Muscat plans to reduce the oil sector’s contribution to gross domestic product (GDP) to 9 per cent before 2020, by developing tourism and heavy industry and implementing a robust Omanisation programme to encourage a growing young population to enter the workforce. In 2012, Oman’s GDP composition by sector was estimated by the central bank as 50 per cent oil and gas, 16 per cent industry, 33 per cent services and 1 per cent agriculture. The budget allocation for 2013 was $35.5bn, while expenditure is expected to be $29.1bn.

Broadly speaking, Oman remains politically and economically stable. Gross domestic product is expanding steadily at 5 per cent a year, driven by high oil prices and public spending.

Oman set out a $76bn five-year spending plan for 2011-15, which aims to create jobs and improve living standards through the development of the country’s infrastructure, hospitals and education system.

There are four operational free zones in Oman at the northern industrial city of Sohar, next to the southern port of Salalah, at Duqm in the central coastal area and at Mazunah, close to the Yemen border. In 2012, the Free Trade Zones Authority announced it would invest $450m in extending the country’s free zones. This will include expanding land plots, constructing warehouses, offices, roads and staff accommodation, and providing space for storage units.

The Sohar Free Trade Zone has attracted 14 foreign companies, which have invested in metals, minerals and logistics. Other sectors covered include oil and gas, light manufacturing, chemicals and food processing. In May 2013, the zone announced it was expecting $450m in investments over the next year, with $250m from India.

Al-Mazunah Free Zone was set up in 1999 and facilitates the transport of cargo between Oman and Yemen. Salalah Free Zone was ranked 17th in the Top 50 Free Zones of the Future 2012/13 by FDI Magazine, as well as fifth-best port zone, while Salalah Airport Zone came joint fifth in the ranking of best airport zones. Plots of land for the under-construction Duqm Special Economic Zone were allocated in February 2013. Across Oman, the Public Establishment for Industrial Estates also runs 10 industrial estates, catering to various sectors.

Fast facts

  • Oman is aiming for the oil sector to contribute 9 per cent of gross domestic product by 2020.
  • The government is investing $76bn in its 2011-15 spending plan.
  • The 2013 budget allocation is $35.5bn.
  • There are 10 industrial estates spread across the sultanate.

Freezone Sohar

Located 220 kilometres northwest of Muscat, Freezone Sohar is situated next to Sohar port, which is part of the Sohar Industrial Port Company’s group.


The zone affords easy access to the East African coast and the Indian subcontinent, and offers plentiful land on which to build units. The first 500-hectare phase of the zone has already been developed, with a further 4,500 hectares planned. Sohar port currently houses three clusters focusing on logistics, petrochemicals and metals.


  • 100 per cent foreign ownership (minimum two shareholders)
  • 10-year exemption from corporate tax
  • No customs duties
  • No restrictions on sales within the GCC; a standard 5 per cent GCC customs duty applies
  • Minimum Omanisation levels of 15 per cent
  • Single-window licensing procedure


  • Metals and steel
  • Food
  • Light manufacturing and assembly
  • Logistics and trade

Freezone Sohar contact

PO Box 777, PC 116,

Mina al-Fahal, Oman

Tel: (+968) 2 685 2700

Fax: (+968) 2 685 2701


Salalah Free Zone

The first phase of this free zone is complete, with further phases of development planned. The second phase, to be completed in 2015-20, will focus on developing sectors within the zone, while the third phase, due to be finished in 2025, will expand the zone’s infrastructure and facilities. The zone is supporting the development of a new sea-air cargo corridor, in partnership with Oman Air and Salalah port.


The Salalah Free Zone offers office space for rental, as well as business ‘incubators’ within its newly opened headquarters. There is also access to a deep sea port and international airport.


