|02 July, 2019

New Royal decrees aim to boost Oman’s economy

The law will also expand sectors viable for foreign investment to include growth-oriented strategic projects

Image used for illustraive purpose. High Angle View Of Colleagues Working On Table.

Image used for illustraive purpose. High Angle View Of Colleagues Working On Table.

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Muscat: Four of the Royal Decrees issued by HM Sultan Qaboos Bin Said on Monday, 1 July, will boost the Sultanate’s economy, making Oman more globally competitive and an even more attractive investment hub, according to the government.

The royal decrees were issued regarding a new Foreign Capital Investment Law, Privatisation Law, Law for Partnership between the Public and Private Sectors, and Bankruptcy Law.

A joint statement released by the Government Cooperation Centre - Ithraa, the Ministry of Finance, and the Ministry of Commerce and Industry read: "These royal decrees come in the framework of the government's continued efforts towards creating an attractive legislative framework for investment in all ways, and to continue to issue and update legislation to keep up with accelerating changes and to serve the Sultanate's future vision goals and to make the country more competitive globally.

"The laws also reflect the Sultanate's efforts to give the private sector a role in development, and will also play a part in giving Omani labour a bigger chance to find job opportunities," the statement added.

The four government organisations broke down the goals of each of the four laws in their statement, explaining how each will benefit the local economy.

The 'foreign capital investment law' has been laid down to encourage foreign investments by giving them similar rights as local projects, and according to the new law, even give them preferential treatment in some cases.

The statement regarding this particular law said:”This law will provide incentives to foreign investments to draw in foreign investors, such as giving investment projects all incentives that a local project will have, and making it possible for foreign investments to be given preferential treatment on a quid-pro-quo basis."

The statement added: "The Foreign Capital Investment Law aims to reinforce the Sultanate's position as an attractive destination for investments and to facilitate procedures and permits for forign investments.

"The law will also expand sectors viable for foreign investment to include growth-oriented strategic projects."

This law will go into affect six months from its date of release of the royal decrees.

The 'law for partnership between the public and private sectors' aims to lower the cost of public utilities and projects by involving the private sector in construction and other operations, which the government hopes will increase the quality of services and projects.

The statement read: "Partnership will be defined as activities or providing public services which have an economic or social benefit in line with Oman's strategy.

"The law aims to encourage the private sector to invest in basic infrastructure projects and public utilities and add a regulatory base as to how the partnership will managed transparently.

"The project also aims to improve the quality and lower the costs of public utilities, thereby lowering their burden on the public budget,” the statement added.

This law will be handled by the newly created Public Authority for Privatisation and Partnership.

The 'privatisation law', which this new authority will also oversee, will strengthen the private sector's role in the economy.

Regarding the privatisation law, the government’s statement read: "The law aims aims to expand the private sector's role in owning and running economic activities, encourage investments being drawn in and technology being transferred to Oman, increase efficiency, improve services, find good job opportunities, and to develop capital."

This law also includes articles relating to "settlements for employees who are impacted by the privatisation of projects."

Finally, the 'bankruptcy law' will protect business owners from any fallout that occurs from bankruptcy, which includes high debts or unclear procedures.

Regarding this, the statement read: "The law aims to to find a legislative framework to restructure the procedures that help a business owners overcome debt, regulate the bankruptcy of forgin companies or their franchises in Oman, and help business owners who stumble to get back on their feet and continue their economic activity."

This law will contain a pre-settlement clause called a "restructuring period," where government agencies will cooperate with the owners of the business in order to help them settle their debts.

This final law will go into affect a full year after it is released, according to the statement.

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