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Investment in Oman plays a major role in all developing economies; as it drives its dynamic basics of growth, development, and structural changes. Despite the prevailing economic, political and social circumstances at the Omani renaissance in 1970, the intensive programs on investment during the past four decades along with his majesty prudential guidelines have been able to transfer the modest oil revenues to a developed economic and social infrastructure, essential for leading sustainable development.

In fact, the Sultanate has the infrastructures that encourage and facilitate the national and foreign investment in Oman. Its geographical location that overlooks international and regional sea lanes along with the existence of Omani ports open new horizons for investment and free trading. Moreover, the Sultanate is characterized by its stable economy, strong infrastructure, and qualified human resources that guarantee the easiness of investment in Oman. Not to mention the regulations issued to support this open economic direction and to encourage foreign investments, which are gradually increasing by the Sultanate's engagement in international organizations, international trading organization, and free trading agreement with USA. Oman seeks attracting foreign investment through a number of incentives (Arabic only) such as:

  • Competitive services' prices.
  • Tax exemption for five years and it could be longer under certain conditions.
  • No income tax for individuals.
  • Freedom of transferring capitals and profits and freedom of exchanging foreign currency with fixed exchange rate.
  • Full foreign property right: Property rate starts from 70% to 100% after obtaining the ministers' council consent.
  • One Stop Shop service: It helps investors to get all the inquiries and transactions they need as soon as possible.
  • Opening new office or representative office for foreign companies in Oman: Companies that run their businesses with the Government are allowed to open new offices or commercial representative offices in Oman.
  • Various forms of business entities and its main advantages: Investors can form more than one legal entity in order to organize their business. Such entities are: public joint stock companies, public closed cooperation, limited liabilities companies, and holding companies. (For more information, follow the incentives link)

Within the framework of economic diversification based on exports, the Sultanate aims at the exploitation and industrialization of its natural resources; especially natural gas, and the increase of added value to those resources as the government had concentrated its efforts for marketing theses resources. The constant efforts resulted in signing agreements to establish some big industrial projects with the partnership of foreign capitals such as Polypropylene, Urea and Ammonia, Methanol, and Aluminum Smelter, Steel and Iron projects besides to other projects such as fertilizers project in Sur, and Qalhat Company for Natural Liquid Gas.

Investment Opportunities in Oman
Stressing on the importance of economy variation and magnifying the benefit of the strategic position of the Sultanate, besides to the consideration of the benefits gained by the foreign investment, the Government has adopted the idea of establishing some free zones in different parts of the Sultanate. These free zones are:

  • Slalah Free Zone.
  • Slalah Port.
  • Sohar Industrial Port.
  • Sohar Free Zone.
  • Mazyona Free Zone.
  • Masandam Free Zone.

You can find information in the portal on the Free Trading Zones or you can have a look at this document on the investment opportunities in Oman (Arabic only). These zones are considered to be great attractive zones, due to the completed infrastructures. Also, there are a lot of various opportunities in the field of infrastructures services projects, educational projects, oil, gas, health, tourism, and information technology.

In this regard, the Ministry of Commerce and Industry the Public Announcements service which helps to predict the trends and make strategic decisions improving the business environment for the good of Oman.

Exports and Imports in Oman
As one goal of the Sultanate first development plan states:" Working on finding a new national income that supports oil revenues and supersedes it in the future," the Sultanate deems it essential that it develops its non-oil exports and achieves the benefits expected from contacting the world through multi-national network by opening new markets for Omani products.

The Public Authority for Investment Promotion & Export Development is considered the main source of information about exports and imports in Oman. It pursues the Export Development Strategy (Arabic only) that will help to develop the non-oil exports in Oman. You can read more on the industrial exports in Oman through this paper that was presented at the Industrial Conference 2014 in Muscat.

Prizes
The Public Authority for Investment Promotion & Export Development got the UN trading and development conference prize (ONCTAD) as the Best Institution for Promoting Foreign Investment Directed to Exports in 2012.

 

We will lower corporate tax rates by 5 percent and reduce our reliance on bonds. We hope to reduce the budget deficit by increasing the salaries of government employees at rates less than the inflation rate, Iran's finance minister Dr. Ehsan Khandouzi wrote in an article for Financial Times.