  • 100 per cent foreign ownership
  • 30-year tax holiday on profits and dividends
  • No corporate or personal income tax
  • No restrictions on the repatriation of capital or profits
  • No customs or excise duties
  • No minimum capital requirements
  • Competitive labour and utilities costs


  • General trading licence: import, export, distribution and storage
  • Trade licence: import,
  • export, distribution and storage of specific items
  • Industrial licence: manufacturing, import of raw materials and export of finished products
  • Service licence: completion of specified services

Salalah free zone contact

PO Box 87, PC 217

Al-Awqadain, Oman

Tel: (+968) 2 321 2999

Fax: (+968) 2 321 2998



Duqm Special Economic Zone

This zone is run by the Special Economic Zone Authority Duqm (SEZAD).


The free zone comprises a sea port, industrial area, town, fishing harbour, tourist zone, logistics centre and an education and training zone. It has a land area of 1,777 square kilometres and 80km of coastline.

The first phase of Duqm port is complete and will handle containers and bulk cargo. Its commercial quay can accommodate eight vessels. A 1km-long government quay is also under construction and, when complete, will accommodate the Royal Navy, Coast Guard and fast ferries. This zone also houses a dry dock (two docks of 410 metres each), plus 2.8km of quayside for ship repairs.

Duqm airport is scheduled to begin operation in 2015, with a prospective capacity of 500,000 travellers a year. It will have a 4km runway and a cargo terminal with 50,000 tonnes of capacity. A total of 365 sq km has been allocated for use by industrial and logistics firms.


  • No personal income tax
  • Long-term leases and reduced rates
  • No restrictions on foreign ownership
  • No minimum investment capital
  • Waivers and reduction of corporate tax and customs duties
  • 100 per cent repatriation of capital and profits


  • Industrial estates
  • Warehousing and logistics villages
  • Tourist villages and resorts
  • Commercial, office and residential complexes

Special Economic Zone Authority at Duqm contact

PO Box 25, PC 103, Bareeq al-Shatti, Oman

Tel: (+968) 2 200 0088

Fax: (+968) 2 200 0099



Duqm land lease rates

Industrial: From $2.50/sq m a year

Residential: From RO 0.2/sq m a year

Commercial: From RO 0.3/sq m a year

Tourism: From RO 0.15/sq m a year

Electricity: From RO 0.01/kWh

Al-Mazunah Free Zone

Al-Mazunah free zone is located 4km from the border with Yemen and 14km from the Yemeni city of Shahn. It comprises approximately 3 million sq m, built at a cost of RO680m ($1.8bn). The Public Establishment for Industrial Estates operates an industrial estate within this zone.


This zone offers warehouses, an industrial area, showrooms, an administrative centre, a hotel and business centre, a commercial mall, residential buildings, animal and livestock resources and car trading stores. Plots range from 2,000-16,000 sq m, across 100 sectioned areas.


  • Omanisation rates of 10 per cent
  • Customs duty exemption
  • Exemption from commercial agency law
  • 30-year income tax holiday
  • 100 per cent capital ownership
  • Yemeni employees can work without visas
  • No minimum investment required
  • Imported goods can be sold into the larger Omani market


  • Industrial: factories, food, plastics, textiles and maintenance
  • Commercial: trading and storage of goods, cars and spare parts, livestock, food, machinery and equipment
  • Supporting services: transport and logistics, distribution and clearing, handling and commercial correspondence

Industrial Estates

Oman is home to nine industrial estates operated by the Public Establishment for Industrial Estates (PEIE). The first, at Rusayl, was opened in 1983 and inaugurated in 1985. All nine estates cover an area of approximately 88,300 million sq m. The PEIE offers packaged facilities and services, including land and buildings for industrial development, nearby hotel accommodation for guests and staff, restaurant and banking facilities, telecommunications infrastructure, and convenience and retail stores.

Incentives include 100 per cent foreign share capital, a five-year tax holiday and no personal income tax, exemption from customs duties, special loan terms for joint government projects in agriculture, fisheries, health and traditional handicrafts, and export credit insurance.

