Oman Restricts Foreign Investment In 28 New Sectors To Boost Local Enterprises

The Ministry of Commerce, Industry and Investment Promotion has issued Ministerial Decision No 435/2024. This decision amends certain provisions of Ministerial Decision No 209/2020, which lists activities restricted to Omani investors only, prohibiting foreign investment in these areas.

The decision aims to balance attracting qualitative investments with encouraging entrepreneurial projects. It aligns with the government's priority to empower small and medium enterprises (SMEs) that enhance the Omani economy. The decision serves as an incentive for Omanis to establish their own businesses and create new job opportunities for citizens.

The newly prohibited activities include the production of handicrafts by distilling flowers and herbs, production of frankincense water and oil, leather handicrafts, palm leaf handicrafts, wood handicrafts, traditional handmade cosmetics and perfumes, pottery and ceramics, stone and gypsum handicrafts, silver handicrafts, copper and metal handicrafts, aluminum handicrafts, traditional fishing tools, bone-derived handicrafts, and production and preparation of incense.

Newly Prohibited Activities

The decision added 28 activities to the list reserved for Omani investors only. This takes the total number of such activities to 123. Article 2 of the ministerial decision stated that any provision contradicting this decision is nullified. The list will be updated according to circumstances of each phase to keep pace with economic developments.

Article 3 confirmed that the decision would take effect the day after its publication. Existing investment projects at the time of its implementation are excluded from this rule. These projects cannot be transferred to others without written approval from the Minister of Commerce, Industry and Investment Promotion or his delegate.

Exclusions for Existing Projects

Omani investors are allowed to invest in all activities where foreign investment is prohibited. The decision also seeks to provide opportunities for Omani-owned SMEs in these sectors. It ensures that projects related to national identity and Omani heritage are not affected.

The newly prohibited activities also include skin care services, event and furniture rental, retail in specialised stores for construction scrap materials (including scrap iron trade), retail in specialised stores for drinking water (excluding production and transportation), cultivation of plants for decoration and seedlings (nurseries), sale of used vehicles, mobile cafes, freshwater aquaculture, mailbox rental services, public scribe services, Sand Services Centre, management and operations of liquefied petroleum gas filling stations (cooking gas), collection of used batteries and oils, and grocery stores.

This decision aligns with Article 14 of the Foreign Capital Investment Law issued via Royal Decree No 50/2019. It aims to provide a conducive environment for local businesses while ensuring foreign investments are directed towards sectors beneficial for economic growth without overshadowing local enterprises.

The ministerial decision reflects a strategic move by Oman’s government to foster local entrepreneurship while regulating foreign investments in specific sectors. This approach is expected to bolster the domestic economy by creating more opportunities for Omani nationals in various industries.