29 October 2013

Dentons’ Dianne Hamilton and Sumaiya al-Yarubi explain the implications of the sultanate’s nationalisation programme

The Omani government encourages the employment of nationals in the private sector and the ability of any business to employ expatriate workers is limited by Omanisation laws. These consist of two articles contained in the Labour Law issued by Sultani Decree 35/2003 and various ministerial decisions that dictate the relevant targets for employment of nationals in broad industry sectors and in various positions. For example, there are some positions that must be filled by Omanis. These include public relations officers, receptionists, human resources managers and drivers.

The Omanisation requirement is determined by a company’s registered activities. The latest requirements were issued in 2009 and covered the period up to 2010. In 2010, the Omanisation requirements in key industries were as follows:

  • Banking – 90 per cent
  • Industry – 35 per cent
  • Finance and insurance – 45 per cent

Travel and tourism – 95 per cent generally; 90 per cent (aviation and restaurants); 85 per cent (three, four and five-star hotels); and 55 per cent (one and two-star hotels)

Oil and gas – 90 per cent (production and operation); 82 per cent (direct services); and 73 per cent (assisting services)

Telecommunications – 68 per cent total, with different percentages based on role

Since the ministry has not published the requirements post 2010, the best way to be certain of the current Omanisation percentages (which we understand have not been adjusted very much since then) is to check directly with the Ministry of Manpower (MOM).

It is possible to develop an Omanisation plan in consultation with MOM if the targets will take some time to achieve, and this is particularly relevant in the initial start-up phase of new businesses.

The Labour Law provides that any employer who does not comply with the prescribed percentage of Omanisation will be fined between RO250 ($649) and RO500 for each Omani required to be hired, and the employer must comply with the Omanisation targets within six months.

About the writers

Dianne Hamilton is a senior associate and Sumaiya al-Yarubi is a lawyer at Dentons in Muscat.

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