Oman

Ease of Doing Business Rank: 68

Overview

 

Geographic location

The Sultanate of Oman is a country on the southeastern coast of the Arabian Peninsula in Western Asia.

The United Arab Emirates and the Gulf of Oman lie to the north, Saudi Arabia and Yemen to the west and the Arabian Sea lies to the south and east.

Spoken language

The official and national language of Oman is Arabic. Minority languages include Baluchi, Urdu and Indian dialects.

English and Swahili are commonly spoken as second languages due to historical ties with Britain and Zanzibar.

Population

The 2020 population estimate is 5.04 million.

Muscat is the capital and largest city (797,000), followed by Seeb (237,816) and Salalah (163,140).

Popular industries

The top industries in Oman are oil and gas, cement, copper smelting, construction, fishing, tourism and mining.

Education

The Times World University Rankings includes one Omani university in the top 1,000 in the world.

The Legatum Prosperity Index ranks Oman 72nd within 167 countries.

Popular entity types

The most common type of business entities in Oman are Limited Liability Company, Wholly Foreign-Owned Limited Liability Company, Joint Stock Company, Free Zone Company and Limited Partnership.

The overwhelming majority of businesses are in the form of a Limited Liability Company.

Oman incentives for business

The new Foreign Capital Investment Law enacted in January 2020 relaxed foreign investment restrictions to encourage investment in the sultanate. Foreign investors no longer need an Omani partner. Additionally, 100% foreign ownership is now possible as shareholding caps have been removed.

The government has also streamlined registration procedures and introduced a flat fee of 3,500 OMR. However, Oman will restrict some activities according to a list the Ministry of Commerce & Industry has yet to publish.

The Sultanate of Oman does not levy personal income tax on residents or non-residents, including income from capital gains, wealth, death or property. However, foreigners may pay a flat rate withholding tax of 10 percent on specified payments.

The corporate tax rate is 15% for most businesses, with the exception of a 55% tax rate for those engaged in petroleum operations. Smaller companies may enjoy either a 3% tax rate of a tax exemption. The country does not impose foreign exchange restrictions or levies either.

History & Features

 

Main cities for business

Muscat is the capital and financial center of the country.

Popular historical & tourist attractions

Oman has a rich cultural history and many outstanding natural landscapes. It is home to five UNESCO World Heritage Sites including the ancient city of Qalhat, a major east coast port. It served as a trade link between Arabia, East Africa, India, China and South-East Asia between the 11th and 15th centuries.

The country was also known for the aromatic resin used in incense and perfumes: frankincense. The remains of the caravan oasis and frankincense trees can still be found highlighting the importance of this precious resin in trade from ancient to medieval times.

The city of Salalah transforms from desert terrain to a lush, green landscape with the annual monsoons. The area is known for banana plantations, waterfalls, the ancestral home of the reigning sultan, and The Frankincense Land Museum.

Bahla Fort is a mud-walled oasis in the Omani desert. This imposing structure was originally the capital city of the Banu Nebhan tribe and the center of Ibadism, a form of Islam, whose influence spread across Arabia, Africa and beyond.

The country also includes the desert expanse of the Wahiba Sands. Nomadic Bedu tribes still frequent the area. Their unique customs and traditions include elaborately embroidered clothing and imposing face masks for the women.

The limestone desert mountains of the Jebel Akhdar region offer spectacular views from the highest point in the country. This protected region is favored by hikers and receives just enough water to grow pomegranates, walnuts, apricots, black grapes and peaches. Residents also extract rose water and breed bees.

Much of Oman is unspoiled gorgeous beaches and small islands on the Arabian Sea. Masirah Island features swimming and exploring shipwrecks along the coast. The island also attracts visitors as more than 30,000 turtles hatch on the beach annually.

Most people don’t realize that Oman also has fjords. The Musandam Fjords on the northern tip of the Oman peninsula are equally spectacular, remote and teeming with wildlife.

No visit to Oman is complete without seeing Muscat. It is the capital city is and mixes modern architecture with buildings from antiquity. This teeming metropolis is surrounded by mountains and desert and includes the 16th-century Portuguese forts of Al Jalali and Mirani on the hilltops above Muscat Harbor.

The Sultan Qaboos Grand Mosque is clad in marble and includes a 50 meter dome and the second largest Persian carpet in the world.

History

Archeological evidence suggests humans lived in the region for millennia. The earliest known city is at least 9,000 years old.

From around the 6th century, great Persian dynasties ruled Oman from what is present-day Iran. Oman was among the first regions to convert to Islam. After the Prophet Muhammad’s death, a series of caliphates ruled Oman for centuries.

Later, Portuguese trading in the Indian Ocean region recognized the significance of Muscat as a prime port. They occupied the city in 1507. A sultan finally ousted the Portuguese in 1650.

By 1698, sultanate power had grown. The Imam of Oman expanded his territory and profited from the East African slave market.

Great Britain prohibited slavery in the mid-19th century leading to an Omani economic collapse and mass migration. When the ruling sultan died in 1856, Oman became two separate principalities. The coastal areas remained under sultanate rule and were cosmopolitan and secular. The interior areas were ruled by an imam, highly-religious and tribal. This arrangement became difficult with the discovery of oil in the 1950s.

The Muscat sultan dealt with foreign powers, but the oil was in imam-controlled areas. In 1959, the sultan captured the interior and after four years of fighting, united the country. However, this led to many uprisings throughout the country.

In 1970, a young sultan seized power from his father. He introduced economic and social reforms, but it wasn’t until the intervention of several foreign powers that the country attained peace in 1975. Modernization and change continued, however Arab Spring protests erupted in 2011.

Today, the country remains ruled under an absolute monarchy. The ruling sultan of Oman died early in 2020 without an heir. The royal family appointed a new sultan who has vowed to preserve Oman’s traditional policies of advocating peaceful coexistence. The country has a mixed market economy.

Other relevant facts

According to 2017 data, immigrants constitute about 45% of the total population. Besides Arabs, the largest ethnic groups include Baluchi, South Asian (Indian, Pakistani, Sri Lankan, Bangladeshi) and African.

Most Omani identify as Muslim (85.9%), followed by Christian (6.5%), Hindu (5.5%), Buddhist (.8%) and other or no religious affiliation.

Additional Information for Business

According to Forbes’ 2019 Best Countries for Business, Oman is 50th best country in the world for conducting business.

The 2019 Index of Economic Freedom rates Oman 88th globally and states, “A weak legal framework, subsidies, and other forms of favoritism to state-owned enterprises, however, continue to obstruct greater economic freedom.”

World Bank’s “Doing Business” rankings rate Oman 68th for ease of doing business in the world.

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