Oman’s New Foreign Capital Investment Law – Prohibited Activities List PDF Download PDF (Click Here)
Last year, in July 2019, the new Foreign Capital Investment Law (the New FCIL) was released, and it went into force on January 1, 2020. The New FCIL has drastically loosened foreign investment laws and limitations, expedited foreign investor registration and licensing procedures, and linked foreign investors’ rights and incentives with those offered to domestic investors.
Allowing 100 percent foreign ownership in a variety of sectors was one of the most significant developments in the New FCIL.
The Executive Regulations of the new FCIL were issued by the Ministry of Commerce and Industry of Oman (MOCI) in June 2020, laying out provisions for foreign investment project registration, benefits available to specific projects, land allocation for investment purposes, and inspection of projects by the competent authority, among other things.
The Minister of Commerce, Industry and Investment Promotion (MOCIIP) – formerly MOCI – issued Ministerial Decision (MD) No. 209/2020 in December 2020, establishing a list of activities that foreign investors are prohibited from engaging in, limiting them to Omani investors to protect national products and entrepreneurship projects.
An Omani investor can invest in any activity and form a partnership with a foreign investor, according to the judgment. Only with MOCIIP’s specific written authorization may an exemption to the restricted list be allowed, which we believe will be extremely unlikely in practice.
List of Prohibited Activities
The MOCIIP has issued a list of prohibited acts that are not permitted under the new FCIL (MD 209/2020). The whole list of activities that foreign investors are barred from engaging in is included below, however, most of them are activities that are unlikely to be of substantial interest to any big international investor.
We also observe that prohibiting retail gasoline sales would stifle any further liberalization of the retail fuel industry until MOCIIP considers providing exception permissions to allow foreign investment in such activities. The method for granting exception approval isn’t spelled out in the MD, and we’re told it’ll be handled on a case-by-case basis.
Furthermore, restrictions on goods shipping and unloading can be taken quite widely, and it will be interesting to observe how the MOCIIP interprets it in practice unless further clarity is offered.
Finally, reserving drinking water for Omani investors – a lucrative economic opportunity – will eliminate competition from foreign investors who will no longer be able to access this resource.
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