Overview

• By virtue of Oman Sultani Decree No. 5/1980 on Regulating Use of Lands in the Sultanate, all lands within the jurisdiction of Oman are state owned, unless registered in the name of a private person, juristic or individual.
• Oman Sultani Decree No. 5/1980 also prohibits non-Omanis from purchasing land in Oman unless an exemption is granted by way of a special Royal Decree.
• This Practice Note will discuss the corporate structure for non-Omanis while investing in real estate properties in Oman.

Practical Guidance

• Foreigners can choose more than one structure for investing in Oman.
• According to Oman Sultan Decree No. 76/2010 Promulgating Corporate Ownership of Land and Real Estates, a juristic person having foreign ownership (with at least 30% Omani shareholding) must be incorporated as a joint stock company (closed or general) to purchase land in its own name and the land must be developed within four years. The land cannot be sold as sub-divided plots but only after development. Under this regulation, the land can be bought anywhere in Oman, except the ones stated above.
• In order to buy a property in its own name as an administrative building, warehouse, factory or any other purpose meant for the operation of business, a juristic person having foreign ownership (with at least 30% Omani shareholding) can take the form of either a joint stock company (SAOC) or limited liability company (LLC).
• Oman Sultani Decree No. 12/2006 on the System of Real Estate Acquisition by Non-Omanis in Integrated Tourism Complexes specifically allows real estate acquisition by non-Omanis in specific pockets, known as Integrated Tourism Complexes (ITC) as finally built up units or land for further development. In this case, foreigners can make 100% foreign investment on built-up units. The land cannot be sub-divided and sold as plots without development but can be given on usufruct.
• In order to develop the lands within ITC, the foreigner must incorporate a company in Oman, which can be an LLC or an SAOC.
• If the foreigner is seeking a facility arrangement in Oman, then the company must take a form of an SAOC, as the preferred legal form of the bankers in Oman.
• Oman has many tax treaties with other countries and a tax efficient structure could be put in place depending on the investor country.
• Also, within Oman, the project company must ring fence financial liabilities of the borrower company and secured assets, s it may be necessary.
• Foreigners can invest through Real Estate Investment Funds (REIF) which allow 100% foreign investment. REIF can be just a fund or an SAOC, and can own a blend of land and other assets.

Related Content

Legislation

• Oman Sultani Decree No. 5/1980 on Regulating Use of Lands in the Sultanate
• Oman Sultani Decree No. 2/1998 Promulgating the Land Register Law
• Oman Ministerial Decision No. 43/1998 on the Regulations of Corporate Ownership and Registration of Real Estate
• Oman Sultani Decree No. 12/2006 on the System of Real Estate Acquisition by Non-Omanis in Integrated Tourism Complexes
• Oman Sultani Decree No. 21/2004 on Regulating the Ownership by GCC Nationals of a Property in the Member State
• Oman Sultani Decree No. 76/2010 Promulgating Corporate Ownership of Land and Real Estates
• Oman Ministerial Decision No. 5/2011 Regarding Commercial or Residential-Commercial or Industrial Lands Ownership
• Oman Sultani Decree No. 29/2018 Promulgating the Law Prohibiting Ownership of Lands and Real Estate Properties by Non-Omanis in Certain Places
• Oman Ministerial Decision No. 43/2012 Organizing Areal Extensions and Increases for GCC Citizens, Non-Omanis and Omani Juridical Persons
• Oman Sultani Decree No. 29/2013 Omani Civil Transactions Law
• Oman Sultani Decree No. 5/1981 on the Usufruct Law
• Oman Sultani Decree No. 88/1982 on the Executive Regulations of Oman Sultani Decree No. 5/1981 on the Usufruct Law