Since 1996
U.S.-Oman RELATIONS
Oman actively seeks foreign investment and is in the process of improving the framework to encourage such investments. Oman promotes higher education, manufacturing, healthcare, and tourism as areas for investment. Investors transferring technology, developing management expertise, and providing training for Omanis are particularly welcome. The Omani Center for Investment Promotion and Export Development (OCIPED), is tasked with attracting foreign investors and smoothing the path for business formation and private sector development. OCIPED also provides prospective foreign investors with information on government regulations, which are not always transparent and sometimes inconsistent. Although the Ministry of Commerce and Industry (MoCI) and OCIPED have established a ‘one-stop shop’ for government clearances, the approval process for establishing a business can be slow, particularly with respect to labor requirements. Further, there is a marked difference between approvals given to majority Omani companies, which tend to proceed at a quicker pace than to an American company. Some Omani business people report being able to obtain approval within three days, while American applicants tell of up to eleven-month delays.
With the implementation of the U.S.-Oman Free Trade Agreement on January 1, 2009, U.S. firms may establish and fully own a business in Oman without a local partner. U.S.-Oman FTA commitments have increased opportunities for U.S. financial service providers, as well as cross-border service providers in the areas of communications, express delivery, computer-related technologies, health care, and distribution, among others. Other (i.e., non-U.S.) majority foreign-owned entrants are barred from most professional service areas, including engineering, architecture, law, and accountancy. Although U.S. investors are provided national treatment in most sectors, Oman has an exception in the FTA for legal services, limiting U.S.-ownership in a legal services firm to no more than seventy percent.
The Foreign Capital Investment Law (Royal Decree No. 102/94) provides the legal framework for non-U.S. and non-GCC foreign investors. Oman amended this law in 2000 as part of its WTO accession and in 2009 to implement the U.S.-Oman Free Trade Agreement. For most investments the law requires that there be at least 30% Omani ownership. There are exceptions; notably wholly foreign-owned branches of foreign banks are allowed to enter the market. Investors may also obtain approval by the Ministerial Cabinet to allow a 100% foreign-owned business entity.
Aside from ensuring that the investor satisfies the legal requirements for entry into the market, Oman does not screen foreign investment. If a concern were raised regarding a particular investor’s entry into the market, the MoCI would be the government body tasked with reviewing the proposed investor.
Oman has privatized some parastatals and is in the process of privatizing others, but maintains government dominance in several sectors. The most successful privatization program to-date has been the electricity and desalination privatization program. The telecommunications sector has also been increasingly privatized. In 2004 the Qatari firm Qtel and the European telecommunications company TDC partnered with several prominent Omanis to form the first privately-owned telecommunications firm in Oman, Nawras Telecommunications Company. Nawras was the first private company to obtain a license to build their own telecommunications network and provide telecommunications services. In September 2010, Narwas launched its initial public offering, which has been positively received. The recent global recession has slowed Oman’s privatization process. The bidding process on state enterprises entering the private market is frustrated as potential investors are unable to obtain reliable dates for announcements of sales and responses to inquiries. The delays are generally not associated with corruption; Oman ranked 41 out of 178 in Transparency International’s 2010 Corruption Perception Index.
Industrial establishments must be licensed by MoCI. In addition, a foreign firm interested in establishing a company in Oman must obtain relevant approvals from other ministries, such as the Ministry of Environment and Climate Affairs and organizations such as the Oman Chamber of Commerce and Industry. Foreign workers must obtain work permits and residency permits from the Ministry of Manpower and the Royal Oman Police - Immigration. To speed the approval process, MoCI created a “one-stop-shop” where representatives from relevant ministries are present to receive inquiries, forms, and applications.
Oman has a flat tax of 12% for all businesses the first $78,023 in profits is tax exempt. Foreign airlines and shipping companies are completely exempt from taxation based upon reciprocal treatment by foreign governments. Higher education institutes, private sector schools, training institutes, and private hospitals are also tax exempt.
Commercial law in Oman is continually evolving. Although the judicial process is slow, business contracts are generally enforced. According to the 2011 World Bank Ease of Doing Business Report, it takes an average of 598 days to enforce a business contract. Oman is ranked 57 in the World Bank’s Ease of Doing Business Report 2011. Insolvency laws are nascent, at this time allowing only for complete dissolution rather than restructuring. Many businesses opt to simply shut their doors rather than go though the insolvency process, which can take up to four years. Oman recently adopted an eCommerce law although it has yet to be tested in the court system.
Oman has almost no Relation in the field of American Political Art and Anti Terrorism Political Art and rarely supported Countries Relation Political Art in U.S.- Oman Relation which is represented in Art.
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