NEW LAWS ON FOREIGN INVESTMENTS AND PRIVATE SECTOR INVOLVEMENT
His Majesty Sultan Qaboos bin Said issued five Royal Decrees on 1 July 2019, all aimed at attracting foreign investments and private sector involvement, as mentioned below:
- Royal Decree 50/2019 promulgates the Foreign Capital Investment Law
- Royal Decree 51/2019 promulgates the Privatisation Law
- Royal Decree 52/2019 promulgates the Law on Partnership between Public and Private Sectors
- Royal Decree 53/2019 promulgates the Bankruptcy Law
- Royal Decree 54/2019 establishes the Public Authority for Privatisation and Partnership and its System Law
These laws promote the private sector to play an important role in the development of the country’s economy and create more job opportunities. With the establishment of Public Authority for Privatisation and Partnership, private sector would have a greater role to play in the development of the economy. Executive Regulations of the Law and the decisions necessary for the implementation of its provisions will be issued within six months.
Brief overview of each of these laws is explained below:
Foreign Capital Investment Law
The objective of this law is to attract foreign investment and promote Oman’s position as an investment destination. It also aims to strengthen country’s competitiveness in line with the international indicators through the Legislative System. Necessary permits and procedures required to make the foreign investment will be streamlined through Investment Service Centre of the Ministry of Commerce & Industry. It will expand the investment sectors to the foreign investors for strategic projects which will contribute to economic development. Further, to attract foreign investments, the law will offer benefits, incentives and necessary guarantees for investment projects. A Decision by the Oman Council of Ministers may decide preferential treatment for foreign investors in accordance with reciprocity principle.
Requirements of land and real estate for the investment projects may be allocated through long-term lease without being subject to the provisions of Royal Decree no.5/81 after co-ordination with the relevant Authorities.
The objective of this Law is to implement the policies of Government in relation to increasing the role of private sector in ownership and management of various economic activities.
It also targets to promote/attract investments, expertise, knowledge and technology.
Over and above that, it focuses on raising management efficiency, improve services and create better quality of job opportunities for the development of the capital market.
The objective of the Law is to follow the policies set by the Government aimed to improve the country’s economy, encourage the private sector to invest in infrastructure projects and public services, to diversify national income sources, bettering the quality and standards of public services and contribute to lessening of the financial burden on the budget of the State.
Public-Private Partnership Law emphasizes on the process and requirements for launching, awarding, studying,
evaluating the public-private partnership projects, conditions for the formation of public-private partnerships, to manage the partnership projects and general provisions relating to their regulation, supervision and grievances.
The objective of Bankruptcy Law is to create a regulatory and legal framework that encourages the business environment by restructuring the procedures that enable business owners/investors to overcome the debt stage.
The Law will, arrange, regulate and develop the legal provisions governing Bankruptcy to solve the issues identified by the respective Authorities. The Law also aims to support the distressed business owners, restructure their business and promote investment and entrepreneurship through setting up a pre-preventive composition stage called “Restructuring”. The Law will standardize the preventive composition in accordance with the latest legislation and set out provisions on bankruptcy based on the rights of bankruptee, creditors and interest of the public, and will develop procedures governing this matter.
Public Authority for Privatisation and Partnership and its system
The newly established Public Authority will have a legal identity that will enjoy administrative and financial autonomy. All employees and assets of the Oman Authority of Partnership for Development and the Department of Privatization at the Directorate General under the ministry of Finance shall be allocated and transferred to the new Public Authority.
(This article is compiled by Sohil Surani, Deputy Manager in PKF L.L.C., the PKF member in the Sultanate of Oman)