New Foreign Capital Investment Law in Oman
The Sultani Decree 50/2019 was issued by His Majesty Sultan Qaboos July 1, 2019 that replaced the old Foreign Capital Investment Law (FCIL). New FCIL was drafted with assistance from the World Bank. The new law came onto force on July 7, 2019.
Under the old regime the foreigners were not permitted to undertake commercial activities in the Sultanate of Oman unless they had an agent or formal presence. Foreigners were also not permitted to establish a wholly owned commercial company was restricted. The maximum equity that a foreigner could hold in any entity was upto 49%. But there were certain exceptions and complete foreign ownership was permitted in:
- Free Zones;
- under the Gulf Co-operation Council;
- under the free trade agreements;
- special projects that contributes to national economy but approved by foreign investment committee upon recommendation of MOCI.
New FCIL brought wide changes such as:
- removes mandatory requirement of an Omani partner to establish a wholly owned entity
- establishing Investment Service Centre in MOCI for licensing foreign investors and easing the formalities for an investment project
- Article 7 mandates foreign investors to abide by the execution time table for the execution of the project
- Cabinet would grant single approval to build and operate strategic projects on recommendation of MOCI.
The new law provides for new executive regulations to be issued within six months but until issued the old regulations of old FCIL shall continue to be in effect. But it remains to be seen in practice and how different it would be yet to be seen.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.