Industrial estates costs

Electricity: From RO 0.012/kWh

Water: From RO 0.003/gallon

Gas: From RO 0.0205/cubic metre

Industrial estates minimum rents

Rusayl: From RO 0.25/sq m a year

Sohar: From RO 0.25/sq m a year

Raysut: From RO 0.25/sq m a year

Sur: From RO 0.15/sq m a year

Nizwa: From RO 0.25/sq m a year

Buraimi: From RO 0.25/sq m a year


Location: 45km from Muscat

Facilities: A total of 154 factories are currently in operation, 13 are under construction and another 40 are planned. About 250 hectares of the 750-hectare site have been developed to date. Factories in Rusayl produce consumer goods, fibre optics, food, textiles and garments, stationery and industrial products such as chemicals, batteries and electrical, and building materials.


Location: 200km from Muscat and 180km from Dubai

Facilities: A total of 10.7 million sq m of the 24.6-million-sq-m estate has been developed, comprising 226 plots. Currently, 60 businesses operate within the estate, 35 units are under construction and another 55 are planned. Goods produced at Sohar include marble, food, detergents, household goods, leather, furniture, resins, glass, steel bars and engine oil.


Location: 200km from Salalah in the southern Dhofar region

Facilities: Raysut spreads over 270 hectares, with warehouse facilities across 30 hectares. A total of 63 hectares has been developed to date, sub-divided into plots of 1,350-11,000 sq m. Goods produced at Raysut include paper products, frozen foods, PVC pipes, steel fabrication, medical supplies, solar heaters, flour, ice, fertilisers and vegetable oils.


Location: 300km from Muscat in the Al-Sharqia region

Facilities: This estate covers 3,610 hectares and includes a deep-water harbour. Sectors in operation at Sur include liquefied natural gas, natural gas and fertiliser production.


Location: 180km inland from Muscat

Facilities: Nizwa comprises 214 hectares, with 24 hectares developed to date. This area contains 80 plots covering 1,200-8,000 sq m. Sectors operating at Nizwa include manufacturing, ceramics, plastics, medical products, plywood, packaging, water tank production, ferrous casting, oil services and foods.


Location: Western Oman on the border with the UAE

Facilities: Buraimi industrial estate stretches across 550 hectares. To date, 25 hectares have been divided into plots of 500-6,000 sq m. Other plots range from 5,000-33,000 sq m in size. In 2012, 15 new projects launched, leasing 111,413 sq m. Companies operating at this facility are mainly involved in manufacturing, warehousing and services.


Location: 260km from Salalah in the southern Dhofar region

Facilities: This estate sits inside the Al-Mazunah Free Zone, near the border with Yemen. Yemeni employees can work in the zone without a visa, and workers can cross into the estate without the usual border procedures. Al-Mazunah assists with trading and warehouse facilities.


Location: 45km from Muscat International airport

Facilities: Smail is 7.4 million sq m in size and currently has 130 investors. In 2012, the PEIE announced that RO30m ($77m) would be spent on developing the estate.

Knowledge Oasis Muscat (KOM)

Location: Muscat, near Sultan Qaboos University

Facilities: KOM opened in 2003 as Oman’s flagship technology park. Multinational corporations, small and medium-sized enterprises, start-up businesses and technical colleges all operate in this estate. Sectors covered include digital and mobile media, environmental science, telecommunications, hi-tech engineering and software development, internet services and call centres.

Knowledge Oasis Muscat contact

PO Box 200, Rusayl 124, Oman

Tel: (+968) 2 417 0700/ 415 5100

Fax: (+968) 2 444 9095



National Business Centre

Location: Within KOM

Facilities: The PEIE announced this project in late 2012. When complete, the centre will offer training, facilities support, entrepreneurship development programmes, coaching and mentoring.

Public Establishment for Industrial Estates

PO Box 200, Rusayl 124, Oman

Tel: (+968) 2 415 5100

Fax: (+968) 2 444 9095



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