New law to spur in­vest­ments, job cre­ation Reg­u­lat­ing investment process

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The For­eign Cap­i­tal Investment Law is lead­ing to cre­ation of new investment av­enues in Oman, a num­ber of con­sul­tants and in­vestors have said.

The new law lifts re­stric­tion on the min­i­mum cap­i­tal limit for for­eign investment in a project. Ear­lier, the min­i­mum cap­i­tal limit was RO150,000 for own­er­ship in a project.

They said that the im­ple­men­ta­tion of the new law will lead to cre­ation of di­rect or in­di­rect job op­por­tu­ni­ties for Oma­nis. It will also curb hid­den trade and reg­u­late the labour mar­ket. The coun­try’s in­fra­struc­ture is ready to at­tract dif­fer­ent types of in­vest­ments. The penal­ties un­der the law are part of the reg­u­la­tory process.

Dr Ah­mad bin Ab­dul Karim al Houthi, a mem­ber of the Board of Di­rec­tors of the Oman Cham­ber of Com­merce and In­dus­try (OCCI), said, “The law is an im­por­tant re­quire­ment to at­tract more in­vest­ments. It was also needed to reg­u­late the investment process in­side the coun­try. It has a set of rules to reg­u­late the com­mer­cial and economic pro­cesses in­side the sul­tanate. The For­eign Cap­i­tal Investment Law is one of the laws to at­tract for­eign in­vestors. Other laws to do the same are Pub­lic and Pri­vate Part­ner­ship, Pri­vati­sa­tion, Investment and Bank­ruptcy. Also, there is a com­mer­cial ar­bi­tra­tion cen­tre. All th­ese fac­tors will help in­vestors in mak­ing de­ci­sions re­gard­ing in­vest­ments.”

Dr Houthi said that the ad­van­tages and in­cen­tives of the investment must be clear in the an­nexe to be is­sued later. “The sul­tanate is now pass­ing through a very im­por­tant stage. This has to be stud­ied prop­erly and the pos­si­bil­i­ties of in­creas­ing the in­cen­tives of­fered to in­vestors should be looked into.”

He said that the For­eign Cap­i­tal Investment Law will lead to the cre­ation of new en­ti­ties and op­por­tu­ni­ties for new in­vestors. “It will also reg­u­late the hid­den trade, which will ul­ti­mately lead to an in­vestor man­ag­ing his or her investment. This will also reg­u­late the labour mar­ket in cre­at­ing job op­por­tu­ni­ties for Oma­nis.”

Dr Houthi said that the sul­tanate has an in­fra­struc­ture which is none to any coun­try in the re­gion or even bet­ter than them. “There­fore, the law will help make the sul­tanate one of the most pre­ferred coun­tries for in­vest­ments. For for­eign cap­i­tal lim­its, in­vestors should re­alise that the sys­tem will con­tinue its mon­i­tor­ing process to en­sure real money is in­vested. There should be knowl­edge, ex­pe­ri­ence and tech­nol­ogy to help in­vestors from abroad. This as­pect of the for­eign investment must be taken care of.”

He said that the penal­ties un­der the For­eign Cap­i­tal Investment Law per se are huge. “They are not to in­tim­i­date the in­vestor, but to reg­u­late the work. I do not think that the leg­is­la­tion will re­sort to im­po­si­tion of penal­ties, ex­cept in cer­tain cir­cum­stances.

The law will reg­u­late the investment flow and en­able for­eign in­vestors to work freely in Oman which is a ba­sic re­quire­ment.”

Oman: Rich in nat­u­ral re­sources

Com­ment­ing on the new law, Dr Youssef bin Ha­mad al Balushi, chief ex­ec­u­tive of­fi­cer of the Smart Por­tal of Investment, said, “There is no doubt that investment in gen­eral and for­eign investment in par­tic­u­lar is very im­por­tant for any devel­op­ment process. Many coun­tries com­pete to at­tract for­eign in­vest­ments.”

Re­gard­ing the sul­tanate, Dr Balushi said there is an ur­gent need to ac­cel­er­ate the pace of at­tract­ing do­mes­tic and for­eign in­vest­ments. “This is re­quired due to the cur­rent growth stage. We have re­quired in­fra­struc­ture in place. There is now a leg­is­la­tion to en­sure transition and reap the fruits of huge in­vest­ments. It will also max­imise the ben­e­fits. The sul­tanate is among the na­tions which have lots of nat­u­ral re­sources. The pri­or­i­ties of devel­op­ment have changed from the be­gin­ning of the Re­nais­sance un­til now. The sul­tanate is ready to adapt to the changes within a short pe­riod.”

