Guidance

Overseas business risk: Oman

Updated 9 March 2021

See below for information on key security and political risks which businesses may face when operating in Oman.

1. General Overview

The bilateral relationship between the Sultanate of Oman and the United Kingdom is close with a long history. Many senior Omani business and political figures were educated in the UK and consider it their second home. Business ties are strong. The UK is the largest source of Foreign Direct Investment (FDI) in Oman by far, accounting for nearly 50% of total FDI according to Omani statistics. While Oman may not be an attractive market to all UK businesses there is a strong appetite in Oman to see more trade with the UK particularly those companies with good quality, price competitive goods and services.

Oman is a stable country in a sometimes difficult neighbourhood. It experienced impressive levels of development since Sultan Qaboos bin Said began his reign in 1970 and underwent a peaceful transition when Sultan Haitham bin Tariq came to power in January 2020.

The Omani government aims to capitalise on its strategic location with large scale infrastructure developments, including the ambitious Special Economic Zone in the southern town of Duqm, a few miles from major Indian Ocean shipping lanes.

Within the Gulf Cooperation Council (GCC), Oman is the second largest country by landmass (roughly the size of the UK and the Republic of Ireland combined) and third largest by population. The December 2020 census showed a population of nearly 4.5 million people, of which 1.7 million were expatriates. There are approximately 3,000 British nationals in Oman (February 2021). Arabic is the official language with English widely spoken.

2. Politics

Sultan Haitham bin Tariq has announced that his top priorities are economic reform and diversification which have become more pressing since the drop in oil prices and impact of COVID-19. He has also pledged to continue his predecessor’s approach to foreign policy.

The Basic Law, Oman’s Constitution, was published on 11 January 2021, replacing the 1996 Basic Law. The Basic Law sets out the system of government, provisions for legal and political systems and provides a blueprint for future economic development.

Addressing youth unemployment remains a significant challenge. The Omani government’s aims through ‘Omanisation’, to replace many expatriate workers with equally qualified Omanis. If not introduced gradually, there is a risk that this could lead to talent flight with expatriate expertise leaving causing a potential vacuum.

3. Economics

In the World Bank “Doing Business 2020” report, Oman climbed ten places to 68th out of 190.

Oil and gas wealth has given Oman prosperity. This has largely been invested into social development and modern infrastructure. Nominal GDP in 2019 was $76.33 billion when GDP per capita was $15,343. The massive fall in oil prices, between mid-2014 and December 2015 ($115 to under $35) was a shock for the Omani economy and it never fully recovered. It was then further hit by low oil prices in 2020 and the impact of the coronavirus pandemic. Oman’s budget deficit for 2020 was estimated at OMR2.2 billion (approx. $5.72 billion).

Oman’s main economic goals are set out in its long-term strategy, “Oman Vision 2040”, launched in January 2019 and in its next five-year plan 2021-25. Primarily these are diversification of the economy away from its reliance on hydrocarbons (identifying targeted sectors: fisheries, logistics, manufacturing, mining and tourism), attracting increased foreign direct investment and creating employment for Omanis.

There are significant challenges ahead. VAT will be introduced in April 2021 and utility subsidy reductions at a later date. Further reforms will be needed and it will be important these are communicated well to the public.

4. Business and Human Rights

All foreign workers are dependent on their employers for residency rights and are subject to a sponsorship system.

The Omani Labour Law provides protections to citizens and expatriates (excluding domestic workers) and includes recognition of women’s rights, such as maternity leave; anti-discrimination rules; and a framework for the resolution of labour disputes. No one is allowed to work more than 9 hours in a day, unless by mutual agreement, or more than 45 hours in a week.

Businesses face increased difficulty in getting work visas for expatriate workers, with a concerted effort to secure jobs for Omani nationals including more occupations reserved for Omani nationals (‘Omanisation’).

There is a minimum wage requirement for expatriate workers to secure residence visas for their families to join them.

5. Bribery and Corruption

Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.

In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.

According to the 2020 Transparency International’s Corruption Perception Index (CPI) Oman ranks 49th out of 180 countries.

In January 2014, Oman joined over 120 other countries by acceding to the United Nations Convention Against Corruption (“UNCAC”).

Read the information provided on our Bribery and corruption page

6. Terrorism and Security

For up-to-date information please consult the FCDO’s current travel advice for Oman

Read the information provided on how to reduce your risk from terrorism abroad.

7. Intellectual Property

Through its participation in key international treaties, conventions, and protocols, and its implementation of domestic laws, Oman has enacted a comprehensive regime for the protection of intellectual property rights. These laws range from the procedural (how to register trademarks and names) to the substantive (the civil and criminal penalties for a breach).

It is difficult to determine what, if any, protection Oman offers to unregistered intellectual property. Accordingly, registration is critical to IPR protection and enforcement.

Read the information provided on our Intellectual Property

8. Organised Crime

Read the information provided on our Organised crime page

9. Government support

The government can provide finance or credit insurance specifically to support UK exports through UK Export Finance – the UK’s export credit agency. For up-to-date country specific information on the support available see UK Export Finance’s country cover policy and indicators.

10. Further information

For further information, please see the Department for Business and Trade’s (DBT) export guide for Oman.

11. Contact

Contact the DBT team in Oman for more information and advice on opportunities for doing business in Oman.