Oman’s New Foreign Investment Rules Explained

Oman’s new foreign investment rules build upon the 2019 Foreign Capital Investment Law (FCIL), reinforcing the country’s commitment to becoming a premier investment destination in the region. The government now requires all foreign-owned businesses to employ at least one Omani national—a move to enhance local participation. We explore how these changes may impact investor dynamics and domestic-foreign business relations.

Starting in April 2026, a new legal requirement will come into effect, requiring all foreign investors in Oman to employ at least one Omani citizen within a year of launching business activities. This applies not only to newly established companies but also to existing businesses with foreign ownership. Notifications will be sent to each company through text messages and official digital channels, informing them of the new compliance obligation.

Once the notification is received, companies will have a twelve-month window to recruit and register an Omani employee. This hiring must be reflected in the commercial registration (CR). Non-compliance within the given period could result in administrative action from the Ministry of Commerce, Industry and Investment Promotion (MoCIIP), including suspending the company’s ability to update or change its CR certificate.

Strengthening the Omani investment climate

Eng. Ammar bin Sulaiman Al Kharousi, Director General of the Investment Services Centre at MoCIIP, has described the new measure as part of a broader strategy to enhance Oman’s attractiveness to international investors. While the FCIL successfully made it easier for foreigners to invest in Oman, the government is now focused on ensuring these investments yield direct benefits for the local workforce. Requiring businesses to hire Omani nationals helps address employment challenges and supports sustainable economic development.

This policy is part of a long-term vision to create a more inclusive and resilient economy. By integrating Omani citizens into private sector growth, the government aims to reduce reliance on public sector employment, stimulate skill development, and ensure that the benefits of foreign investment are more evenly distributed across society.

Compliance enforcement via the Oman Business Platform

To streamline the enforcement of this new rule, MoCIIP will utilize the Oman Business Platform, a centralized digital portal that handles commercial licensing and regulatory compliance. Businesses not fulfilling the hiring requirement within the twelve-month window will face administrative restrictions, including reduced access to certain online government services.

However, the government has built flexibility into the system. A 30-day grace period will be granted to non-compliant firms, during which they can correct their status without penalty. In exceptional cases, this period may be extended. Importantly, if an Omani employee is dismissed after being hired, the obligation to employ a replacement is automatically reinstated. This ensures continuous oversight and reinforces the seriousness of the policy.

MoCIIP, in conjunction with the Ministry of Labour, will monitor compliance and promote accountability.

Council of Ministers’ support for reforms

The Council of Ministers has fully endorsed the new regulation, which forms part of a broader national reform agenda. The Council has affirmed its commitment to treating foreign investors equally under Omani law, ensuring a level playing field while encouraging responsible investment practices.

By linking regulatory benefits and reduced costs to the employment of Omani nationals, the government is strategically positioning itself to balance economic liberalization with social responsibility. Investors who comply with the employment requirement are likely to benefit from lower operational costs, expedited services, and improved relations with regulatory authorities. This alignment of interests is key to fostering a more sustainable and mutually beneficial investment environment.

Alignment with Vision 2040 and national development goals

The new rules are closely aligned with the pillars of Oman Vision 2040, which emphasizes economic diversification, private sector empowerment, job creation, and sustainable development. Foreign investment is seen as a vital engine for these goals, and the government is keen to ensure that it directly contributes to building human capital and promoting economic inclusion.

At the heart of Vision 2040 is the goal of reducing dependence on oil revenues and developing knowledge-based industries that are internationally competitive. By ensuring that foreign investment creates local employment opportunities, Oman is laying the groundwork for a more balanced and diversified economy. The move also sends a positive signal to international stakeholders that Oman is serious about long-term, stable growth rooted in shared value.

Expansion of investment opportunities across sectors

The new employment rule applies to more than 1,700 commercial and industrial activities, representing a significant portion of Oman’s economic landscape. Whether in construction, logistics, manufacturing, or services, foreign companies will need to integrate local employment into their business models.

To support this shift, the government has taken extensive steps to reform the investment ecosystem. Over 836 government services have been reviewed, with many being either eliminated, merged, or simplified to reduce duplication and bureaucratic delays. Licensing and approvals are now faster and more transparent, further enhancing Oman’s competitiveness in the region.

This ongoing administrative overhaul demonstrates a clear commitment to improving the ease of doing business in Oman, while also creating a framework where foreign capital and local talent can thrive together.

Conclusion

Oman’s new foreign investment rules signal a decisive shift toward a more inclusive, efficient, and future-ready economy. By mandating the employment of at least one Omani national in foreign-owned businesses, the government is taking a proactive step to ensure that economic growth translates into real benefits for its citizens. These reforms are not merely regulatory updates—they represent a strategic vision to attract global capital while nurturing local capabilities.

As Oman moves forward with its Vision 2040 agenda, policies like these will play a pivotal role in shaping a resilient and diversified economy. The combination of liberalized investment policies, improved administrative efficiency, and a clear focus on local employment will position Oman as an increasingly attractive and responsible destination for international investors.

For foreign businesses, the message is clear: Oman welcomes investment, but it also expects partners to contribute to the nation’s broader development journey. With the right planning and commitment, the new rules present an opportunity to participate in one of the Gulf’s most forward-looking economic transformations.

Read more: Oman Expands Digital Banking with Direct Debit System

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