Muscat: Oman’s Ministry of Commerce and Industry will bring a new law into force as of January 2020, which aims to make Oman an attractive investment environment. The introduction of this law comes as a move to ensure the stability of foreign investment in the Sultanate. Mohammed bin Rashid Al Badi, Acting Director of the Legal Department at the Ministry of Commerce and Industry, said that the ministry would implement the Foreign Capital Investment Law, issued under Royal Decree No. 50/2019, with effect from January 2, 2020.
The law is expected to come into force six months after its publication in the official gazette, and commenting on this, Mohammed Al Badi said: “Until the implementation of the new Foreign Capital Investment Law, the law which is already in force will continue to regulate foreign capital investment. The new Foreign Capital Investment Law will apply to all non-Omanis who want to establish a project that is economically feasible for the Sultanate, for which they would use their own capital and assets.”
He added: “As it is well known that investment laws play an important role in attracting foreign investment and the flow of capital to establish companies covering giant economic projects, which are needed by the Sultanate, they increase the level of efficiency of operating companies and the transfer of economic expertise and modern technologies. This results in diversification of the economic base, having a positive impact on it.”
He pointed out that in order to create a suitable investment environment in the Sultanate, an investment services centre had been established at the Ministry of Commerce and Industry for the registration of foreign investors, as well as for the purpose of facilitating licencing procedures.
It is mandatory for the invest services centre and other relevant organisations to abide by the procedures and deadlines for issuing foreign investors with approvals, permits and licenses. Should applicants fail to receive a reply within the stipulated time, it will mean that their application hasn’t been accepted.
Al Badi went on to say, “The Foreign Capital Investment Law has several incentives and advantages for foreign investments so to encourage their flow and stability in the Sultanate, as they have an impact on economic development. It allows the investor to establish a company in one of the permitted activities, enabling them to own all of the capital. The law does not stipulate a minimum for foreign capital investment in a project, provided that it abides by the proposed time frame for its implementation in accordance with the economic feasibility study.”
“It also does not allow for any substantial amendments without the ministry’s approval,” he added. “Article 18 of the law gives the investment project the right to avail all of the advantages, incentives and guarantees enjoyed by the national projects in accordance with the laws already practiced in the Sultanate. Additional benefits may also be given to foreign investment projects established in the less developed regions of the Sultanate.”
Article 19 of the law permits the allocation of land and real estate for the investment project under a long term lease. It also grants the right of usufruct without the need for the provisions of the Royal Decree regulating the use of land in the Sultanate, or the Land Law, to be adhered to. This is in accordance with the rules and provisions laid out by the regulations in coordination with the relevant authorities.
“The authorities will specify and allocate sites in each governorate for the establishment of investment projects with the right of usufruct. They will also provide general services such as water, electricity, gas, sewage, roads, communications and other such facilities to the project area. Article 21 of the law stipulates that the investment project, either by itself or via third party, can import whatever it requires for its establishment, expansion and operation. This includes production requirements, materials, machinery, spare parts and means of transport suitable for the nature of its activity, without the need to register itself as an importer.”
Al Badi added, “To make foreign investment stable in the Sultanate, the Foreign Capital Investment Law gives some guarantees, including that of the rights of investment projects established in the Sultanate. Article 23 of the Foreign Capital Investment Law No. 50/2019 stipulates that projects can not be seized and investment cannot be frozen or taken into custody, except by a court ruling. It is also exempt from taxes of the state.
“The new Foreign Capital Investment Law also guarantees that the investment project can’t be expropriated, except in accordance with the provisions of the expropriation law in public interest and in such a case fair compensation has to be provided without delay. This is stipulated in Article 24 of the law. Similarly, the right of usufruct or lease cannot be seized in the case of privatisation of the lands or real estate, except in cases prescribed by law or a court ruling.
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