Oman's Foreign Capital Investment Law, promulgated by Royal Decree No. 50 of 2019, gives the foreign investor a clear map before a single rial is spent: a licensed vehicle, ownership that can reach the full capital, and written guarantees against confiscation and uncompensated expropriation. It replaced the earlier Foreign Capital Investment Law of Royal Decree No. 102 of 1994. Reading the map before you negotiate with a local partner tells you what you need the partner for and what you can do without. This article relies on the Arabic text of Royal Decree No. 50 of 2019, which governs, and on the English translation prepared by the Ministry of Legal Affairs. Article numbers refer to the Law. Related guides are linked at the end of this article.
Which law applies, and when
Royal Decree 50/2019 was issued on 1 July 2019, repealed the 1994 law, and came into force six months after its publication in the Official Gazette. It required the Minister of Commerce and Industry to issue the executive regulation within six months of its implementation, and it preserved the benefits, incentives and guarantees of projects that already existed, until their terms expire. Article 2 of the Law says it does not prejudice the royal decrees on Gulf investment, the Special Economic Zone at Duqm, the Public Establishment for Industrial Estates and the free zones. If your project is in one of those zones, or you are a Gulf investor, check the zone or Gulf rules first, because they may apply instead.
No activity without a license, and full ownership is possible
Article 3 prohibits a foreigner, natural or legal, from undertaking any investment activity in the Sultanate except under the Law. Under Article 6, foreign investment is carried out through an establishment or a company in a permitted activity, by owning the invested foreign capital in whole or by contributing to it, under a license issued by the Investment Services Centre. The Law defines an investment project as any economic activity established in Oman by a foreign investor alone or in partnership with another foreigner or an Omani (Article 1). The rule is therefore not a mandatory Omani partner. It is a licensed vehicle in a permitted activity, and a local partner is a commercial choice.
Article 4 lists what counts as invested capital: currency, financial securities and commercial papers, machinery, equipment and installations, spare parts and means of transport, raw materials and production means connected to the investment, rights over intellectual and industrial property, trade marks, trade names, patents, goodwill, trade secrets, technical processes and engineering and technological designs, and profits of the foreign investment if used in increasing capital, expanding existing projects or establishing new projects.
One center, and silence counts as acceptance
The Investment Services Centre registers the foreign investor and facilitates and simplifies the approvals, permits and licenses the project needs. Under Article 5 it and the competent bodies must follow the prescribed procedures and deadlines. If no response comes within the statutory periods set in the executive regulation, the request is deemed accepted. Because the periods are in the regulation and not in the Law, check the current periods before counting on this rule.
Strategic projects in public utilities, infrastructure, new or renewable energy, roads, transport and ports can receive one approval, by decision of the Council of Ministers on the minister's recommendation. It covers establishing, operating and managing the project, including construction and manpower licenses, and it is effective on its own (Article 10). The competent bodies keep their right to oversee compliance with the laws.
The prohibited list comes before the business plan
Article 14 says that the list of activities prohibited to foreign investment is issued by decision of the minister. Match your intended activity against the list before you choose the vehicle and capital. No structure and no partner fixes a prohibited activity. The conditions for permitted activities are set by the executive regulation (Article 15).
Obligations the investor accepts
The Law is not only guarantees. The investor must follow the timeline given in the economic feasibility study and may not make substantial changes to the project without ministry approval (Article 7). The project must protect the environment, public health and safety, and work ethics under Omani law (Article 8). Apart from what the Law itself regulates, the project is subject to all Omani laws, subject to the investment and double-taxation treaties in force in Oman (Article 9). The project may not pursue political or religious aims, discriminate between nationals or residents, or prejudice public order or morals (Article 11). Employees designated by decision of the competent authority, in agreement with the minister, have judicial enforcement status and may enter premises and review records (Article 12). Under Article 12 bis of the Executive Regulation (added by Ministerial Decision 411/2025), a foreign-owned establishment or company must employ at least one Omani worker after one year from starting trading, register that worker with the Social Protection Fund and meet the set Omanisation ratios.
Written guarantees
Article 18 gives the project all the benefits, incentives and guarantees of a national project under the laws in force. The Council of Ministers may declare preferential treatment for a foreign investor on the basis of reciprocity, and may grant additional benefits to projects in the least developed areas.
