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Oman free zones

1. Oman has four Free Trade Zones (FTZ) i) Al Mazunah ii) Sohar iii) Salalah and iv) Duqm SEZ;

2. Specific free zones benefits include i) 100% foreign ownership, ii) 10 years tax exemption iii) lower
quota requirements for Omani workers (10%) and iv) zero customs duties;

3. Oman free zones are suitable for foreign companies intending to use Oman as a regional
manufacturing and distribution base. Free zones are mainly for import- and export-oriented
companies who only require an o ice in Oman;

4. Oman also has nine “Industrial Estates” o ering some advantages including i) low rental and energy
prices ii) customs duties exemptions and iii) a five-year corporate tax exemption. Knowledge Oasis
Muscat allows for 100% foreign ownership for technology companies.

Advantages

1. FZ companies may be 100% foreign owned;

2. There are no minimum share capital requirements for free zone business;
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3. There are no corporate taxes on free zone companies for ten years thanks to a tax holiday incentive;
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4. No duties are imposed on goods imported and exported from the free zone;
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5. Oman free trade zone companies are allowed to trade within Oman without a local agent. A customs
duty of 5% applies in these cases.

Disadvantages

1. It is mandatory to rent premises within the free zone;

2. At least 10% of the free zone company’s sta must be locals;

3. Company licenses are renewable annually a er FZ laws are complied with including submitting
annual audited financial statements to the free zone authority;

4. The free zones in Oman are still under construction and lack many of the conveniences available in
the UAE free zones. Customer service is also poor.

Commercial considerations

Free zone activities allowed include i) importing raw materials ii) manufacturing iii) processing, assembling
and packaging iv) exporting finished products v) storing or warehousing products.

Al Mazunah

1. Established in 1999, Al Mazunah o ers 100% foreign ownership and 30 years of tax free operations. If
a large number of Oman nationals are hired, then this tax holiday may be extended indefinitely;

2. Unlike the rest of Oman, where 30% of employees must be Omani nationals, an Al Mazunah company
must only hire 10% locals.

3. Yemeni citizens working for Al Mazunah companies do not require work permits, which is a great
advantage considering that the free zone is located 4km from the Yemeni border in south west Oman;

4. Suitable industries include light cra ing, commercial sales, and services.

Salalah

1. Salalah opened in 2005 and is still under active development. Once finished with all four phases of
development, it will cover an area of 19 square kilometers;

2. The free zone is adjacent to the super hub port of Salalah on the main equatorial trade routes;

3. The free zone is particularly suitable for chemical and material processing, manufacturing and
assembly, and logistics and distribution;

4. Licenses o ered are for i) general trading, which allows the holder to import, export, distribute and
store all goods; ii) specialized trading of defined products, iii) services, and iv) industrial applications,
for the import of raw materials, manufacturing of specified products and export of finished products;

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The benefits of this zone include i) 30-year tax holidays on profits and dividends, ii) 0% corporate tax
iii) 0% personal income tax iv) no customs or exercise duties. 
Sohar
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1. The Sohar port free zone is still under development. Once finished it will be 4,500 hectares on the
Sohar Port. The port will cluster business into the following industries: i) steel manufacturing and
processing, ii) trade and logistics, iii) oil and gas, iv) petrochemicals, v) minerals and aggregates
industry, vi) ceramics, vii) food logistics and food processing;

2. Licensing can be i) industrial licensing, ii) light manufacturing and assembly, iii) logistics and iv)
general trade;

3. It will o er 100% foreign ownership and 10 years of tax free operations. If a large number of Oman
nationals are hired, then this tax holiday may be extended indefinitely;

4. The free zone authorities boast “one-stop-shop” incorporation procedures, shortening business
setup to under three weeks, making a Sohar company registration worth considering.

Duqm SEZ

1. When completed, the Duqm SEZ will be one of the biggest economic zones in the Middle East, with an
area of 1,745 square km;

2. The zone area is divided into eight sub-zones aimed at di erent type of investments, such as i)
industry ii) sea port and dry dock iii) tourism iv) fisheries v) logistics, etc.

3. The Zone will count with a port and an airport, which will benefit export oriented companies that
invest in the area.

Comparison of freezones

Oman Free Trade Zones Al Mazunah FZ Salalah FZ Sohar FZ Duqm SEZ

Summary        

Area covered by the free zone? 4.5 sq. km 6 sq. km 45 sq. km 25 sq. km

Most popular business sector Light industries Manufacturing Petrochemicals Light industries
in the zone? and logistics and logistics and logistics

Our Clients can setup a WFOE Yes Yes Yes Yes

in the zone?