Con­tin­ued on

The law is an im­por­tant re­quire­ment to at­tract more in­vest­ments

Dr Ah­mad bin Ab­dul Karim al Houthi

Dr Balushi said that the Omani econ­omy is at a cross­road. “The thing it re­quires is well-stud­ied poli­cies and in­ter­ven­tions which should be si­mul­ta­ne­ous and con­sis­tent. In fact, the sul­tanate, with its wide com­mu­nity par­tic­i­pa­tion, com­pleted the for­mu­la­tion of the Oman 2040 Vi­sion. The vi­sion talks about in­ter­na­tional co­op­er­a­tion, at­tract­ing investment, ex­pand­ing the pro­duc­tion base, boost­ing ex­port and sup­port­ing en­trepreneur­ship. In fact, the launch of the Oman Vi­sion 2040 gave an op­por­tu­nity to move to a new phase and pat­tern of growth.”

He said that the do­mes­tic and for­eign di­rect investment is be­ing pro­moted due to sev­eral rea­sons. “The for­eign investment is the most im­por­tant engine for the next stage of change. It strength­ens Oman’s in­te­gra­tion with the world, leads to trans­fer of tech­nol­ogy and knowl­edge, opens mar­kets to achieve di­ver­si­fi­ca­tion and fi­nan­cial sus­tain­abil­ity and cre­ates job op­por­tu­ni­ties through in­no­va­tive ini­tia­tives.”

The CEO of the Smart Investment Por­tal said that the re­cent leg­isla­tive developmen­ts in the For­eign Cap­i­tal Investment Law were un­doubt­edly im­por­tant. “With­out them it was dif­fi­cult to at­tract for­eign in­vest­ments. Still, it is not enough be­cause there is huge com­pe­ti­tion be­tween coun­tries not only in the re­gion but in the en­tire world. Coun­tries are com­pet­ing in pro­vid­ing in­cen­tives to at­tract for­eign in­vest­ments. This is be­cause of the ben­e­fits it holds like in­flow of cap­i­tal, tech­nol­ogy and open­ing mar­kets. The most im­por­tant thing is to gen­er­ate jobs.

“Ev­ery­one should re­alise that the amend­ment of the leg­is­la­tion alone will not lead to ma­jor changes in at­tract­ing in­vest­ments, un­less it is com­pat­i­ble with struc­tural poli­cies and pro­grammes.”

Min­i­mum cap­i­tal re­quire­ment no more

Dr Adel al Miq­dadi, a for­mer as­so­ciate pro­fes­sor at the Law Fac­ulty of Sul­tan Qaboos Univer­sity and a lawyer and le­gal ad­viser at the of­fice of Dr Ahmed Said al Jah­wary Law Firm and Le­gal Con­sul­ta­tions, said, “The For­eign Cap­i­tal Investment Law (No 50/2019) is con­sid­ered one of the im­por­tant laws as it re­placed the pre­vi­ous law (No 102/1994). This law has many ad­van­tages which were not in the pre­vi­ous law.”

He said that the new law al­lows a for­eign in­vestor to own the project alone or in as­so­ci­a­tion with a for­eign in­vestor or in as­so­ci­a­tion with an Omani. “The law does not re­strict the for­eign in­vestor to have min­i­mum cap­i­tal limit in a project. Ear­lier, the limit was RO150,000 for their own­er­ship in a project. The new law has sev­eral other ad­van­tages and in­cen­tives. It ex­empts for­eign investment from tax and cus­toms du­ties and has many pro­ce­dures to make the investment process smooth.

“If the in­vestor takes ad­van­tage of the ben­e­fits un­der the new law, he will be able to ob­tain tax ex­emp­tion and ex­emp­tion from cus­toms fees when im­port­ing items. It can have long-term ben­e­fits of in­vest­ments. They also have the right to repa­tri­ate the investment project’s cap­i­tal, prof­its and funds to his coun­try af­ter liq­ui­da­tion of the project.”

Pho­to­graph for il­lus­tra­tive pur­pose only

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