Oman Market Entry

Oman Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

Oman belongs to medium-risk countries from an investment point of view, rating agencies assign grades S&P B+ stable (10/2020), Fitch BB- negative (8/2020), Moody’s Ba3 negative (6/2020), OECD investment risk level is 6, EGAP given by D. Check smber for agriculture and fishing facts of Oman.

Businesses that have successfully entered the Omani market usually have previous experience in the Arabian Peninsula or a full-time representative or office in the country. Foreign companies wishing to distribute their products in Oman often prefer to use a local agent. Local sales representatives are particularly useful when selling to the Omani government, given their contacts, language and cultural knowledge. If Czech companies do not want to act through a local representative on the local market, they must register with the Ministry of Trade and Industry online through the Invest Easy system (https://www.business.gov.om/ieasy/wp/en/). As in other GCC countries, regular personal contact is the key to success in business relationships.

A number of transport, logistics and retail companies operate in Oman. Most of the goods destined for the Omani market enter through the port of Sohar, located two hours from Muscat. Other ports are Salalah, about 1,000 km from Muscat (the only port between Europe and Singapore that can accommodate S-class container vessels), or the emerging port of Duqm. Goods can also arrive in Oman by land from the UAE. Oman’s well-developed road infrastructure connects almost all the settlements in the country. Oman has airports in Muscat, Salalah, Duqm, Khasab and Sohar. Customs duty is payable upon entry of goods (does not apply to GCC and US goods) which should not exceed 10% plus VAT. 5%

Companies wishing to import goods into Oman must register with the Ministry of Trade and Industry through the Bayan system. System description here. Login here. The Bayan digital platform connects all customs partners, including government agencies, shipping and customs companies, commercial banks, and port and airport operators, into one system – the so-called online one-stop-shop. Companies must obtain a special license to import certain types of goods, such as alcohol, livestock, poultry, firearms, narcotics and explosives. The import of media content is subject to censorship by the Ministry of Heritage and Culture for morally or politically sensitive content. The Ministry of Information delays or blocks content it deems morally suspect or politically sensitive. Oman places great emphasis on standards, conformity assessment and quality to facilitate trade, economic and industrial development. As part of the GCC Customs Union, Oman is working to align its standards and conformity assessment systems with those of the GCC through the Gulf Standard Organization (GSO). Most Omani standards are either GSO standards or those derived from another international standards organization. The government is also seeking to harmonize standards with international conformity assessment standards within the specifications of the WTO Principles on Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Measures (SPS).

The Customs Office of the ROP requires the following for the clearance of imported goods:

  • business registration and import permit
  • certificate of association with Oman Chamber of Commerce and Industry (OCCI)
  • manufacturer’s certificate
  • the so-called “quotation list” (price of goods by the supplier)
  • packing list
  • bill of lading or bill of lading – only for sea and air transport
  • manifest of shipment – ​​a document that contains a detailed description of the cargo
  • permission of delivery from the shipping agent
  • comprehensive valid written authorization from the person responsible for customs clearance
  • import declaration
  • proof of payment of taxes and duties on the total value of the shipment, including cargo and CIF insurance

If an invoice or a valid certificate from the manufacturer is missing, customs clearance will cost OMR 20 (approx. CZK 1,200) paid in cash. ROP Customs will refund this fee if the required documents are submitted within 90 days from the date of payment. In the case of the import of goods for which the import is restricted (alcohol, pork, weapons, etc.), then it is necessary to attach the consent of the competent authority.

Forms and conditions of operation on the market

Probably the least demanding form of operating in the Omani market is the sale of goods through a local sales representative. In this way, a Czech company can avoid the administration associated with local registrations, customs clearance, taxation and save the time it would have to devote to familiarizing itself with local rules, regulations and customs. But even local representation has some peculiarities. For example, the manufacturer or supplier may not unilaterally terminate the agency agreement, except in cases of unjustified breach of the agreement by the local agent. Commercial agents must register agreements with the Oman Chamber of Commerce and Industry (OCCI) and (in Arabic) with the Ministry of Commerce and Industry (MOCI) Registry of Commercial Agents and Companies, where registration is renewed every 3 years. Representation need not be exclusive and multiple sales representatives may be employed to promote the same product or services. We recommend that you meet the potential representative in person before concluding the contract and secure the legal services of a reputable company.

