Move to create level playing field for Oman’s free zones

MUSCAT, JULY 14 - Authorities in the Sultanate have embarked on efforts designed to ‘level the playing field’ for the four free zones in operation at strategic locations around the country. The underlying objective, say officials, is to enhance their overall investment appeal, given their importance to the government’s strategic goal of securing a place for Oman among the world’s Top 10 logistics-friendly destinations. Overseeing the delivery of this initiative is the Implementation Support & Follow-up Unit (ISFU), a task force set up under the auspices of the Diwan of Royal Court to ensure the timely realisation of a number of projects proposed by Tanfeedh — The National Programme for Enhancing Economic Diversification. “This initiative is focused on standardising policies and regulations that aim to improve the attractiveness of investment in the free zones. The initiative intends to boost the business environment, reduce government costs and improve free zone promotional schemes. The primary goal is to improve regulations and have clarity on Omanisation rates, licence and permit issuance procedures,” the ISFU said in an update on its follow-up efforts. Oman’s four free zones — at Suhar, Duqm, Salalah and Al Mazyounah (on the border with Yemen) — offer a range of incentives to attract investment into their respective hubs, including an option to own 100 per cent of project equity. Incentives and regulations somewhat vary from one zone to the other, although each hub banks on its own value proposition to attract investment. A level playing field for the nation’s free zones entails three key pillars: (i) All four free zones will have a common portal for marketing with prospective investors given a single interface to access information on all the free zones (ii) The free zones will be empowered with full rights to issue any permits or licenses, and (iii) Omanisation requirements will be streamlined for all free zones, the Report added. Significantly, by achieving a level playing field for all the free zones, authorities are eyeing a minimum 15 per cent growth in annual investment inflows into each zone. This target is set as a Key Performance Indicator (KPI) in meeting the longer-term goal of giving all of Oman’s free zones an equal chance to succeed. A consultant has also been appointed to undertake a feasibility study and chart out a roadmap to achieve this KPI. “This KPI will continuously focus on increasing the committed investment from all free zones by implementing five sub projects (anchor customers identified as per industry focus of free zones; implementation of brand proposition at a country level and easing and promotion of visa requirements),” according to the ISFU Report. “The objective of this KPI is to measure key milestones in marketing and regulatory environment that will empower free zones to increase their competitiveness and provide more value for their customers. It also proposes to measure the level of streamlined operational practices in the free zones that enable economies of scale benefit from operation and cooperation,” it stated. Participating in this initiative are a number of government and public sector stakeholders, notably the respective free zone authorities, Ministry of Commerce and Industry, Royal Oman Police (Customs), Ministry of Manpower and Ministry of Legal Affairs. Conrad Prabhu