Oman is undergoing a remarkable economic transformation, positioning itself as a vibrant hub for foreign direct investment (FDI) in the Middle East. Driven by a progressive government and a strategic vision for economic diversification, the Sultanate of Oman is cultivating a thriving business ecosystem that presents exciting opportunities for both local and international players. This transformation has been particularly evident in the last 5 years, with significant strides made in various areas.
Oman has made significant progress in digitising its economy and government services. The launch of the National Digital Economy Programme has accelerated the adoption of digital technologies across various sectors. A key achievement in this endeavour was Oman achieving 53% of its government digital transformation target by September 2023, with 1,545 services digitised.
Furthermore, Oman has made significant strides in diversifying its economy away from oil dependence. Focus has been placed on sectors like tourism, logistics, manufacturing, and renewable energy.
A key achievement in this regard is the strong recovery witnessed in the tourism sector in 2024, with 2 million visitors by mid-year, representing a 5.2% increase from 2023. Moreover, Oman has implemented several reforms to improve the ease of doing business, including streamlining business registration processes and enhancing investor protection.
Significant investments in infrastructure projects, including new ports, airports, and road networks, have improved connectivity and facilitated trade. The new Muscat International Airport Freezone and the expansion of Salalah Port serve as prime examples of Oman's enhanced logistics capabilities.
Oman has made significant strides in attracting foreign direct investment (FDI) in recent years.
The country's efforts to diversify its economy and improve its business environment are yielding impressive results. Recent statistics from the National Center for Statistics and Information highlight Oman's success: by the end of Q1 2024, FDI in Oman reached RO 25.38 billion, marking a 19.3% increase compared to the same period in 2023 (RO 21.27 billion). This growth underscores the increasing attractiveness of Oman's investment landscape. The "Invest Oman" Lounge, launched in January 2023, has become a cornerstone of Oman's FDI strategy, securing 29 investment projects worth RO 1.2 billion, with an additional 59 projects valued at RO 3.2 billion currently being processed. Key sectors attracting investment include industry, renewable energy, and healthcare. One standout project is the polysilicon factory in the Sohar Free Zone, with an investment exceeding RO 520 million and an expected opening date in 2025. This project exemplifies Oman's push towards high-value industrial investments.
Oman has implemented several measures to simplify the investment process, including a one-stop shop in the form of the "Invest in Oman" hall, which brings together 15 government institutions, allowing investors to complete all procedures in one location.
Additionally, the Oman Business Platform offers about 50 electronic services, facilitating business setup and operations. A new artificial intelligence-powered KYC service enables foreign investors to register and start businesses remotely.
The Foreign Capital Investment Law of 2019 marked a significant step forward by allowing 100% foreign ownership without capital proof requirements, with an evaluation after the first year ensuring compliance with conditions. Oman has also developed a comprehensive approach to attract investors, publishing an Investment Incentives Guide covering various sectors and economic zones and implementing the "Tas'eera" project, reducing fees for 137 services and eliminating fees for 20 services. These initiatives aim to balance fiscal policy with the goals of Oman Vision 2040, which emphasizes private sector empowerment and foreign investment attraction.
Oman is targeting six primary sectors for investment: mining, tourism, agriculture, manufacturing, Information Technology, and renewable energy. This diversified approach aims to reduce dependency on oil and create a more sustainable economy. Leading economies investing in Oman include China, India, UK and Egypt.
These nations are contributing significantly to Oman's growing FDI inflows. Oman has also established a National Negotiation Team to handle strategic investment projects. This high-level team negotiates terms for projects that enhance economic diversification, offers tailored incentives based on local added value, and uses international best practices and a national priority project matrix for decision-making.
Oman is dedicated to improving its business environment. The Oman Business Platform streamlines processes with 50 electronic services, and investment laws and regulations are updated regularly. Oman's efforts have been recognised internationally, with improvements in global rankings for ease of doing business. Its strategic location, improving business environment, and commitment to economic diversification make it an attractive destination for foreign investment. Standard & Poor's upgraded Oman's credit rating to BBB-, indicating a safe investment environment.
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