The second way is to establish a local branch. The Ministry of Trade and Industry (MOCI) operates the Invest Easy portal, which in the form of a One Stop Shop provides e-services required for the establishment and management of a company in Oman. This page also contains instructional videos on how to use the online portal. The government’s investment promotion agency ITHRAA can also serve as a source of quality information. Those Czech companies that would be ready to locate part of their production in Oman will probably get the best conditions through incentives and concessions in economic zones. In such a case, the Czech company will enter into negotiations with the Office for Economic Zones OPAZ or the Agency for Industrial Investments MAYDAN. In addition to ten-year tax holidays, exemptions from mandatory Omanization (mandatory percentage of employment of local citizens), the company can own 100%,

Marketing and communication

A number of advertising companies can be found in Oman such as OmanAD, Dentsu M21, Lane Twelve, Majan Business Solutions and many more. There are three English language newspapers in which companies can advertise: Oman Observer, Muscat Daily and Times of Oman or Arabic dailies: Oman Daily, Al-Watan, Al-Shabiba and Al-Royal. Most newspapers have websites for corporate advertising. Weekly newspapers in Arabic include Al Isbou’a, Al Youm A’Saba and Futoon. Two independent business monthlies Business Today and Oman Economic Review. There are also three English-language weeklies aimed at the youth: The Week, Hi and Y. Advertising is also possible on Omani TV and radio and along the roads. Many businesses also distribute flyers in residential areas.

Government authorities prohibit advertising harmful to state security, public order, or offensive to social values ​​or customs. Certain restrictions on advertising content also apply: the main language of advertising is Literary Arabic; the English language can also be used if it is next to the Arabic language. The translation from Arabic to English must be linguistically correct, the advertisement must not be an obstacle to pedestrians or traffic, must not hinder emergency services, or cause damage. Advertising requires the written consent of the landowner. Advertising is prohibited in and around mosques, in the premises of Omani authorities and public parks.

Issues of intellectual property protection

Several general principles are important for the effective management of intellectual property (IP) rights in Oman. First, it is important to have an overall IP protection strategy. Second, it should be borne in mind that intellectual property may be protected and enforced differently in Oman than in Europe. Third, most rights must be registered and enforced in Oman under local laws. This means that, for example, European trademarks and patents are not enforceable in Oman. There is no such thing as “international copyright”. Protection against unauthorized use in a specific country depends on the national laws of that country. However, Oman offers copyright protection in accordance with international agreements. The registration of patents and trademarks is generally based on the principle of “first come…”. Before introducing products or services to the Omani market, companies should consider how to get a local patent and trademark. Intellectual property is primarily a private right and the Czech Republic cannot enforce the right on behalf of private persons in Oman. Rights holders are responsible for registering, protecting and enforcing their rights. You can use the services of local lawyers or consultants who are experts in Omani law. A good partner is an important ally in protecting intellectual property rights. Companies should also carefully consider whether to allow a partner to register intellectual property rights under their name. It can then easily happen that the partner will be the owner of your rights and will not transfer them to you in the event of termination of cooperation. You can use the services of local lawyers or consultants who are experts in Omani law. A good partner is an important ally in protecting intellectual property rights. Companies should also carefully consider whether to allow a partner to register intellectual property rights under their name. It can then easily happen that the partner will be the owner of your rights and will not transfer them to you in the event of termination of cooperation. You can use the services of local lawyers or consultants who are experts in Omani law. A good partner is an important ally in protecting intellectual property rights. Companies should also carefully consider whether to allow a partner to register intellectual property rights under their name. It can then easily happen that the partner will be the owner of your rights and will not transfer them to you in the event of termination of cooperation.

