Saturday 16 / May / 2026
Oman’s Royal Decree 38/2025 issuing the Law of Special Economic Zones and Free Zones offers a strong set of incentives to attract investors. These benefits are clearly laid out to make the Sultanate a competitive destination for business.
In an exclusive interview with Times of Oman, Dr. Mohammed Ibrahim Al Zadjali, Founding Partner of Mohammed Ibrahim Law Firm, explains that “one of the key incentives under the law is the tax exemption. Enterprises operating within a zone are exempt from all taxes imposed under the Income Tax Law for 10 years from the start of their activity. This period of exemption can be renewed twice more for special projects, subject to the conditions specified in the regulations and the approval of the Minister of Finance. However, this exemption does not apply to banks, financial institutions, insurance companies, telecom providers, construction companies, or land and sea transport businesses.”
“Machinery, tools, raw materials, equipment, and other supplies required for the construction, preparation, or operation of the enterprise are not subject to customs tax when brought into the zone, whether from inside or outside Oman. Products manufactured in the zone and exported outside Oman are also not subject to customs tax. This reduces costs for both importing and exporting,” he said.
He further stated that “non-Omanis may fully own an enterprise, operator, or real estate developer without the requirement of a local partner. Land is allocated through lease or usufruct rights in accordance with the rules and procedures of the Authority and the Board, without application of the general land allocation framework.”
“It is not permitted to nationalise an enterprise, impose receivership over it, seize, freeze, impound, or confiscate its property except pursuant to a judicial ruling, subject to the enforcement of State tax debts. It is also not permitted to cancel or suspend licences issued to the enterprise unless it is warned of the violations attributed to it, heard, and granted an appropriate grace period to rectify them,” he said.
“Investors may freely transfer profits and investment proceeds abroad without restriction. Taken together, these incentives make Oman’s free zones an attractive investment destination, supported by tax benefits, legal safeguards, and a range of additional incentives offered across the various free zones established in the Sultanate of Oman,” he concluded.
(Mohammed Ibrahim Law Firm ([email protected]), (+968 244 87 600) was established on 14th December 2006 and is serving clients through its offices in Muscat and Sohar, as well as operating on a request basis in other areas. It offers legal representation across a wide range of practice areas that include Labour Law, Corporate, Commercial, Contracts, Banking and Finance, International Trade, Foreign Investment, Insurance, Maritime Law, Construction and Engineering Contracts, International Arbitration, Intellectual Property and more).
