Can foreigners do business in Oman? The opportunities, and the right set-up for Finnish and Italian companies

Yes. Since 2020 a foreign company can own 100% of an Omani company in most activities, and the clearest openings are in manufacturing, hydrogen, logistics and mining. The real choice is the set-up: EDON suggests choosing it from your first customer, with a mainland company to sell locally, a zone company to make and export, an agent to test demand.

Can a foreign company own 100% of a business in Oman?

In most activities, yes. The Foreign Capital Investment Law (opens in a new tab) (Royal Decree 50/2019) ended the old requirement for an Omani partner in January 2020. What remains is a list of activities closed to foreign capital, kept by the Ministry of Commerce, Industry and Investment Promotion. It reached 123 entries in September 2024 (opens in a new tab) and includes traditional handicrafts, the retail sale of certain goods, used-car sales and some local services; most of manufacturing, construction and energy is open.

Ownership brings staffing duties. Since October 2025 every foreign-invested company must employ at least one Omani (opens in a new tab), registered with the Social Protection Fund, within a year of starting operations (Ministerial Decision 411/2025), and sector quotas come on top. Omanis held about 22% of private-sector jobs at the end of 2025, against more than 90% in government, according to the National Centre for Statistics and Information (opens in a new tab), and missing a quota now has a price: since June 2025, government bodies may not award contracts to companies below their Omanisation levels (opens in a new tab).

Where are the business opportunities in Oman?

Start with the government's priorities, because that is where it now offers tax breaks and, in some cases, signed buyers. The Eleventh Five-Year Plan (opens in a new tab) (2026 to 2030) names manufacturing, tourism and the digital economy as priority sectors and targets average growth of about 4% a year (opens in a new tab). Invest Oman, the ministry's investment platform, also promotes food security, logistics, healthcare and energy, and says it helped 45 projects worth OMR 4.0 billion (opens in a new tab) settle between 2023 and mid-2026. Country risk has also fallen: Oman now holds an investment-grade rating (opens in a new tab) from all three major agencies, the latest from Fitch in December 2025.

The push for new sectors starts from a narrow base. Foreign direct investment reached OMR 32.2 billion (opens in a new tab) by the end of June 2026, four-fifths of it in oil and gas, and new inflows in 2025 (opens in a new tab) were a third lower than in 2024 (Exhibit 1).

Exhibit 1. Four-fifths of foreign capital in Oman is still in oil and gas. Source: National Centre for Statistics and Information (NCSI), preliminary data, released via the Oman News Agency, 18 July 2026 (Q1) and 17 October 2026 (Q2).

The openings are concrete in four areas (Exhibit 2). In hydrogen and mining, the realistic way in for a mid-sized company is as a supplier. Hydrom, the state's green hydrogen company, signed two projects worth $11 billion (opens in a new tab) in its second auction round alone. The mining projects buy their process equipment from specialists: Minerals Development Oman signed a $30 million contract (opens in a new tab) with Finland's Metso for the concentrate plant of its Mazoon copper project. In logistics the draw is Sohar: Hafeet Rail, a 238 km line linking Sohar Port to the UAE's rail network, is due to begin trial operations (opens in a new tab) in the last quarter of 2027, after which a base there will reach the UAE by rail as well as by road and sea.

Exhibit 2. Four areas offer concrete openings; only manufacturing comes with committed buyers. Source: Ministry of Commerce, Industry and Investment Promotion, 30 May 2026; Eleventh Five-Year Plan (Oman Observer, 2026); Hydrom via Oman Observer and gasworld (2025); Gulf News on Hafeet Rail; Royal Decree 38/2025 and Decision 81/2026 (PwC, September 2026); Oman Observer, 16 January 2025; Global Mining Review, 18 June 2025.

Manufacturing goes furthest. In May 2026 the ministry offered seven factory projects (opens in a new tab), worth OMR 38.9 million in all, in which designated buyers commit in advance to take part or all of the output (Exhibit 3). For a new plant, a buyer under contract matters more than a tax holiday, which is worth nothing until the plant makes a profit.