The full text of the article is as follows

In Iran, sanctions, currency fluctuations, and high inflation rates have led to subpar economic performance and a negative growth rate in recent years. Other adverse shocks such as the Covid-19 pandemic and natural disasters have further increased the fiscal pressure. Hence, the budget has grown faster than inflation — that for 2021 was about three times that for 2019.

I do not yet know what the outcome of Iran’s current nuclear negotiations with the 4 + 1 in Vienna will be. Regardless, we must take a cautious approach to our next budget so as not to upset the administration of the economy. Our government’s strategy was first to stabilize the economy and then to stimulate inclusive growth. In the past few months, part of the first goal was achieved, with point-to-point inflation decreasing on a monthly basis (from a 3.8 percent increase to 1.6 percent). The 2022 budget framework, which begins with the Iranian new year on March 21, must continue this strategy.

Given the current sanctions-related obstacles to exporting crude oil, the previous government’s strategy in financing the growing budget deficit increased our reliance on the bond market. The repayment and settlement of these debts are the responsibility of the new administration. We have also tried, over our seven months in office, to sell more oil under the existing restrictions (with an increase of 40 percent) and to raise tax revenues.

The recent mushrooming of Iran’s budget was a direct result of an increase in the government’s current expenditure, while its investments in various sectors have declined. This, along with widespread uncertainty over the country’s economy because of the pandemic, has also led to a decline in private sector investment. This, in turn, has resulted in a negative net investment in recent years, severely undermining future production and household welfare.

Against this background and in response to growing inequality, the new government has sought to change the course of fiscal policy. Our aim is to promote economic growth, price stability, and inclusive growth. We also seek institutional reforms to improve financial discipline and reduce spending.

As such, our budget for 2022, which is already approved by the parliament, includes several structural reforms. We will lower corporate tax rates by 5 percent and reduce our reliance on bonds. We hope to reduce the budget deficit by increasing the salaries of government employees at rates less than the inflation rate. We also predict increased oil export revenues.

Iran’s new budget is designed to promote equitable growth, including by increasing government investment. The public sector must play a more active role in investing in physical capital. Capital asset acquisition declined from 24 percent in 2012 to 14 percent in 2021 but, in the new budget, the share of credits for acquiring capital assets has increased by 4 percent. This is an essential step in strengthening public investment.

We also wish to reduce the growth in current expenditure. In the 2021 budget, this stood at around 60 percent. This has been reduced to 38 percent in the new bill.

Finally, we plan to increase tax revenues. Despite the reduction in corporate tax rates, the government has increased its reliance on sustainable tax revenues instead of mainly depending on oil. This has come about through substantial reforms to the tax system as well as by increasing financial transparency to reduce tax evasion and introducing a capital gains tax.

Our models suggest that Iran’s new budget will lead to positive medium-term outcomes in variables such as output, investment, employment, and inflation. The approach adopted in the 2021 budget is expected to reduce inflation significantly in the next three years. Moreover, total investment and non-oil production will grow more quickly.

Needless to say, the government is determined to keep the money supply and monetary base under tight control. This will require significant reforms in the banking sector, as well as in areas outside the government budget (such as pension funds, the national wealth fund, and so on). The current negotiations in Vienna could potentially lead to positive economic outcomes for Iran, especially in the banking sector and foreign exchange. We are ready for whatever scenario emerges — pessimistic or otherwise.

 

 

 

 

Deputy Minister of Management Development and Resources of the Minister of Economy in the farewell ceremony and introduction of the new and former Director General of Economic Affairs and Finance of Qom Province, referring to the slogan of 1401 and its relationship with the Ministry of Economic Affairs and Finance said: removing barriers to production, financing and tax reduction Production is one of the programs of this ministry in order to fulfill the slogan of the year.

Zabihullah Salmani; Deputy Minister of Management and Resources Development of the Ministry of Economic Affairs and Finance added: The basis of action of the Ministry of Economic Affairs and Finance for 1401 is the strategic plan of this ministry, which should be seriously on the agenda of different departments of this ministry.

Referring to the ministry's plan for the development of foreign investment, he said: "Investment security and the removal of barriers along with improving the business environment are prerequisites for the development of foreign investment in the country."

He said: "The approach of the Ministry of Economy is to facilitate the issuance of investment licenses and intensify supervision after the issuance of licenses with the aim of increasing income and increasing the employment rate of the country."

کتاب عملیات بانکی در عرصه بین الملل -سرفصل ها،ضمائم ،توصیه صاحب‏نظران ارزی و مدیران ارشد بانکی

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