Oman Free Trade Zones: Introduction
Oman Free Trade Zones are easy to start a business in with Tetra Consultants’ assistance.
Tetra Consultants will first understand your corporate activities, free trade zone requirements, and long-term motives, before making a recommendation on the most suitable type of free trade zone for you. We will also guide you through the free trade zone requirements and regulations of each of these Oman Free Trade Zones and how you can incorporate your company in your selected free trade zone in Oman.
Currently, Oman has 3 Free Trade Zones (Al Mazunah Free Zone, Sohar Free Zone, and Salalah Free Zone) and 2 Special Economic Zones (Duqm Special Economic Zone and Knowledge Oasis Muscat Special Economic Zone).
Why set up company in Oman Free Trade Zones?
- Companies established under the Oman Free Trade Zones and Special Economic Zones benefit from tax exemptions and commercial incentives, such as:
- 100% foreign ownership.
- No customs duties levied on imported and re-exported goods.
- No personal income tax for employees.
- Competitive incentives and advantages from Oman’s multiple free-trade agreements signed with strategic economies such as Europe, the United States, Singapore and the Gulf Cooperation Council.
- Each Oman free trade zone can enjoy advantages from specialized zones and clusters that each focus on a different industry.
- Each Oman free trade zone caters and is tailored to the particular infrastructural needs of its industry of focus. At the same time, they can facilitate better business opportunities across the value chain.
- The country has decent international ties with other nations in the regions, access to regional markets, and internal political stability.
- Oman has also invested USD 26 billion in new infrastructure for the maritime, aero, road and rail sectors.
Al Mazunah Free Zone
- Al Mazunah Free Zone was established in 1999 as the first of its kind in the Sultanate, Al Mazunah Free Zone is located in Oman’s southern governorate of Dhofar, close to the Yemeni border. It occupies around 4.5 million hectares.
- Businesses set up in the Al Mazunah Free Zone will not have to fulfill the free trade zone requirements of a minimum amount of paid-up capital and will not have to pay custom levies on imports. Investors are also entitled to lower rates of Omanisation, at 20%, and can have a tax holiday for 3 decades.
- Yemeni nationals who wish to work in Al Mazunah companies are not required to have an entry visa or permanent residence permit in Oman.
- The Al Mazunah free trade zone offers numerous business dimensions to the business owners, which involves commercial sector, light industrial sector and assistance service sector.
- Some examples of facilities provided to facilitate business activities include high-end connectivity, supporting services for faster and smooth communication, qualified industrial safety and security, provision for free zone residency staff with official residency cards and flexibility to open a representative office.
Sohar Free Zone
- Since its establishment in 2010, Sohar Free Zone has become one of the GCC’s largest and most successful industrial zones, together with the Sohar Port there is a combined investment of over USD 27 billion.
- It boasts a strategic location, with modern highways connecting major cities such as Muscat, Dubai and Abu Dhabi. It is close to Sohar and Muscat Airport.
- The nearby Sohar Port is found near the Straits of Hormuz. It is subject to lowered freight prices and insurance premiums for businesses looking for competitive opportunities.
- This free trade zone issues licenses such as general trading, logistics, light manufacturing, industrial and service providers.
- The Freezone’s One-Stop-Shop initiative offers the opportunity to set up operations quickly and efficiently, which shortens the business set up process.
- Businesses that set up here can enjoy free trade zone benefits, such as exemptions from tax duties on the import and export of goods, exemptions from personal income tax, no compulsory amount of minimum share capital to meet, full foreign ownership, and a tax holiday from corporate tax rates for up to 25 years.
- For the first decade after the business completes its incorporation process, it can enjoy a much lower Omanisation rate of 15%.
Salalah Free Zone
- Salalah Free Zone is situated adjacent to Salalah Port and has access to an international airport. It is also positioned a distance from the Straits of Hormuz, allowing it to be subject to lower freight prices.
- It is found very near sources of raw materials and growing markets, and has one of the lowest prices in the region for utilities, infrastructure and manpower.
- Companies set up here will be able to enjoy tax exemptions and import duty exemptions on most agricultural, industrial and consumer goods due to the Free Trade Agreement signed between Oman and the United States.
- The key sectors in this free trade zone are Chemical and Material Processing, Manufacturing and Assembly, and Logistics and Distribution.
- Licenses offered by Salalah Free Zone are General Trading, Trading, Industrial and Service license.
- Benefits of company formation in Salalah Free Zone includes 100% foreign ownership, relaxed Omanisation rate of 20%, no custom duties and a 30-year tax-holiday.
Duqm Special Economic Zone
- Duqm Special Economic Zone is located in Al Wusta Governorate in the center of the Sultanate of Oman, at a distance of 550 square kilometers from the capital Muscat.
- It is the largest special economic zone in the Middle East and North Africa, with an area of 2,000 square kilometers.
- In addition, companies are not subjected to minimum share capital requirements or custom duties, and investors can enjoy a 30-year income tax exemption. Investors are also entitled to relaxed Omanisation rates of 25%.
- The special economic zone boasts a multimodal connectivity system, with an integrated transport system through modern road network, ports and airport.
- The authorities intend for there to be 10 different zones set up in the area, each devoted to a particular sector. Some of these sectors include the Crude Oil Terminal, Fishery industries, Logistics and Warehousing, Heavy and Light Industries, New Duqm City, Minerals and Tourism.
- Potential investment opportunities in Duqm Special Economic Zone include storage and logistics, commercial offices and residential complexes, industrial properties and tourism.
Knowledge Oasis Muscat Special Economic Zone
- Knowledge Oasis Muscat Special Economic Zone caters to science, IT and knowledge-based businesses and organisations.
- Investors setting up in this area will be subject to lower Omanisation rates, at 25%.
- However, businesses that set up here will have to meet a share capital amount of at least OMR 20,000 (US$52,000).
Looking to set up company in Oman Free Trade Zones?
- Contact us to find out more about how to set up a company in Oman Free Trade Zones, including opening a corporate bank account for your business and more. Our dedicated and experienced team will revert within the next 24 hours.
How many directors are required to be appointed to register in an Oman Free Zone?
- Only 1 director is required.
What are the benefits of setting up a company in Oman Free Zone?
- Free zone companies can benefit from 100% foreign ownership, no minimum share capital requirements, no corporate taxes for 10 years and no custom duties on goods entering and leaving the zone.
How many shareholders are required to incorporate in Oman Free Zone?
- Only 1 shareholder is required to start a free zone company in Oman.
How many Free Zones are there in Oman?
- There are three Free Zones in Oman, namely the Salalah Free Zone, Sohar Free Zone and Al Mazunah Free Zone. The jurisdiction also has two Special Economic Zones: the Duqm Special Economic Zone and Knowledge Oasis Muscat. Businesses that set up in these free zones can enjoy 100% foreign ownership, tax benefits, exemption from customs duties and other monetary incentives.
What is Omanisation?
- Introduced by the Omani government in 1988, Omanisation is a policy which aims to replace foreign workers with trained Omani nationals. Certain quotas of Omani to foreign employees’ ratios have been implemented for several industries and companies in Oman.
- Free Zones in Oman tend to feature reduced Omanisation rate, as well as other incentives.
Is it necessary to hire Omani citizens when I set up an Oman free zone company?
- Yes, at least 10% of the Omani free zone entity employees have to be local hires, although this requirement is lower than in the mainland.