Exhibit 3. Oman now offers factories with buyers committed before production starts. Source: Ministry of Commerce, Industry and Investment Promotion (Invest Oman), announcement of 30 May 2026; Oman Observer and Muscat Daily, 30 May 2026.

Mainland company, free zone or agent: which set-up fits?

The one that matches your first customer and what you will do for them in Oman (Exhibit 4).

Exhibit 4. Your first customer decides the set-up. Source: Foreign Capital Investment Law (Royal Decree 50/2019); Ministerial Decisions 209/2020 and 435/2024; Ministerial Decision 411/2025; Law of Special Economic Zones and Free Zones (Royal Decree 38/2025, Articles 12, 19 and 27) and its executive regulation (Decision 81/2026; PwC and KPMG, September and October 2026); PwC Worldwide Tax Summaries, Oman (reviewed 7 July 2026); Commercial Agencies Law (Royal Decree 26/77, as amended).

Choose a mainland company, an LLC licensed under the Foreign Capital Investment Law, to sell inside Oman; it is also the practical route for most government and energy work. An LLC needs no minimum capital under the Commercial Companies Law of 2019, and a foreign company may open a branch only to carry out a contract with a government or quasi-government body, or a project of national economic importance (PwC, Doing Business in Oman (opens in a new tab)).

Government and energy buyers score local content, much as Saudi buyers do (see our piece on Saudi local content): the Authority for Projects, Tenders and Local Content, the renamed Tender Board secretariat (Royal Decree 57/2025 (opens in a new tab)), sets local-content requirements (opens in a new tab) for project contracts above OMR 3 million. Corporate income tax is 15%, or 3% for a small company with capital up to OMR 60,000, gross income up to OMR 150,000 and no more than 25 employees (PwC (opens in a new tab)).

For exports, a zone company is usually the better fit. The special economic zone at Duqm and the free zones at Sohar, Salalah and Al Mazunah now share one law (opens in a new tab), Royal Decree 38/2025, whose executive regulation (opens in a new tab) took effect on 21 September 2026. A qualifying company can receive a 10-year income tax exemption from the start of its activity, renewable twice, to 30 years, for activities of a special nature such as heavy manufacturing, green industries, port logistics, advanced technology, food security and pharmaceuticals. Banks, insurers, telecoms, contractors and transport firms are excluded. A zone company can open a representative office elsewhere in Oman, but goods it sells there go through customs (Articles 12 and 19 of the law), so the case is strongest when most output leaves the country. Choose the zone by logistics, and compare land terms and staffing rules as well as tax: Sohar for the north and the UAE, Duqm for heavy industry and energy on the Arabian Sea, Salalah for the south.

An agent or distributor needs no Omani company at all. Agency contracts are registered with the ministry under the Commercial Agencies Law, the agent must be an Omani national or an Omani-owned company, and a representative office may promote but not trade. It is the cheapest way to test demand and the weakest position for tenders and service work, so agree at the start how the agency ends if you later set up your own company.

Whichever set-up you choose, budget for VAT at 5% and a 10% withholding tax (opens in a new tab) on royalties, management fees and many services paid to foreign companies (withholding on dividends and interest is suspended). From 2028 a 5% personal income tax (opens in a new tab) applies to individuals earning more than OMR 42,000 a year, which will reach some expatriate managers.

How do foreign suppliers get in front of Omani buyers?

Through a handful of doors, each tied to one kind of buyer (Exhibit 5). Nama PWP, Oman's single buyer of power and desalinated water, publishes seven-year statements (opens in a new tab) that list its projects years ahead, and suppliers sell to the developers and contractors that win them. Oil and gas operators and concession companies accept bids only from suppliers with an active certificate on the Joint Supplier Registration System (opens in a new tab) (JSRS), a rule the Ministry of Energy and Minerals has applied since July 2021. Government bodies tender under the Authority for Projects, Tenders and Local Content and check a bidder's Omanisation level before award. For agents, distributors and partners, the Oman Chamber of Commerce and Industry hosts business forums with one-to-one meetings when foreign delegations visit, and trade fairs such as Oman Sustainability Week bring buyers onto one floor.

