Freezone Companies in Oman - Oman Free Zones

Q: How many directors are required to set up in an Oman Free Zone?

Only 1 director is required to register in an Oman Free Zone.

Q: What is a usufruct agreement?

Usufruct agreement is a land right granted by owner (either an Omani national or a government authority) to allow a company to form within this zone.

Q: Do I need to rent commercial office space in an Oman Free Zone?

Rental of commercial space in the specified Free Zone is mandatory regardless of the company size.

Q: If I set up a Free Zone company in Oman, will I need to hire Omani Citizens?

Yes, a minimum of 10% of your companies’ employees must be Omani hires. Please check the Omanisation requirements within your specific Free Zone.

Q: Do I need an Omani partner to start my business?

No. Free zones allow non-Omani investors to own 100% of their company.

Q: Are there facilities in Duqm Special Economic Zone for SMEs?

For Omani owned SMEs, some service fees for SMEs have been reduced by up to 50% if they are register with Small and Medium Enterprises Development Authority (SMEDA).

Q: How far is Sohar Free zone from Dubai?

Sohar Free zone is less than a 3-hour drive from Dubai.

A guide to free zones in Oman

Oman’s strategic location, with its direct access to major shipping routes and prominent port locations, uniquely positions it as a pivotal logistics hub in the Middle East. Unlike its neighbors with numerous free zones, Oman offers a select number of specialised free zones designed to support targeted industries. These are tailored to enhance economic activity in sectors such as logistics, manufacturing, and various other industries, providing significant benefits to Oman business setup including 100% foreign ownership, an absence of customs duties and personal income tax and easy access to regional markets through well-established trade agreements and a comprehensive infrastructure across maritime, aero, road, and rail sectors.

About Oman Free Zones

At present, there are three free trade zones in Oman:

1. Al Mazunah Free Zone – Hub for commercial, service and industrial sectors

In the southern Dhofar governorate lies Al Mazunah Free Zone, a pioneer in facilitating smooth business operations with Yemen and African markets. The free zone’s proximity to raw materials and markets, coupled with its 30-year tax holiday and absence of mandatory capital requirements, makes it financially attractive and ideal for the commercial, light industrial, and assistance service sectors. Additionally, high-end connectivity and the provision of essential support services allow for efficient and agile business transactions.

2. Sohar Free Zone – Hub for plastics, metals, minerals, food, petrochemicals and service sectors

Sohar Free Zone, inaugurated in 2010, has rapidly grown to become one of the GCCs most influential industrial hubs. Anchored by the Sohar Port, the zone capitalises on its proximity to global trade arteries and major cities with Muscat, Dubai, and Abu Dhabi all linked by modern highways and Muscat Airport.

Strategically positioned near the Strait of Hormuz, Sohar Free Zone offers reduced freight and insurance costs and has become a hub for general trading, logistics, light manufacturing, as well as industrial and service providers.

It offers a One-Stop-Shop process which means that businesses can commence operations with ease and minimal delay. Its incentives include exemption from import and export duties, absence of minimum share capital requirements, and entitlement to full foreign ownership. It also offers a 25-year corporate tax holiday and a reduced Omanisation rate of 15% for the first ten years, easing the integration of foreign talent into the workforce.

3. Salalah Free Zone – Hub for chemical and material processing, manufacturing and assembly, logistics and distribution sectors

There are also two special economic zones:

1. Duqm Special Economic Zone – Hub for refineries, oil storage, transport, fish and food, logistics, warehousing, minerals, and tourism sectors

The Duqm Special Economic Zone (SEZ) is a central pillar in Oman’s economic diversification strategy. Situated in the Al Wusta Governorate over an area of 2,000 square kilometers, it stands as the largest SEZ in the Middle East and North Africa region. This zone is strategically positioned away from Muscat, Oman’s capital, yet integrated with a sophisticated multimodal transport system that includes a modern road network, a seaport, and an airport, providing seamless connectivity.

Duqm SEZ offers exemption from the usual constraints of minimum share capital requirements and custom duties coupled with an attractive 30-year income tax
exemption and a reduced Omanisation requirement, which ensures that a business can operate with a lower percentage of local hires while still benefiting from the zone’s full suite of benefits.

The zone is organised into ten distinct sectors, each designed to bolster specific facets of industry and commerce, ranging from a crude oil terminal and fisheries to logistics and warehousing operations, as well as heavy and light industries. This deliberate segmentation paves the way for investors to tap into sector-specific advantages, ensuring that each enterprise can maximise its operational efficiency.

2. Knowledge Oasis Muscat Special Economic Zone – Hub for science, IT and knowledge-based sectors

Knowledge Oasis Muscat (KOM), located in the country’s capital, is specifically designed to support science, IT, and knowledge-based businesses. This zone encourages innovation by offering reduced Omanisation rates at 25%, allowing for a greater intake of international expertise while still providing opportunities for local employment. Businesses setting up in KOM must meet a minimum share capital requirement of OMR 20,000 (US$52,000) to demonstrate that they have the necessary economic base to operate within this specialised economic area.

Benefits

Each of the Free Zones and the Special Economic Zones offer slightly different benefits for doing business within the zone. They offer benefits such as:

Infrastructure to support different business activities
Tax holiday – 0% corporate tax for us to 10 years
100% Foreign Ownership
No Import or export duties
0% sales or personal income tax

An example of more specific benefits for the Duqm Special Economic Zone would be its connectivity and transport systems with modern roads, ports and airports.

Requirements

To simplify the process, company formation in Oman Free Zones is achieved in three key steps.

Submit Free Zone application via the relevant portal including NOC letter to Ministry of Environment and Climate Affairs
Plot allocation
Sign Usufruct agreement

Supporting documents required

Investors names and country of origin
Plot size required
Capital investment
Business plan
Employee requirements
Contact information and documents of investor
Projected cargo volume
Projected total electricity and water required

How Can Sovereign PPG Help?

Sovereign PPG specialises in providing expert assistance with Oman company setup. Our services
include securing all necessary approvals
and licences
associated with business setup in Oman, facilitating visa processes, and offering ongoing services such as accounting, payroll, and HR management.

For any enquiries or detailed guidance on setting up in Oman free zones, please reach out
to us. Our team is ready to support you in navigating the setup process and helping you take full advantage of the opportunities available in Oman’s vibrant trading ecosystem.