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INVESTING IN Oman FROM OVERSEAS
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Omani Riyal
The Omani Riyal is pegged to the US$ at a rate of OR0.384, one Omani Riyal is US$2.604. It is therefore steady purchasing currency where source funds are held in a dollar related form.
Economic climate
There is still no personal income tax in Oman. A uniform corporate tax rate of 12 per cent applies. Prior to this announcement all companies with 70 per cent plus foreign ownership were subject to the top rate of corporation tax at 30 per cent. This is in keeping with the GCC trend to encourage overseas investment. An Omani delegation has also visited Dubai to review the Dubai economic model for tourism and real estate development.
Capital gains tax
Capital gains tax does not exist in Oman and any other form of housing tax is yet to be defined n ongoing legislation, but is unlikely in the near term.
Popular areas
The Dhofar region is set to become a tax-free tourist location as major reforms are introduced to encourage foreign investment in Oman. Luxury golf property is planned in Muscat, which will also be highly attractive to potential expatriate owners.
Overseas investors
Legislation permitting foreign ownership on specific real estate projects has now been passed, allowing freehold ownership by all nationalities in so-called tourist designated areas. This allows foreigners to buy for either investment or occupation purposes. All owners will be granted residency visa rights.
Service fees
There is no service fee structure as such. A structured payment system is designed to incorporate all fees. According to this, US$2,604 is payable on application for reservation, a balance of 15 per cent is payable 21 days from reservation application, 15 per cent on completion of property foundations, 20 per cent on completion of roofing, 20 per cent on completion of electrics and plumbing and the last 30 per cent on final handover of the property.
Main features of the foreign ownership law:-
- Non- Omanis, both natural and legal persons, can own land or constructed real estate
units in what are termed integrated tourist complexes, which will be nominated in the
regulations.
- The owner (developer) has an obligation to develop the land for the intended purpose
within four years of ownership.
- Once the owner (developer) has developed the real estate for the intended purpose, he
may dispose it off at anytime.
- A non-Omani purchaser of a real estate unit from the owner (developer), and his
children, maybe granted the right to residence in Oman by virtue of ownership of the
real estate unit.
- If the owner (developer) fails to develop the real estate within the stipulated time,
then the relevant authority is empowered to dispose it off by selling it through public
auction.
- Succession to a real estate unit from a purchaser who dies will be determined by the
laws of succession of his home country.
- The law has also ratified all transactions that have already taken place in relation to
non-Omani ownership prior to this law.
Foreign ownership legislation
Until recently only GCC nationals were the only foreigners allowed to buy land in
Oman according to Royal Decree 21/2004 which extend land ownership rights to GCC
national and GCC corporate entities (wholly owned by GCC nationals). However, the
Royal decree 12/2006 which was announced recently, expands foreign ownership rights
to include non-GCC nationals as well. The executive regulations of the new law are
expected to be issued shortly by the Ministry of Housing, Water and Electricity. |
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