A Quarterly Newsletter from the UAE and Oman member firms of the PKF International Ltd.

VOL 16, Issue 1 January 2014

Oman Update

DUQM SPECIAL ECONOMIC ZONE

Duqm is an Omani dream becoming reality. As the North and South of Oman have been developed, the dream of the Omani government and people has been to give Duqm and the Al Wusta region the opportunity to have its international window. Due to its location on the pristine blue Arabian Sea and its rich resources, Al Duqm can offer world class infrastructure from an industrial, environmental and touristic perspective.

With a land area of 1,777 km2 and 80 km. of coastline along the Arabian Sea, the Duqm Special Economic Zone (DSEZ) is the largest in the Middle East and North Africa region and ranks among the largest in the world. DSEZ has long been envisioned as the place that will balance regional development by energizing the Al Wusta governorate in addition to diversifying sources of national income and creating job opportunities for Omanis.

The Government of the Sultanate of Oman has invested substantial public funds and executed several strategic projects to unlock the economic potential of Duqm, including a multi-purpose commercial port, a state-of-the-art dry-dock facility for ship maintenance, a power plant, a water desalination facility and several connecting roads.

The Special Economic Zone Authority at Duqm (SEZAD) is a government agency that was established and entrusted with the powers and responsibilities of developing and administering the DSEZ to become a regional maritime and transit-trade hub, an important complex for export-oriented industries, and an attractive tourist destination on the Arabian Sea.

Through its one-stop shop, it registers, licenses, and provides environmental approvals using the best international practices. Imports into the zone will be duty-free. Future regulations regarding the Zone’s company registrations, labor, trade, land, taxation, incentives, and so on will be announced in due course. The DSEZ tax regime, land lease rates, and utility tariffs will be provided at competitive rates.

DSEZ is a model of an integrated economic development comprising of a sea port, industrial area, new town, fishing harbor, tourist zone, a logistics center and an education and training zone, all of which are supported by a multimodal transport system that connects it with nearby regions (e.g., the Arabian Gulf countries, Middle East, East Africa and Southeast Asia).

DSEZ offers an attractive package of investment incentives and tax cuts that aim at enhancing the business environment for the private sector and improve its competitive standing, including:

  • Easy and facilitated access to land, based on long-term leases and reduced rates.
  • Removal of restrictions on foreign ownership and minimum investment capital.
  • Waiver/reduction of corporate tax and customs duties.

The above are in addition to the nationally applicable incentives, such as the waiver of personal income tax, convertibility of currency, and the full repatriation of investment capital and net profits.

SEZAD is inviting qualified private sector companies of either Omani or foreign nationality to participate in the development of DSEZ in the field of “site development, promotion and management” to enhance the readiness of the Zone and its business offers to end-users in targeted economic sectors, namely:

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

(This article is compiled by Mr. Ian R. Pereira, a Director in PKF L.L.C., Muscat, the PKF member firm in the Sultanate of Oman.)