EDON suggests working back from a named buyer: choose the field where your strength meets a stated Omani need, get qualified at the door that buyer uses, and let your home country's trade agency arrange the first meetings. Early in the work, EDON puts a high-value, usable deliverable in your hands, something you can act on and keep, before you commit further. We call it the Head Start. If Oman is on your list, EDON offers a free 30-minute sparring session, with no obligation: edon.fi/book (opens in a new tab).

Exhibit 5. Omani buyers of scale buy through a few doors. Source: Nama PWP 2025 annual report and seven-year statements (Zawya, 2026; Oman Observer, 1 January 2026); Business Gateways International, the JSRS operator (support article, read 9 November 2026); Times of Oman, June 2025, and Oman Observer (tenders and Omanisation); Ministry of Commerce, Industry and Investment Promotion, 30 May 2026; Oman Chamber of Commerce and Industry via Times of Oman, 8 February 2026; Times of Oman, 2025 (Oman Sustainability Week).

What should Finnish companies know?

Finnish firms sell little to Oman today, yet several Finnish strengths match what Oman is now buying. Finnish goods exports to Oman were only about $31 million in 2025 (opens in a new tab), led by machinery, electrical equipment and wood (UN Comtrade), but Finnish firms win project work there: besides the Mazoon contract, Metso is supplying process equipment for an iron ore concentrator (opens in a new tab) in Oman, and Wärtsilä's maintenance contract (opens in a new tab) for the 120 MW Musandam power plant was extended by seven years in 2025.

The match is clearest in five fields (Exhibit 6). When a Finnish ministerial delegation visited Muscat in January 2025, the Omani side pointed to information technology, mining, education and telecommunications (opens in a new tab); the Finnish themes were sustainable mining, the circular economy and digitalisation (opens in a new tab), with Nokia, Wärtsilä, Mining Finland and the Geological Survey of Finland among the 13 companies and bodies on the trip. Power and water add large, scheduled demand: Nama PWP has about 1,600 MW of solar and wind in procurement (opens in a new tab), plans two new desalination plants (opens in a new tab) and has opened qualification (opens in a new tab) for the country's first waste-to-energy project. Most of this can be sold from Finland, as equipment, software, services or training, before any company is set up in Oman.

Exhibit 6. Five Finnish strengths match what Oman is buying. Source: Oman Daily (Oman News Agency), 16 January 2025; Finnish Government, 13 January 2025; Business Finland, delegation programme (updated 28 November 2024); Oman Observer, 16 January 2025 and 1 January 2026; Global Mining Review, 18 June 2025; Wärtsilä, 5 February 2026; Nama PWP via Zawya (2026) and TaiyangNews (2023); Eleventh Five-Year Plan (Oman Observer, 2026).

The matchmaking runs through Team Finland. Business Finland's Riyadh office (opens in a new tab) handles requests for the whole Arabian Peninsula and organised the January 2025 visit (opens in a new tab) with Mining Finland; Finnvera, Finland's export credit agency, travelled with it. The Finnish-Arab Business Association met an Omani delegation during Slush (opens in a new tab) in November 2025. Finland's embassy (opens in a new tab) in Riyadh covers Oman, and an honorary consul works in Muscat.

The framework has one gap. A bilateral investment treaty (opens in a new tab) has protected Finnish investors since 1999, but Finland and Oman have no tax treaty (opens in a new tab), so Oman's 10% withholding on services, royalties and management fees applies without treaty relief. Price service and licence contracts with that in mind, and ask your tax adviser how much of it Finland will credit.

For most Finnish suppliers EDON sees a sequence: sell through an agent, or a branch for a government contract, and set up a company once service and maintenance revenue can carry Omani staff and a local-content record.

What should Italian companies know?

