearance offices
49. Valuation of cancelled vehicles
50. Insurance commission agent
51. Real estate brokerage (auctioneer offices)
52. Manpower recruitment offices
53. Employment offices
54. General cleaning of buildings
55. Photocopying and typing services
56. Transactions clearance offices
57. Making and installation of neon signboards
58. Managing and operating fuel stations
59. Driving schools
60. Specialised rehabilitation centres
61. Elderly people care centres
62. Orphanages
63. Rehabilitation centres
64. Other library and archives activities
65. Washing all kinds of clothes and textiles, except what is carried out in tourist establishments
66. Ironing of clothes, except what is carried out in tourist establishments
67. Laundry and steam ironing (dry cleaning), except what is carried out in tourist establishments
68. Hair cutting, styling and shaving for men, except what is carried out in tourist establishments
69. Hairdressing and cosmetic treatment for women, except what is carried out in tourist establishments
70. Hair cutting and styling for children, except what is carried out in tourist establishments

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.


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