OMAN Law and Practice Contributed by: Said Al-Shahry, Thamer Al-Shahry, Jeremy Pooley, Maria Mariam Rabeaa Petrou, Mujtaba Ali Kazmi and Salim Al Harthi, Said Al Shahry & Partners
1. Legal System 1.1 Legal System and Judicial Order Oman is a civil law jurisdiction. Legislation is the pri - mary source of its laws, not judicial precedent. Royal Decrees form the bedrock of Oman’s legislative framework and are often supplemented by secondary/ delegated legislation in the form of Ministerial Deci - sions. Royal Decrees are identified in this chapter of the guide with the initialisation “RD”. Oman’s Civil Transactions Law RD 29/2013 (the “Civil Code”) regulates all matters not addressed by oth - er specific laws. Under the Civil Code, commercial arrangements between parties are governed by the contract between them unless the law imposes a con - trary requirement. The principles of Islamic jurispru - dence, the principles of sharia and customary practic - es may also be relevant when interpreting a contract (in that order of descending authority). The courts take a purposive approach to the construc - tion of contracts and will seek to identify the parties’ intention to a contract. Broadly speaking, a party exer - cising rights under a contract will be expected to act reasonably and in good faith. The Basic Law of the State RD 6/21 (the “Basic Law”) essentially serves as Oman’s constitution. Under the Basic Law, judicial power is independent and vested in the courts, which operate in accordance with the rule of law. The judiciary consists of the Primary Courts (the Courts of First Instance), the Appeal Courts and the Supreme Court (Oman’s highest court). In March 2025 RD 35/2025 was issued establishing the Court of Investment and Commerce (CIC), which came into force in October 2025. The CIC has exclusive jurisdic - tion to hear all commercial disputes apart from dis - putes pertaining to administrative, labour and rental issues. The CIC has hierarchy similar to other courts in Oman. On 12 January 2026, Oman established the Interna - tional Financial Centre of Oman (IFCO) through RD 8/2026. The IFCO will have its own legal framework.
The executive regulations under the RD 8/2026 are yet to be issued.
2. Restrictions on Foreign Investments 2.1 Approval of Foreign Investments General Principles Non-Omanis may only conduct business in Oman through a locally registered entity. In practice, this means that non-Omanis must either establish a pres - ence in Oman or conduct their business through a local commercial agent in order to invest in Oman. Establishing a presence in Oman Oman’s Foreign Capital Investment Law RD 50/2019 (FCIL) came into force and effect in January 2020, and its impact has been to relax Oman’s foreign ownership restrictions significantly. Oman’s Ministry of Commerce, Industry and Invest - ment Promotion (MOCIIP) has issued, pursuant to Ministerial Decision 209/2020, as amended, a list of activities subject to foreign ownership restrictions (the restricted activities list). The restricted activities list includes activities such as automotive repair, trans - lation/interpretation services and labour recruitment offices; it may be updated from time to time by a deci - sion of the Minister of the MOCIIP. Certain industry sectors do not appear on the restrict - ed activities list, despite historically requiring a higher level of local ownership. Oman’s engineering law, for instance, requires engineering consultancy offices to have a minimum of 35% local ownership. The MOCIIP is expected to continue to apply any such industry sector restrictions. Even prior to the introduction of the FCIL, foreign - ers establishing a presence in Oman’s “free zones” or “special economic zones” or under the US–Oman free trade agreement or certain reciprocal arrange - ments implemented within the GCC (Gulf Cooperation Council), were able to take advantage of less onerous foreign ownership restrictions. However, the restricted activities list also applies to non-Omanis establishing a presence under these routes.
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