Tax Alert: New Foreign Capital Investment Law to attract investments in Oman
New Investment Law to attract investments in Oman
The FCIL became effective from January 2020.
The authorities have started evaluating foreign investments for approval in setting up 100% foreign owned companies in Oman under the new Foreign Capital Investment Law (FCIL) (RD 50/2019). The FCIL became effective from January 2020. This flash sets out current practices emerging and the key features of the FCIL as under:
- 100% foreign investment (previously 70%) is allowed for all activities except those to be specified in the negative list by the Executive Regulations (ER).
- The ER are expected to be released by July 2020. The ERs will also provide further details about the operational aspects of the FCIL.
- Based on our understanding of current practice at the Ministry of Commerce and Industry (MoCI), only a limited set of activities are in the negative list. Most of these prohibited sectors cater to the indigenous and small-scale industry like translation, taxi operation and fishing. The negative list is expected to continue to be updated till the ERs are issued.
- It is also understood that the minimum share capital requirement (of OMR 150,000, approximately USD 389,000) under the previous FCIL, is no longer required. It would be advisable to reconfirm this with MoCI on a case-by-case basis.
We believe the new FCIL marks a momentous liberalization in the history of the Sultanate. It strongly emphasizes commitment to create a robust and attractive investment environment for businesses and foreign investors. The new FCIL, together with the new Commercial Companies Law, the Privatization Law, the Public Private Partnership Law and the Bankruptcy Law, is expected to spur investment, drive economic growth and generate employment.
We, at KPMG In Oman, have a dedicated and experienced team for advising on matters relating to inbound investment, company set-up, representation before authorities and tax policy. We would be pleased to provide further detail on this legislation.
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