A Quarterly Newsletter from UAE and Oman Offices

VOL 12, Issue 1 January 2010

Oman Update

Salalah Port and Salalah Free Zone

Salalah Port

The Salalah Port Services Co. SAOG (SPS) is a Joint Venture Company [70% Omani and 30% Foreign (Maersk Sea Land)] operating a world-class container hub port and terminal. Salalah Port’s strategic location at the region’s transshipment traffic has once again placed Oman at the center of sea trade, and places it in the best position for feeder services to major ports in the Red Sea, the Gulf, Straits of Hormuz, Yemen, and the Horn of Africa, as well as Karachi and Mumbai.

Salalah Free Zone

The Salalah Free Zone provides investors a natural edge in terms of access to their target markets in Europe, Asia, Africa and Australia.

Besides the advantage of proximity to Salalah Port, having a capacity of 4.4 million TEU annually, low initial cost of setting up, and a one stop arrangement for licences, permits, visas, customs clearances, etc., the Salalah Free Zone offers a host of other investment-friendly incentives including the following:

  • A lease for 50 years (renewable for another 50 years);
  • 100% foreign ownership;
  • Zero customs duties on imports and exports;
  • No minimum capital investment requirement;
  • No tax on profits or dividends for 30 years;
  • No tax on personal incomes;
  • No restrictions on repatriation of capital, profit and investment;
  • Omanisation requirement level of only 10%;
  • Fast-track customs handling and processing.

Businesses at Salalah Free Zone will even be able to participate in existing export guarantee arrangements provided to Omani companies by Omani financial institutions.

The Salalah Free Zone, which is being developed in multiple phases, will offer a mix of industrial, manufacturing, ware-housing, logistics, distribution, research and development and office facilities, retail outlets, resorts, and residential space.

The Salalah Free Zone offers the following type of licences:

Licence type & Benefits

Trading:

Allows the holder to import, export, store and distribute specific and related items.

Industrial:

Allows the holder to import raw materials, carry out the manufacturing process of specified products and export the finished products to any country.

Service:

Allows the holder to carry out the services specified in the licence within the Free Zone. The type of service must conform with parent company’s licence, issued by the Economic Department or Municipality of Dhofar.

National Industrial:

This licence is designed for manufacturing companies where atleast 51% of ownership or shareholding must be AGCC (Arabian Gulf Cooperation Council – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and/or United Arab Emirates). The value added to the product in the Free Zone per year must amount to a minimum of 40%. This Licence allows the holder the same status as a local or AGCC company inside the Sultanate of Oman.

(This write-up is contributed by the Oman member firm of PKF International Ltd.)