Public procurement market

Oman is the country with the largest public sector share of the economy among the GCC countries. This also corresponds to the number of public contracts and their great importance for Czech companies. Most public tenders are published through a single website (register in English) https://etendering.tenderboard.gov.om/, it is the largest, if not complete, compilation of open government tenders and is regularly updated. There are a number of other companies or institutions in Oman that run their own tenders, such as Petroleum Development Oman, the Royal Oman Police (ROP), the Diwan of the Royal Court, the Oman Telecommunications Company (OmanTel) or the Ministry of Defence.

Most projects and purchases for the government are made through an independent selection board made up of senior government officials and employees – around 40 professional technocrats. When awarding contracts, the tender committee usually relies on the recommendations of the consultant and the contracting authority. Once the bids are submitted, companies complain of lack of transparency and lengthyness. Tender notices are published in local newspapers, both in English and Arabic, and in the Government Official Gazette. The Public Procurement Act and its accompanying regulations provide for appeal procedures.

The following can generally be said about public tenders:

  • A deposit in the form of a bank guarantee in the amount of 1-3% of the value of the offer is required to submit bids.
  • Contracts are often, but not necessarily, awarded to the lowest bidder.
  • Bidders must normally reside in Oman or have a nominated local representative on offer.

If an international tender is announced (typical for large infrastructure projects), international companies and institutions not registered in the Sultanate may participate if they register within a maximum of 30 working days from the date the international company is informed of the contract award.

Many international companies enter into a representation agreement with local companies for tender purposes. This contract is registered with MOCI and the sales representative participates in the bidding process on behalf of the foreign company. Bidders may be present at the opening of bids or may follow the process broadcast live on the tender website. Contract award notices are published online. Successful bidders are required to provide a guarantee for the execution of the contract (five percent of the value of the contract). Successful international bidders are generally required to register with MOCI’s Business Registration Department and become members of the Oman Chamber of Commerce and Industry (OCCI) within 30 days of awarding the contract. As part of the tender process in Oman, suppliers often have to deposit a deposit (so-called bid bond) with a third party, that, as the successful tenderer, they will perform their contract in accordance with the terms of the tender. The deposit is subject to full or partial forfeiture if the successful bidder fails to perform the contract as required. Advances usually range in value from one to three percent of the contract bid price. A tenderer who wants to withdraw his participation from the tender after opening the tender will lose his deposit. Unsuccessful applicants have their deposit refunded. Failure to submit a deposit with the bid may be grounds for disqualification of the bid. The winning bidder must replace the so-called bid bond with a performance bond, which represents five percent of the contract price, within 10 days or, in the case of foreign bidders, within 20 days of notification of acceptance of the bid. Failure to provide a performance guarantee within the specified number of days may result in

Currently, the so-called public-private partnership (PPP) seems to be the only preferred form of projects. In practice, this means that the applicant realizes the project from its own resources and, after its completion, also runs it for a long time (examples of such projects are, for example, hospitals).

Payment terms, payment ethics and resolution of commercial disputes

We recommend selling goods against payment, using a documentary letter of credit, or insuring yourself against payment failure. Due to the different legal system in the country (Islamic law) and the cost of court and arbitration processes, it is recommended to settle disputes by agreement of the parties. According to the DB 2020 index, the average length of time to resolve a commercial dispute in Oman is 598 days. Commercial disputes are heard by the three-instance Commercial Court. Recognition of foreign decisions is possible only in the case of a reciprocal agreement that Oman has signed with the GCC countries. The Commercial Court resolves the dispute according to the so-called Commercial Law (Royal Decree 55/90). The Commercial Court is competent to resolve disputes even in the case of state contracts, i.e. disputes between a foreign contractor and a state institution. Commercial disputes can be settled by arbitration, see Oman Arbitration Law (Royal Decree 47/97). The parties can choose any law and foreign arbitration, but this is conditioned by the fact that both parties to the dispute have their headquarters in different countries. Regarding arbitration outside the GCC country, the enforceability of such an award is problematic, despite Oman being a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Oman signed the convention with the proviso that the seat of the arbitration must be in the country of the other party to the dispute (ie the Czech Republic, for example) and that the judgment must not conflict with “public order”. Oman is a member of the so-called International Center for the Settlement of Investment Disputes, which resolves disputes between an investor and the state or between states (but no longer disputes between private entities). the enforceability of such a judgment is problematic, even though Oman is a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Oman signed the convention with the proviso that the seat of the arbitration must be in the country of the other party to the dispute (ie the Czech Republic, for example) and that the judgment must not conflict with “public order”. Oman is a member of the so-called International Center for the Settlement of Investment Disputes, which resolves disputes between an investor and the state or between states (but no longer disputes between private entities). the enforceability of such a judgment is problematic, even though Oman is a member of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention). Oman signed the convention with the proviso that the seat of the arbitration must be in the country of the other party to the dispute (ie the Czech Republic, for example) and that the judgment must not conflict with “public order”. Oman is a member of the so-called International Center for the Settlement of Investment Disputes, which resolves disputes between an investor and the state or between states (but no longer disputes between private entities).

