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Free Zones in Oman

As the free zones/special economic zones in Oman continue to grow and attract foreign as well as local investors, we thought of doing an overview of the free zones – their incentives and limitations.

The Free Zones Law promulgated by Royal Decree 56/2002 (the "FZ Law") is the law enabling establishment of free zones in Oman. The FZ Law specifies that each of the free zones shall be established by a Royal Decree which will specify its location, boundaries and the incentives and privileges granted to the operator of such free zones and the operating companies. The free zones are primarily established by the State to boost foreign investment by making it business-friendly.
The Sultanate of Oman presently has four free zones namely, Salalah Free Zone, Sohar Free Zone, Al Mazunah Free Zone and Al Duqm Free Zone. All these free zones are established pursuant to Royal Decrees and are operated in accordance with the relevant executive regulations approved by the Free Zones Committee.
In addition to providing certain privileges and incentives to the free zone companies, the companies operating free zones (the "FZ Operators") are also obliged to provide the requisite infrastructural facilities conducive to the contemplated business operations in the free zones.
Operations in Free Zones
Whilst considering setting up an entity, it is important for a foreign/local entity to consider the permitted business activities in the particular free zone. The free zones generally allow establishment of industrial and processing units, manufacturing and assembling facilities, logistics and distribution centres and services providers which can service the entities established within the free zone. Further, each of the free zones specifies the form of entities that can be registered within that free zone.
Setting up an entity within a free zone is far more attractive, easier and quicker for the following reasons:
A dedicated "one-stop shop" to provide required government permits, land pursuant to lease agreements, consents and approvals (e.g., health, safety and environment) to the companies incorporated with the free zone;
  • 100% foreign ownership
  • No minimum capital requirement
  • Exemption from restriction on provision, circulation and transfer of foreign currency
  • Exemption from the application of the provisions of the Commercial Agency Law
  • Corporate tax holiday for a certain number of years
  • No custom duties for the goods imported into or exported from the free zones
  • Lower Omanisation requirements as compared to an entity registered in 'onshore' Oman
  • Convenient access to transportation infrastructure through the highways and sea ports (out of the four free zones, three are established next to the major seaports in Oman)
  • Utility connections (e.g., electricity, water and gas) with tariffs that are often pre-arranged
  • Visas and residency permits to non-Omanis working in the free zones
  • Allows establishment of representative offices within Oman's custom territory
  • Although the incentives outnumber the limitations of registering a company in a free zone, it is important to point out a few limitations which an investor may come across
  • The permitted activities within the free zone are limited those specified in the relevant Royal Decrees and Executive Regulations establishing each of the free zones
  • Although importation into the free zone itself is duty free, the normal 5% customs duty is payable on any products sold by a free zone into the customs territory of Oman
  • FZ Operators often have the right to change the utility tariffs
Salalah Free Zone
Since the establishment of the Salalah Free Zone company by a royal decree, it has been aim to be the market leader in the ownership, development and operation of a state-of-the-art global leading hub for quality industrial and Logistical activities .Its focus is on working with tenants helping them grow their business.

Salalah: P.O. Box 87, PC 217, Al-Awqadain, Sultanate of Oman, Tel: (+968) 23132500, Fax: (+968) 23212998, E-mail:

Muscat: P.O. Box 258, PC 134, Jawharat Al'Shati, Sultanate of Oman, Tel: (+968) 24601333, Fax: (+968) 24694555, E-mail:
Sohar Free Zone
Sohar Port and Freezone is a deep-sea Port and Freezone in the Sultanate of Oman, managed by Sohar Industrial Port Company (SIPC), a 50:50 joint venture between the Port of Rotterdam and the Sultanate of Oman

Head Office: Sohar Industrial Port Company , PO Box 9, Postal Code 327, Sohar, Sultanate of Oman

Visiting Address:SOHAR Port and Freezone, Tel: +968 26852700, Fax: +968 26852701

Branch Office:SOHAR Industrial Port Company, PO Box 777, Postal Code 116, Mina Al-Fahal, Sultanate of Oman

Visiting Address:Beach Oasis, Way 3036, Building 2838, Shatti Al-Qurm, Muscat, Sultanate of Oman Tel: +968 24697830, Fax: +968 24697831
Al-Mazyunah Free Zone
Al-Mazunah Free Economic Zone commenced operations in November 1999 and is located in Oman's southern region of Dhofar, close to the Yemen border. The Free Zone is located 260 kilometres from Salalah, 245 kilometres from Al Gaydah and 500 kilometres from Sayun, the two closest Yemeni cities. Given the nature of the Free Zone it lies outside the lit of Oman's tax boundaries, and as such, businesses are able to enter Al Mazunah without visa or completing border procedures between Oman and Yemen. Indeed, Al Mazunah offers excellent opportunities to those wishing to trade goods through Oman into Yemen, or locate warehouse facilities. The Free Zone occupies 450 hectares which is divided into 100 plots ranging in size from 2,000 to 16,000 square metres. To date, 21 businesses and an exhibition area are in operation on the Free Zone.
Duqm Free Zone
The Special Economic Zone in Duqm (SEZAD) has been established as per the provision of the Royal Decree No 119/2011 issued on 26TH October 2011. The establishment of SEZAD crowns the great efforts made by the Sultanate to diversify sources of national economy. SEZAD stretches over 2,000 square kilometer with 60km long beach front. We have started developing 45% of the area, about 800 km. The remainder part of the area is left for the future expansions.

Muscat Office: Special Economic Zone Authority Duqm 4th foor, AL Mashriq Building, No.113, Street No. 70, Block No. 248, Muscat, Oman

Address:P.O. Box 25, P.C. 103 Bareeq Al Shatti, Fax: +968 245 874 00,

Branch Office:SOHAR Industrial Port Company, PO Box 777, Postal Code 116, Mina Al-Fahal, Sultanate of Oman

Visiting Address:Beach Oasis, Way 3036, Building 2838, Shatti Al-Qurm, Muscat, Sultanate of Oman Tel: +968 24697830, Fax: +968 24697831

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