Italian companies already sell to Oman and have fresh political backing, so the open question is how to move from selling through agents to a presence that can bid for projects. Oman imported goods worth OMR 150.7 million from Italy in 2025 (opens in a new tab) and exported OMR 33.6 million there (National Centre for Statistics and Information); Italy's embassy ranks Italy as Oman's 12th supplier, second in the EU after Germany (business guide 2025 (opens in a new tab)), and machinery makes up about half of what Oman buys from Italy ($213 million of $412 million in 2024 (opens in a new tab), UN Comtrade). Eni, Saipem, Prysmian and Telecom Italia Sparkle already work in the country.

The backing is now concrete. Prime Minister Giorgia Meloni's visit on 14 January 2026 ended with a joint statement (opens in a new tab) on trade, investment, industry and public-private partnerships, and a 2026 to 2030 action plan to follow up the agreements. SACE, Italy's export credit agency, signed a memorandum (opens in a new tab) with Khazanah Modern Oman covering infrastructure, manufacturing, food, renewable energy and hospitality, and the Italian Trade Agency reopened its Muscat desk (opens in a new tab) in March 2024. A tax treaty and an investment treaty in force since 1997 (opens in a new tab) complete the framework.

The match reaches well beyond machinery (Exhibit 7). The embassy's guide points Italian firms to the energy transition (contracting, maintenance, components and skids), sustainable ports, rail and freight, mining and premium hospitality, and the business forum the Oman Chamber of Commerce and Industry held with an Italian delegation on 8 February 2026 (opens in a new tab) added railway engineering, rolling stock, rail electrification, steel structures and backup power. Oman's side of the match is in its project lists: Hafeet Rail, about 1,600 MW of solar and wind in procurement, and 15 integrated tourism complexes worth OMR 2.8 billion (opens in a new tab) licensed between 2020 and 2025.

Exhibit 7. Machinery leads Italy's sales to Oman; Oman's projects open four more fields. Source: UN Comtrade via Trading Economics (2024); NCSI via Oman Observer (2024 trade data); Italian Embassy in Muscat, business guide 2025 (pp. 31 to 33 and 46 to 49); Oman Chamber of Commerce and Industry business forum via Times of Oman, 8 February 2026; Nama PWP (Oman Observer, 1 January 2026); Ministry of Heritage and Tourism via Zawya (2026); Invest Oman via Oman Observer (2026).

The matchmaking tools are in place. The Italian Trade Agency desk in Muscat looks for partners and organises one-to-one meetings, delegations and pavilions at fairs: 17 Italian companies (opens in a new tab) exhibited in its first national pavilion, at Oman Sustainability Week 2025, and 10 electrotechnical companies (opens in a new tab) toured Oman in February 2026. Selling equipment can start through an agent; the project and service work in Exhibit 7 needs a local company or a zone presence.

When is Oman the wrong move?

Oman has about 5.4 million people (opens in a new tab), 43% of them expatriates. If your real customers are in Saudi Arabia or the UAE, doing business in Oman pays only as a production or logistics base with a reason to be there, such as a signed buyer, a zone incentive or the rail link. It is also the wrong move if your activity is on the reserved list, if you cannot recruit and train Omani staff, or if the plan rests on one government contract with no local-content plan behind it. Before you commit, ask your insurer and your shipping line what the region's security situation adds to your costs.

The decision to make next

Before choosing a set-up, write down the first customer you will serve, the door through which that customer buys (Exhibit 5), what you will do for them in Oman and the revenue you expect there in the first two years. A government or energy customer means a mainland company with a local-content plan. An export business belongs in a zone chosen for logistics and tax. If demand is still a guess, start with an agent on terms you can end.

EDON, a strategy and transformation firm based in Finland, helps owners and leadership teams of mid-sized companies in Finland, Italy and the Middle East decide where and how to enter a market, and stays through implementation; see our market entry work.

The rules described are those published by 8 November 2026. This is not legal or tax advice: confirm the structure with Omani counsel and your tax adviser.