Visas, fees, specific conditions for traveling to the territory

Visas are issued at the Embassy of Oman in Vienna or upon entry into the country at Omani border crossings. The price varies according to the specific type and can roughly range from EUR 45 for a ten-day single entry to EUR 155 for an annual multi-entry. A fee of EUR 17.5 for express delivery, etc. may also be added to the price. It is possible to apply for a visa via the online application on the website https://evisa.rop.gov.om/. Tourists coming to Oman from the Czech Republic on a group tour organized by an Omani hotel or an Omani travel agency do not need a visa – they are guaranteed visa-free entry to Oman for 10 days. However, we believe that due to the pandemic restrictions and quarantine measures, this mode of entry to Oman is unusable for traders (tourists do not leave the hotel complex and remain in quarantine with a tracking bracelet during their stay).

A one-time visa can be used for a period of 6 months for a stay not exceeding one month from the time of entry into Omani territory. This visa can be extended by one month at the Directorate General for Passports and Residence (Directorate General for Passports and Residence) or its branch (usually in administrative cities of provinces or regions). A multiple entry visa can be obtained in a similar way, it is usually valid for a period of 3 months (maximum for a period of one year) from the date of issue and a single stay may not exceed 30 days from the entry into the country. However, the 30-day (or other specified in the visa) period also applies to a longer multiple-entry visa, whereby multiple entries must be made from the first date of entry to Oman within those 30 days. The visa is not extendable. When applying for a work stay, an invitation from the sponsor (Omani employer), a letter from the sending organization from the Czech Republic, a health report, 2 passport photos and payment of an administrative fee are also required. For the specific conditions of travel to the territory, they are regularly updated on the website of the Ministry of Foreign Affairs of the Czech Republic.

The risk of infectious diseases is low. For longer stays, vaccination against hepatitis A and B, typhoid and meningitis is recommended. Additional information, e.g. www.travmed.com, www.who.int and others. Malaria is limited in the area. Malaria is occasionally reported in the southwestern regions of Oman. It is essential to consume bottled drinking water, water from the public network or from local (usually mountain) springs cannot be recommended for European travelers, but for the purposes of basic hygiene it is usually without problems. Care must be taken when importing and using drones. A license must be obtained, the conditions can be studied in more detail on the website of the Public Authority of Civil Aviation. It is quite easy to rent a car in Oman if you have an international driver’s license or a driver’s license from GCC countries. In many cases, renting a car can be more convenient than taking a taxi. Rates usually range from 15 OMR (approx. 900 CZK) for a small car (e.g. Toyota Yaris), including 200 free km per day. The main road network is of very high quality. It is better to rent an all-terrain vehicle in mountainous areas or the desert, many roads are not passable with a normal car.

