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Oman: New Foreign Capital Investment Law - List of prohibited activities

30 December, 2020

In brief

The new Foreign Capital Investment Law (the New FCIL) was published last year, in July 2019, and became effective from 1 January 2020. The New FCIL has significantly relaxed the rules and restrictions on foreign investment, streamlined the registration and licensing procedures for foreign investors and aligned foreign investors’ rights and incentives to those given to local investors. 

One of the biggest changes in the New FCIL was allowing 100% foreign ownership in number of sectors.

In detail

In June 2020, the Ministry of Commerce and Industry, Oman (MOCI) issued the Executive Regulations of the new FCIL, specifying provisions in relation to registration of the foreign investment projects, benefits available to specified projects, allocation of land for investment purposes and inspection of the projects by the competent authority, etc.

In December 2020, The Minister of Commerce, Industry and Investment Promotion (MOCIIP) - formerly MOCI - issued Ministerial Decision (MD) No. 209/2020 determining the list of activities which foreign investors are prohibited from engaging in, limiting them to Omani investors in order to protect national products and entrepreneurship projects.

According to the decision, an Omani investor can practice investment in all activities and enter a partnership with a foreign investor. An exception to the prohibited list can be granted only with express written permission of MOCIIP, which we believe will be very rare in practice.

List of Prohibited Activities

The MOCIIP 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 that foreign investors are prohibited from engaging in are detailed as under but most of the activities are such activities which are very less likely to be of any great interest by any major international investor.

Further, we also note that prohibition of retail fuel sales would restrict any further liberalisation of the retail fuel market, unless MOCIIP will consider granting exception approvals for allowing foreign investment in such activities. The process for granting exception approval has not been laid in the MD and we understand this will be considered on a case by case basis.

Further, restriction on shipping and unloading of goods can be interpreted very broadly and it will remain to be seen how it is interpreted in practice by the MOCIIP, unless any further clarification is issued.

Finally, the reservation of drinking water to Omani investors - which is generally considered as a lucrative business opportunity - will cut off the competition from foreign investors who will no longer able to access this supply.

No   

Type of activity

Code

1

Making Omani sweets (Halwa)

107305

2

Tailoring, sewing and knitting Arab men's clothes

141004

3

Tailoring, sewing and knitting men's clothes

141005

4

Tailoring, sewing and knitting women's clothes

141006

5

Tailoring and sewing sportswear

141007

6

Tailoring and sewing military clothes

141008

7

Making and tailoring the Omani cap (Kimmah)

141010

8

Tailoring and sewing women's abayas 

141011

9

Omani Khanjar (daggers) Industry

259311

10

Transporting and selling drinking water

360003

11

Repairing vehicles electricity and charging batteries

452003

12

Repairing and cleaning vehicles radiator and cleaning

452004

13

Tires and wheels repairing 

452005

14

Vehicle Repairing

452006

15

Vehicle Car wash and lubrication

452007

16

Oil change for vehicles

452008

17

Repair of car air conditioners

452009

18

Repair of exhaust for cars and vehicles

452010

19

Car cleaning and polishing

452011

20

Wholesale of fruits and vegetables

463001

21

Wholesale of cooking gas

466103

22

LPG filling stations

466104

23

Retail sale of fresh fruits, vegetables and dates

472101

24

Retail sale in specialized stores for honey

47108

25

Vehicle fuels filling Stations

473001

26

Diesel fuel filling stations

473005

27

Retail sale of phones and its accessories

474101

28

Retail sale of mobile phones and its accessories

474106

29

Retail sale of souvenirs, antiques and paintings

477304

30

Retail sale of flowers and natural plants

477305

31

Retail in specialized stores for pottery and handicrafts

477312

32

Retail in specialized stores for the sale of cooking gas

477313

33

Retail in specialized stores for silver and gifts

477323

34

Retail sale of communication service cards

477324

35

Retail in specialized stores for traditional weapons

477327

36

Retail in specialized stores for animal food

477334

37

Retail in specialized stores for bags

477337

38

Retail in specialized stores for wedding supplies

477340

39

Retail in specialized stores for fireworks

477347

40

Retail in specialized stores for Omani khanjars

477348

41

Retail in specialized stores, empty gas cylinders

477351

42

Retail in specialized stores for wedding cards

477353

43

Retail sale in specialized stores for artisanal products

477355

44

Retail in specialized stores for apiaries supplies

477356

45

Transport of pilgrims and Umrah performers

492203

46

Land transport by trucks of cooking gas cylinders

492306

47

Shipping and unloading of goods

522401

48

Customs clearance offices

533901

49

Valuation of canceled vehicles

662102

50

Commission insurance agent

662901

51

Real estate brokerage (brokerage offices)

682001

52

Labor recruitment offices

781001

53

Employment offices

781002

54

General cleaning of buildings

812100

55

Copying services and printing of documents

821902

56

Trackback offices

829902

57

Neon sign installation and assembly

829906

58

Managing and operating fuel stations

841304

59

Driving education

854903

60

Specialized rehabilitation centers

872001

61

Homes for the elderly

873002

62

Orphanages

879001

63

Rehabilitation House

879003

64

Another activity for libraries and archives

910199

65

Washing all kinds of clothes and textiles, except for those that are held in tourist establishments

960101

66

Ironing clothes, except for what is set up in tourist facilities

960103

67

Steam washing and ironing clothes (dry washing), with the exception of what is set up in tourist facilities

960104

68

Hair cutting, hairdressing and shaving for men, except for those that are held in tourist facilities

960201

69

Hair styling and beauty types for women

960202

70

Children cut, hairdresser and shave, except for those that are held in tourist facilities

960203

The Takeaway

With the list of prohibited activities mostly containing activities which are less likely to be of interest to international investors, and Oman continuing to improve its ease of doing business, it remains to be seen how additional inbound investment is generated with these renewed measures, which will also help generating local employment.

Contact us

Omar Al Sharif

Oman Country Senior Partner, PwC Middle East

Tel: +968 2455 9118

Darcy White

Partner, Oman Tax Leader, PwC Oman

Tel: +968 2455 8154

Gaurav Kapoor

Tax Director, PwC Middle East

Tel: +968 2455 8180

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