Business success in Oman comes from diligent cultivation of clients and knowledge of local market developments. Tenders are often announced with little advance notice and short deadlines. Dormant plans sometimes become active when funds become available. A local agent or local office can monitor and respond to changes in business conditions. Despite the government’s interest in attracting business to Oman, Omani bureaucratic hurdles can be daunting. A local contact can expedite the flow of paperwork and documents. Policy preferences for majority Omani-owned joint ventures, which led to taxation of the profits of majority-foreign owned joint ventures at a substantially higher rate, have been adjusted since Oman joined the WTO. Currently, up to 70 percent majority-foreign owned ventures receive the national tax treatment of 12 percent on profits of more than $78,000 per year.
Foreign companies wishing to distribute their products in Oman face a local agent requirement but are no longer legally required to enter into exclusive agency agreements. In special cases, such as when the government has directly approached a foreign firm, the agency requirement can be waived altogether. Further, in August 2000, a ministerial decision was issued waiving the requirement for a 51 percent Omani-owned company to be able to obtain an import license. Agents are useful though not legally required for sales to the Omani government. Constrained budgets encourage government procurement officials to buy direct; however, in practical terms, it is still difficult for a foreign firm to sell to the government without an Omani agent scouting for and bidding on tender opportunities.
If the foreign manufacturer or supplier does enter into an exclusive agency agreement, it is not permitted to sell or distribute the contract-specified product, good or service itself or through another agent or broker, except for the exemption on bringing goods in through ports or airports. An importer bringing in goods covered by an agency agreement must pay that agent a 5 percent commission if the goods are brought into Oman overland, but this requirement is waived if the goods are brought in via ports or airports.
Separate agency agreements for the northern region (Muscat Area) and the Southern Region (Salalah) are permitted. The manufacturer or supplier may not unilaterally terminate the agency agreement except where there is a justifiable breach of agreement by the agent. Agency agreements must be approved by the Oman Chamber of Commerce and Industry (OCCI) and registered with the Registrar of Agents and Commercial Agencies of the Ministry of Commerce and Industry. The practical effects of this regulation on a foreign supplier are substantial: the Ministry of Commerce and Industry may prohibit the importation of goods and merchandise of suppliers who do not have an independent commercial agent registered in Oman.
In terms of locating an agent, the Embassy's Commercial Section can provide details and background on major Omani companies. In addition to consulting the Embassy, personal visits to potential agents are recommended. Commercial office space is readily available in Oman. Due to the complexity of Omani regulations, it is useful to obtain legal counsel before drawing up an agency agreement. While the Embassy's Commercial Section offers general information on Oman’s commercial regulations, formal legal counsel is advisable for specific questions on labor, investment and tax laws, licensing procedures, and for the resolution of commercial disputes. The Embassy's Consular Section maintains a list of local attorneys, including those specializing in commercial law. The Consular Section can be reached at: phone (968) 24 698-989, FAX (968) 24 699-189.
Advertising is most commonly done through newspapers. There are two daily English language newspapers in which companies can advertise: the Oman Daily Observer and the Times of Oman, which both publish business supplements and are read predominantly by expatriates. The two Arabic dailies, Oman and Al Watan, reach a broader Omani audience and are also published seven days a week. Two independent business monthly magazines, Business Today and Oman Economic Review, began publication in 1998. Advertising is also possible on Omani television and radio and on limited highway signs. There are no private radio or television stations. It is possible to advertise on the Internet and cell phones via Omantel.