Under Article 23, no investment project may be confiscated except by a judicial decision, and its assets may not be attached, frozen, restrained or placed under sequestration except by a judicial decision. Tax debt owed to the State is excepted. Article 24 allows expropriation only for the public benefit under the Law on Expropriation for Public Interest, against fair compensation quantified at the time of expropriation and paid without delay. Usufruct or lease contracts over land may not be terminated where land and real estate have been allocated except as provided by law or by a judicial decision.
Under Article 25, a competent body may revoke the approval, license or permit of a project only by a reasoned decision, after warning the investor in writing of the alleged offence, hearing the investor's view, and giving a period of up to 30 days from the warning to remove the reasons. The ministry's opinion must be sought before revocation.
Free transfers, imports and land
Article 26 gives the investor freedom to make all transfers relating to the project to and from outside Oman at any time, subject to the laws in force in Oman. The listed transfers are returns on the investment, proceeds of sale or liquidation, proceeds from the settlement of disputes, expropriation compensation, installments of loans or finance obtained from abroad, transfers for import and export linked to the activity, and foreign dues for machine rental or service contracts within the project.
Under Article 21 the project may import production supplies, machinery, spare parts and transport suited to its activity, directly or through others, without registering in the Importers Register. Article 19 allows land and real estate to be allocated through long-term leases or usufruct rights under the regulation. Article 20 leaves the tax, customs and other exemptions to the executive regulation, subject to the GCC Unified Customs Law, and Article 22 says that income tax exemption follows the Income Tax Law. Look at the current regulation to see which projects qualify and for how long.
Disputes, transfers of ownership and penalties
Omani courts have competence over disputes between the project and others, and the project's cases are treated as urgent. Disputes may be resolved by arbitration (Article 17). The investor may transfer the project's ownership, in whole or in part, to another foreign or Omani investor or to a partner, or through merger, acquisition or a change of legal form, and the project keeps its treatment under the Law if the new investor continues the project and takes over rights and obligations (Article 27).
If the investor breaches the Law, the regulation or the decisions under it, the ministry gives written notice with up to 30 days from receipt of the notice to correct the breach, extendable for a similar period if there are reasons to do so (Article 28). If the investor does not correct it, the penalties are loss of some or all incentives, suspension of the activity for up to six months, or permanent revocation of the license if the breach is repeated (Article 29). A grievance committee in the ministry, made up of an Administrative Court advisor as chair, a judge of a primary court of first instance nominated by the head of the Judicial Administrative Affairs Council, and a person with expertise nominated by the Oman Chamber of Commerce and Industry, hears grievances against decisions of the ministry or the competent bodies (Article 30). A grievance must be filed within 60 days of notification of the decision or certain knowledge of it. The committee decides within 30 days, extendable once for a further 30 days if the grievance is not ready for decision, and its decision binds the ministry and the competent bodies. The person who filed the grievance may still challenge the decision in the competent court (Article 31). Carrying on an investment activity in breach of the Law is also a criminal offense: a foreigner faces a fine of OMR 20,000 to 150,000, and an Omani who takes part with a foreigner in such a project faces the same penalty (Article 33).
What we review before the decision
We match the activity against the prohibited list and the regulation's conditions, and we choose the vehicle and capital around the activity, not the other way around. We read the feasibility study and the timeline, because substantial changes need ministry approval. We check whether a free zone, Duqm or Gulf investment rule applies instead, and we confirm the current executive regulation for deadlines, exemptions and land. We provide this service to our clients in Oman through our partners there.
Read also: Commercial Contracts in Oman: Formation Rules Investors Miss | Oman LLC Compliance After Incorporation: A Legal Guide | Company Formation in Oman for Foreign Investors
Frequently asked questions
Can a foreigner own a project in Oman in full?
Yes, in a permitted activity. Article 6 allows owning the invested foreign capital in whole, under a license from the Investment Services Centre.
Are some activities closed to foreign investors?
Yes. The minister issues a list of prohibited activities (Article 14). Match your activity against it before any other step.
Can investment disputes go to arbitration?
Yes. Article 17 allows resolving disputes by arbitration, and the Omani courts treat the project's cases as urgent.
Can my license be revoked without warning?
Not under Article 25. It requires a reasoned decision after a written warning, a hearing and a period of up to 30 days to correct the breach.
Can I move profits out of Oman?
Yes, in principle. Article 26 lists returns on investment, sale and liquidation proceeds and other transfers that may be made freely to and from Oman, subject to the laws in force in Oman.
Do you help with entering the Omani market?
Yes. Through our partners in Oman, we help clients study and set up their entry.