Key Incentives for Investors under Oman’s Special Economic Zones and Free Zones Law

Oman is making a bold move to position itself as a premier investment destination with the introduction of its new Law of Special Economic Zones and Free Zones, outlined in Royal Decree 38/2025. This legislation is not just a set of regulations; it's a strategic blueprint designed to attract global capital by offering a compelling package of incentives that promise significant advantages for businesses operating within these designated zones.

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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.

As explained by Dr. Mohammed Ibrahim Al Zadjali, Founding Partner of Mohammed Ibrahim Law Firm, the cornerstone of this new law is the generous tax exemption. Enterprises can look forward to a decade free from income tax, with the potential for renewal, significantly reducing operational overheads. Furthermore, the removal of customs duties on essential imports for construction and operation, as well as on exported goods, directly translates to cost savings and enhanced competitiveness for investors. This dual benefit of tax relief and streamlined customs procedures is a powerful draw for businesses looking to optimize their financial performance.

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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.

Beyond fiscal benefits, the law addresses critical aspects of business operations and ownership. The provision for 100% foreign ownership removes a common barrier for international investors, fostering a more open and accessible business environment. Coupled with flexible land allocation through lease and usufruct rights, and robust legal safeguards that protect enterprises from arbitrary actions, Oman is signaling a commitment to stability and investor confidence. These measures collectively aim to create a predictable and supportive ecosystem, making Oman an increasingly attractive hub for economic activity and growth in the region.

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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.