Employment of citizens from the Czech Republic

Employing foreigners alongside local forces is quite common. However, the employer must have permission from the Ministry of Labor to employ foreigners (meet the minimum mandatory quotas for employing Omani citizens, so-called Omanization). Such an employer will provide employees with (1) a work visa to enter Oman, (2) a resident card to stay in the country, and (3) a residence permit. In Oman, all these documents apply to employees between the ages of 21 and 60 who have received a job offer from an Omani company. The employer thus becomes a guarantor (in English it is referred to as a “sponsor”). This system is similar in all GCC countries. Details on the conditions of employment of local forces and foreigners can be found on the website of the Ministry of Labour, where the Labor Code is also available in English.

The application for an employment license (for a maximum of 2 years) is accompanied by:

  1. organizational plan reflecting Omanization requirements
  2. list of foreign employees, designation of their positions and gender
  3. copies of passports of foreign employees
  4. attested copies of their qualification certificates
  5. education documents
  6. certificate from the Ministry of Foreign Affairs of the home country
  7. certificate from the Embassy of Oman (in Vienna)

In order to apply for a work visa, in the case of some positions, further approval by the institutions is required, in the case of some countries, a health certificate is required. As soon as the employee arrives in Oman, it is the employer’s duty to provide him with a residence card from the Royal Oman Police (after handing over fingerprints, blood tests and other formalities, the police will issue approval. The minimum wage is 325 OMR / month (approx. CZK 20,000). There is no wage tax, the employer 9.5% social insurance is paid, employee 6.5%.All formalities regarding employment and obtaining permits can also be handled by an intermediary, e.g. https://shieldgeo.com/oman-immigration-and-work-permits/.

Local health care is at a high level, especially in larger cities. State hospitals are equipped with modern technology. Care for non-resident foreigners is paid care and the costs must be reimbursed by your health insurance company, since 2019 employees must have health insurance provided by their employer. In general, there are no agreements on cooperation between the health insurance companies of the Czech Republic and OM. For a short-term stay in Oman, it is advisable to take out health insurance for abroad.

Fairs and events

Fairs and exhibitions are mostly local in nature (the main regional ones take place in the nearby United Arab Emirates or Saudi Arabia), the advantage being that they are usually accompanied by a relevant industry conference. The most important exhibition center is the Oman Convention & Exhibition Center in the capital Muscat, on whose website (https://ocec.om/) you can find an overview of planned events. Individual conferences without relevant exhibitions are also held there.

Although fairs are planned in Oman, they are practically not held during the pandemic, the times of the events are changed and postponed. It is therefore necessary to check each fair repeatedly with its organizers. For clarification, we present some of the announced fairs:

  • May 30-31, 2021 INTERNATIONAL CONFERENCE ON ARTIFICIAL INTELLIGENCE – COMEX AI: artificial intelligence
  • May 30 – June 1, 2021 30TH COMEX – TECHNOLOGY SHOW 2021 – technology fair
  • June 15-17, 2021 LIGHT OMAN 2021 – lighting technology fair
  • 115 – June 17, 2021 TSS OMAN 2021 – facing material
  • 15-17 June 2021 IDF OMAN 2021 – Design Fair
  • 13 – 15 September 2021 OMAN PETROLEUM & ENERGY SHOW 2021 – energy and petroleum industry
  • 4 – 6 October 2021 THE FOOD & HOSPITALITY OMAN – food, hospitality and tourism fair
  • October 4-6, 2021 OMAN HEALTH EXHIBITION & CONFERENCE – healthcare
  • 24 – 26 October 2021 EDUTRAC OMAN – Higher Education Fair
  • October 25-27, 2021 PROJECT OMAN – international exhibition of construction technologies, infrastructure and building materials
  • 14 – 16 December 2021 OMAN AGROFOOD – Agriculture and Food Fair
  • 13-17 March 2022 OMAN SUSTAINABILITY WEEK – Oman Sustainability Week is a national platform that aims to highlight Oman’s commitment to sustainability leadership through innovative strategies in line with the UN Sustainable Development Goals (SDGs) and engage national development stakeholders
  • 14 – 16 March 2022 OMAN DESIGN & BUILD WEEK – Oman Design & Build Week is a platform to promote architects, consultants, technicians, suppliers, distributors and procurement managers from across Oman

Oman Market Entry