New rule for businesses in Oman: Here’s what you need to know

The Ministry of Commerce, Industry and Investment Promotion (MoCIIP) in Oman has issued a new directive requiring foreign investors to employ at least one Omani national within one year of starting commercial operations.

Mandatory social insurance registration

As reported by the Oman Observer, the Omani employee must be registered with the General Authority for Social Insurance. This move aligns with the Ministry of Labour’s Omanisation policy, which promotes the employment of Omani citizens in the private sector.

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Council of ministers’ decision supports foreign investment

This regulation follows a Council of Ministers’ decision to reduce commercial registration fees for foreign investors and treat them similarly to Omani investors—provided they meet the requirement of hiring at least one Omani employee.

Fee reductions and digital alerts

On June 18, 2023, MoCIIP announced the fee reductions for foreign investment companies via its digital platforms. Eng. Ammar bin Sulaiman Al Kharousi, Director General of the Investment Services Centre at MoCIIP, noted that the commercial register now includes an alert informing investors of the employment condition one year after registration.

Improving the investment environment

Al Kharousi also highlighted ongoing efforts to make Oman more attractive to investors by addressing challenges faced by both local and foreign businesses. Hiring Omani nationals is expected to contribute to local economic development and improve the labor market.

Enforcement through Oman Business Platform

As of April 1, 2024, MoCIIP has implemented administrative restrictions on transactions through the Oman Business Platform for foreign investors who fail to meet the employment obligation within a year of registration. A grace period of 30 days—subject to extension—is granted for companies to rectify non-compliance.

If the employed Omani is later dismissed, the obligation is automatically re-applied electronically, enabling MoCIIP and the Ministry of Labour to monitor compliance more effectively.

Simplified investment procedures

Oman’s investment sector has recently undergone several reforms, allowing foreign investors to own 100 per cent of their businesses and invest in over 1,700 commercial and industrial activities. The government has also streamlined procedures by reducing, canceling, or merging 836 services.