Other BriefingsOman Labor Market Compliance: New Rules for Foreign Companies and Expatriate Workers
Oman has introduced new labor rules requiring foreign companies to hire at least one Omani national and allowing expatriate workers to change employers if contracts aren’t registered within 30 days, reinforcing its Vision 2040 goals for workforce localization and transparency.
Oman has announced two significant regulatory changes that reinforce its commitment to labor market reform and national employment goals.
These measures, one targeting foreign-owned companies and another enhancing expatriate worker protections, signal a dual approach to increasing job opportunities for Omani citizens while improving transparency and accountability in private sector employment.
Mandatory hiring of Omani nationals by foreign companies
Under Ministerial Decision No. 411/2025, the Ministry of Commerce, Industry, and Investment Promotion now requires foreign-owned companies to employ at least one Omani national within their first year of operation. This new article, Article (12) bis, has been added to the executive regulations of the Foreign Capital Investment Law, marking a notable step in Oman’s ongoing Omanization strategy.
To ensure compliance, the appointed Omani employee must be registered with the Social Protection Fund, which serves as proof of formal employment and contribution to the national social security system. Specifically:
- Newly established foreign companies must fulfill the hiring condition within one year; while
- Existing businesses are granted a six-month compliance window, triggered by either commercial registration renewal, issuance of a new work permit, or renewal of an existing one.
This policy shows the government’s intent to align foreign investment inflows with domestic employment objectives, encouraging knowledge transfer and greater workforce integration. The measure complements Oman’s Vision 2040 goals to foster a dynamic, diversified economy where private enterprises play a key role in national development.
Enhanced worker mobility for expatriates
In a parallel reform, the Ministry of Labour has introduced a new rule that increases flexibility for expatriate workers. Effective immediately, foreign employees whose employment contracts are not registered within 30 days of their work permit renewal will be free to change employers.
This regulation applies to all categories of expatriate workers and is designed to enforce stricter documentation standards. Employers are now required to submit valid employment contracts through the official system within the designated timeframe. Failure to do so risks losing their workforce, as unregistered employees gain automatic eligibility to transfer.
The Ministry has issued formal warnings to both private individuals and companies, emphasizing that non-compliance could lead to administrative penalties and reputational risk. The reform strengthens worker rights, enhances transparency, and supports fair labor practices, all key elements in maintaining Oman’s attractiveness to international investors seeking a compliant and stable labor environment.
Omanization and expat recruitment: Compliance considerations for businesses
Oman’s recent labor measures reinforce its position as a competitive investment destination with robust governance frameworks. By mandating local employment and safeguarding expatriate rights, the Sultanate continues to modernize its labor market while striking a careful balance between regulatory control and investor confidence.
Foreign investors must integrate HR and legal processes early in the investment lifecycle to avoid delays or penalties.
Foreign enterprises entering Oman should:
- Review HR policies and contracts to ensure timely registration in official systems.
- Plan early recruitment of qualified Omani nationals to meet the new hiring threshold.
- Coordinate with local advisory firms for support with registration, payroll compliance, and social protection procedures.
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