Bonded warehouses available? Yes Yes Yes Yes

Can hire foreign workers? Yes Yes Yes Yes

Can secure o shore corporate Yes Yes Yes Yes

finance?

Can a FTZ company freely Yes Yes Yes Yes

remit money abroad?

Can trade with other parts of

Oman?
Yes Yes Yes  MAIN
Yes MENU

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Oman Free Trade Zones Al Mazunah FZ Salalah FZ Sohar FZ Duqm SEZ
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Time zone? (ahead of GMT) +4 hours +4 hours +4 hours +4 hours

Is there an airport nearby? Yes Yes Yes Yes

Company registration        

Can the company be No No No No

incorporated online?

How long to setup the 6 weeks 6 weeks 6 weeks 6 weeks

company?

How long to secure the 4 weeks 4 weeks 4 weeks 4 weeks

business license?

Foreign investor approval Yes Yes Yes Yes

required?

Client must travel to Oman for No No No No

company registration?

Minimum statutory paid up 20% of initial 20% of initial 20% of initial 20% of initial
capital requirement? investment investment investment investment

Logistics considerations        

Physical o ice space required Yes Yes Yes Yes

for new companies?

Quality of utilities? Excellent Excellent Excellent Excellent

Average annual industrial US$2,650 US$2,300 US$2,750 US$3,100

space rental per 1000sq. m.?

Average annual warehouse US$2,600 US$2,200 US$2,500 US$3,000

space rental per 1000 sq. m.?

Attractive for setting up a Yes (light Yes Yes (light Yes (light
manufacturing business? manufacturing) (manufacturing manufacturing) manufacturing)
& assembly)

Quality of Wi-Fi? Good Good Good Good

Average monthly electricity US$0.026 US$0.025 US$0.03 US$0.026

prices? (per Kwh)

Proximity of sea port in 260km 5km 10km 9km

kilometres?

Proximity of airport in 260km 18km 25km 20km

kilometres?

Accounting and tax  

considerations
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Corporate tax rate (%)? 0% 0% 0% 0% 
Oman Free Trade Zones Al Mazunah FZ Salalah FZ Sohar FZ Duqm SEZ
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Goods subject to custom No No No No
duties within the zone?

VAT imposed on transactions No No No No

within the zone?

VAT imposed on goods sold in 5% 5% 5% 5%

the mainland from 2018?

Tax incentives for Yes Yes Yes Yes

manufacturing start-ups?

Quarterly tax filing required? No No No No

Annual tax returns to be Yes Yes Yes Yes

submitted?

Annual government inspection Yes Yes Yes Yes

required?

Annual audit required? Yes Yes Yes Yes

Access to double taxation Yes Yes Yes Yes

avoidance agreements?

Corporate banking and  

financial considerations

Recommended bank for National Bank HSBC Oman Arab Bank Muscat
corporate banking? Bank

How long to setup the bank 4 weeks 4 weeks 4 weeks 4 weeks

account?

Corporate visa debit cards Yes Yes Yes Yes

available?

Quality of e-banking platform? Good Very Good Good Good

English e-banking platform Yes Yes Yes Yes

available?

Can companies make overseas Yes Yes Yes Yes

payments in OR/USD?

Can companies secure loans Yes Yes Yes Yes

within the zone?

Can secures loans from Yes Yes Yes Yes

mainland Oman banks?

Access to Private Equity/VC Yes Yes Yes Yes

funds?

Can the company list on the Yes Yes Yes  MAIN MENU
Yes
Muscat securities market? 
Oman Free Trade Zones Al Mazunah FZ Salalah FZ Sohar FZ Duqm SEZ
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Labour considerations  

Can hire foreign employees? Yes Yes Yes Yes

How long to secure the work 4 weeks 5 weeks 4 weeks 6 weeks

permit?

Client must travel before Yes Yes Yes Yes

securing a work permit?

Can investors secure a Yes Yes Yes Yes

permanent residency?

Average monthly salary for US$4,000 US$4,000 US$4,000 US$4,000

local employees?

 Frequently asked questions 

 12 steps to setting up a free zone company

 External videos 

Contact us

For additional information on our free trade zones company services in Oman, please contact our in-
house country expert, Mr. Petar Chakarov, directly:

Mr. Petar Chakarov

Client Engagements Manager

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