Oman Lists Prohibited Activities for Foreign Investors Under New Law

Foreign investors in Oman can establish businesses across most economic sectors under the Foreign Capital Investment Law. However, the Ministry of Commerce, Industry and Investment Promotion has identified specific activities that are off-limits to foreign investment, as updated by Ministerial Decision No. 435/2024.

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the restricted activities relate to sectors prohibited to be practiced by foreign investment under the applicable ministerial decisions.

Dr. Mohammed Ibrahim Al Zadjali, Founding Partner of Mohammed Ibrahim Law Firm, explained that the restricted activities encompass traditional Omani crafts and heritage products. These include items like Omani halwa, khanjar (daggers), kummah (caps), abayas, tailoring, perfumes, cosmetics, pottery, silver and copper products, leather goods, and traditional fishing tools.

The restrictions also extend to numerous retail and community-based services. These range from grocery stores, mobile coffee shops, and fruit and vegetable trading to meat and fish shops, honey and dates trading, medicinal herb stores, and souvenir shops. Services like PO box rentals, Sanad centres, and general clerical services are also prohibited for foreign investors.

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the restricted activities include traditional crafts and heritage products such as Omani halwa, khanjar, kummah, abayas, tailoring, perfumes, cosmetics, pottery, silver and copper products, leather goods, and traditional fishing tools. The restrictions also extend to several retail and community-based services including grocery stores, mobile coffee shops, fresh fruit and vegetable trading, meat and fish shops, honey and dates trading, medicinal herb stores, telephone accessory shops, souvenir and antique stores, drinking water retail, PO box rental, Sanad centres, and general clerical services.

Furthermore, certain automotive, fisheries, agricultural, and commercial activities are on the prohibited list. These include tire and radiator repair, vehicle washing, oil changing, towing, and fuel stations. Marine fishing, freshwater aquaculture, beekeeping, crane and construction equipment rental, property management, real estate brokerage, and pet care are also restricted. However, poultry hatcheries, wholesale live cattle trading, and services like hairdressing, barbering, laundry, and dry-cleaning are permitted within tourist establishments like hotels.

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Certain automotive, fisheries, agricultural and commercial activities are also included in the prohibited list including tire and radiator repair, vehicle washing, oil changing, towing, fuel and LPG stations, marine fishing, freshwater aquaculture, beekeeping, crane and construction equipment rental, property management, real estate brokerage and valuation, event supply rentals, pet care, and used battery and oil collection. However, poultry hatcheries, poultry slaughtering, and live cattle wholesale are permitted for projects with large production capacity. Hairdressing, barbering, laundry, and dry-cleaning are allowed within tourist establishments such as hotels.

Projects legally established before these decisions were enacted can continue operations, but transferring ownership to a new foreign entity requires ministry approval. Penalties for violations are substantial, with fines ranging from OMR 20,000 to OMR 150,000. Omani nationals who facilitate illegal foreign investment activities face the same penalties. This framework aims to balance Oman's openness to foreign capital with the protection of its national economic and cultural interests.

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projects lawfully established before the relevant decisions may continue, but transfer to a new foreign owner requires ministry approval. Violators face fines ranging from OMR 20,000 to OMR150,000, and the same penalty applies to any Omani who participates with a foreign investor in violation of the law.