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Read NowIzabella Szadkowska - Partner - Corporate Structuring / Corporate Services / Corporate / Mergers and Acquisitions / Capital Markets / Family Business
November 2013
Oman’s interest in establishing free zones dates back at least a decade. Oman initiated the creation and development of economic free zones with the enactment of Royal Decree 56 of 2002 (concerning establishment of free zones in Oman) (“Free Zones Decree”).
Companies operating in such free zones are not subject to certain Omani law requirements.
Furthermore, under the Free Zones Decree, such companies are exempt from:
The Free Zones Decree resulted in the establishment of three free zones:
In this article we provide an overview of each of these free zones.
SOHAR ZONE
Legal Foundations:
The Sohar Zone was established under H.M. Sultan Qaboos Royal Decree 123 of 2010 (“Decree”). In accordance with the Decree, the Sohar Zone is managed by Sohar Industrial Port Company SAOC and operated by its subsidiary, Sohar Free Zone Company LLC (“SoharCo”).
Sohar Free Zone Law, issued under the umbrella of the Free Zones Decree, governs business operations carried out in the Sohar Zone.
Location:
The Sohar Zone is located at Sohar in the Batinah Region of Oman, near Sohar Industrial Port and as such within an easy reach of Muscat (about 200 km away), Dubai (about 180 km away), Abu Dhabi and Al Ain ports, KSA ports and those of the Indian subcontinent.
Permitted Activities:
The following business activities can be conducted in or from the Sohar Zone:
Why It’s Worth Considering
Apart from the general benefits set out under the Free Zones Decree, Sohar Zone businesses can benefit from:
Licensing Considerations:
A business that wishes to operate in the Sohar Zone needs to apply to SoharCo for a license to be registered as:
SoharCo acts as a “one stop shop”, arranging all required administrative permits and approvals from other Omani administrative (public or governmental) authorities.
The license requires annual renewal. Should the license applicant be required to obtain a special permit (e.g. in order to execute civil works on their plot of the leased land, outside the plot within common areas e.g. laying a pipeline or transport some goods), it shall apply to SoharCo for the relevant permit and obtain the same before commencing any such works.
Licensing Process:
For service providers there is no formal licensing process, but for Sohar Zone LLCs the licensing process entails the following stages:
SALALAH ZONE
Legal Foundations:
The Salalah Zone was established under Royal Decree 62 of 2006, issued under umbrella of the Free Zones Decree. It has been further governed by the Implementing Regulation No. 1 of 2006.
Location:
The Salalah Zone is situated on the south east of the Arabian Peninsula, on the import – export sea route between the MENA region and Asia.
Salalah is home to one of the largest deep water ports in the world.
Permitted Activities:
The following business activities can be undertaken from or in the Salalah Zone:
Why It’s Worth Considering:
Apart from the general benefits set out under the Free Zones Decree, Salalah Zone businesses can benefit from the no minimum capital requirement.
Licensing Considerations:
A business that wishes to operate in the Salalah Zone needs to apply to the Salalah Zone for one of the following licenses:
A Salalah Zone entity can be set up as an establishment, a company, a branch of a local or foreign business.
ALMAZ ZONE
Legal Foundations:
The Almaz Zone was established under Royal Decree 103 of 2005. It is further governed by Decision No. 22 of 2010 (Issuance of Regulation Organising Al Mazyounah Free Zone).
Location:
Almaz Zone is located in Oman’s southern region of Dhofar, only 4 km away from the Yemeni border, 14 km away from Shahn City, Yemen.
Permitted Activities:
The following business activities can be carried out from Almaz Zone:
Why It’s Worth Considering:
Apart from the general benefits set out under the Free Zones Decree, Almaz Zone businesses can benefit from:
Conclusion
There are many reasons to come to Oman. For many their first thought may be the alluring activities for visitors, including shopping at the Muscat Gold Souk, enjoying a walk by Mutrah Corniche or having a dinner at Shangri-La Barr Al-Jissah Resort & Spa. There are however equally alluring business opportunities, particularly with the free zones described above, whose purpose is to enable local and international businesses to flourish.
For those who want to see their business grow but also enjoy a little peace and quiet and the camaraderie of a tight-knit expat community, Oman it is.
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