The Vision 2040 of Oman is the national reference for economic and social planning for the Sultanate of Oman during the period 2021-2040. From it, national sectoral strategies and five-year development plans emerge. With a noble determination from His Majesty Sultan Qaboos bin Said – may God rest his soul – His Majesty Sultan Haitham bin Tariq – may God protect and preserve him – has been keen on its implementation.
The Vision 2040 of Oman was prepared through extensive community participation, and the vision document was adopted by the Royal Decree of His Majesty Sultan Haitham bin Tariq – may God protect and preserve him – at the end of 2020, to be implemented from the beginning of 2021 until 2040.
Oman, a nation historically centered on agriculture and coastal trade, underwent a significant economic shift with the discovery of oil reserves in the 1960s. This discovery propelled Oman into a new era, where petroleum exports became the cornerstone of its economy. Currently, oil revenues make up approximately 40% of the country’s GDP and contribute about 75% to the government’s income.
Before the oil boom, Oman’s economy relied heavily on traditional sectors like fisheries, agriculture, and trade, which were fundamental to its economic activities. However, the discovery of oil and gas led to a profound transformation, fundamentally reshaping the country’s economic landscape.
Situated strategically, Oman enjoys convenient access to markets across the Middle East, India, South East Asia, Africa, and Europe, owing to its advantageous location.
In response to the heavy reliance on oil, the Omani government has actively pursued a development plan aimed at diversifying and industrializing the economy. The overarching objective is to reduce dependency on oil revenues by promoting growth in other sectors. By fostering economic diversification and encouraging the expansion of non-oil industries, Oman aims to establish a more sustainable economic foundation for the future.
Oman’s export portfolio is predominantly composed of crude oil, refined petroleum, natural gas, and manufactured goods, while imports primarily include machinery, transportation equipment, general manufactured goods, and food items. Joining the World Trade Organization in 2000 facilitated duty-free trade with fellow GCC members and the United States, further enhancing Oman’s economic landscape. Key trade partners include the United Arab Emirates, China, Japan, Saudi Arabia, and India. Notably, Oman’s economic ties with Qatar experienced notable growth post-2017, following a blockade imposed by neighboring Gulf countries.
Diversified Economy: Oman’s economy is diversified, with sectors such as oil and gas, tourism, manufacturing, agriculture, and fisheries contributing to its GDP. While oil and gas remain significant contributors to the economy, efforts have been made to diversify into non-oil sectors to reduce dependency on oil revenues.
Stable Macroeconomic Environment: Oman maintains a stable macroeconomic environment, supported by prudent fiscal policies and monetary measures. The government has implemented economic reforms aimed at enhancing competitiveness, attracting investment, and fostering sustainable growth.
Growing Population and Urbanization: Oman has a relatively young and growing population, with a significant portion residing in urban areas. This demographic trend presents opportunities for businesses, especially in sectors related to housing, infrastructure, consumer goods, and services.
Investment Opportunities: Oman offers various investment opportunities across different sectors, including infrastructure development, tourism, real estate, healthcare, education, and renewable energy. The government has been actively promoting foreign investment through initiatives such as free trade zones, tax incentives, and streamlined regulatory processes.
Trade and Connectivity: Oman’s strategic location provides it with access to regional and international markets. The country has well-established trade relations with countries across the Middle East, Asia, Africa, and Europe. Major ports, airports, and logistical infrastructure facilitate trade and connectivity.
Government Initiatives: The Omani government has launched several initiatives to support economic growth and diversification. These include Vision 2040, Tanfeedh (the National Programme for Enhancing Economic Diversification), and various economic stimulus packages aimed at boosting investment, innovation, and entrepreneurship.
Oman’s economic landscape presents a plethora of opportunities for investors, bolstered by recent Royal Decrees and Ministerial decisions in 2023 aimed at attracting foreign investment. Key initiatives like Oman Vision 2040 and the Oman Investment Authority (OIA) play pivotal roles in driving commercial expansion. Oman Vision 2040 serves as a strategic framework to navigate challenges, leverage regional and global shifts, and propel the nation towards greater prosperity. Meanwhile, the OIA facilitates local business endeavors, facilitating a conducive environment for foreign enterprises to establish a presence in Oman.
The government’s commitment to fostering a free-market economy ensures a level playing field for businesses, supported by proactive measures such as regular issuance of regulations by the Ministry of Commerce and Industry to address economic hurdles. Additionally, legislation like the Civil Transactions and Labor Law uphold fairness in corporate dealings and employment relationships, contributing to a transparent and equitable business environment.
Oman’s diversified commercial landscape, encompassing sectors like tourism, mining, logistics, and infrastructure alongside the traditional oil and gas industry, presents lucrative investment prospects. This strategic diversification safeguards the integrity of Omani culture while bolstering economic resilience.
Overall, Oman’s proactive economic policies underscore a dedication to fostering business growth while prioritizing social welfare. Initiatives like the social safety net aimed at supporting low-income families further exemplify Oman’s commitment to inclusive economic development.
Setting up a business in Oman offers a variety of options, with the new legislation aiming to streamline the incorporation process. The revised commercial company’s law now covers an expanded range of incorporation types, including:
Each option caters to different business needs and structures, providing flexibility and opportunity for entrepreneurs looking to establish a presence in Oman’s vibrant commercial landscape.
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