Oman`s legal system is coded but incorporates elements from a variety of legal traditions, including modern English law and French law, as well as Islamic law in the Ibadhi interpretation. With the introduction of the U.S.-Oman Free Trade Agreement in 2009, U.S. companies can fully establish and own a business in Oman without a local partner. While U.S. investors enjoy national treatment in most sectors, Oman enjoys an exemption in the Free Trade Agreement for Legal Services that limits U.S. ownership of a legal services firm to a maximum of 70 percent. Since 1 January 2021, foreign lawyers are no longer allowed to represent cases before Omani courts at any level. The government also has a “negative list” that restricts foreign investment to protect national security interests. The list includes certain services related to radio and television, air transport and inland waterway transport. The Ministry of Trade, Industry and Investment Promotion (MOCIIP) – known as the Ministry of Trade and Industry (MOCI) until August 2020 – issued Ministerial Decision 209/2020 on 8 December 2020, updating the list of activities in which foreign investors are not allowed to participate from 37 in 2019 to 70. The Ministry is implementing the new law on a case-by-case basis, and it is still unclear whether a company with 100% foreign capital can now carry out an activity that is not on the negative list.

Under the new CFLI, foreigners who want to own 100% of the shares of local companies no longer need to obtain MOCIIP approval. The legal system of the Sultanate of Oman was established by Royal Decree No. 101/1996 of 6. It was codified in a constitution in November 1996 and is known as the Basic Law of the State. The Basic Law consists of 81 articles that define the legal and political framework within which the State operates. It defines the tasks and responsibilities of the State and establishes the political, economic and social principles that guide its policies. The Basic Law also guarantees fundamental rights and freedoms, protects property rights and preserves the independence of the judiciary. The Constitution was amended on 20 October 2011 by Royal Decree No. 99/2011 to update the succession process and expand the role and tasks of the Council in Oman. The Omani legal system consists of a mixture of a civil code and Islamic law.

The religion of the State is Islam and the Islamic Sharia is the basis of legislation (Article 2 of the Constitution). There are two types of legislation in Oman: primary law in the form of royal decrees and secondary law in the form of ministerial decisions. Omani Sultan Haitham bin Tarik al Said, who took over the sultanate in January 2020, has led a series of government efforts to reform Oman`s economy to attract foreign direct investment (FDI). These efforts were underpinned by a review of Oman`s business and investment framework, which included the 2019 updates to the Commercial Company Law, the Foreign Capital Investment Law, the Privatization Law, the Public-Private Partnership Law, and the Insolvency Law. Under Sultan Hitham`s leadership, Oman is currently developing other benefits for foreign investors, including a tax incentive and fee program, permits to invest in several new industries in the economy, expanded land use, better access to capital, and labor and employment incentives for skilled businesses. These reforms aim to improve the investment climate in Oman and are in line with Oman`s Vision 2040 development plan. The success of Oman`s reform efforts will depend on its ability to open key sectors to private sector competition and foreign investment, minimize bureaucracy, pay its arrears, align its desire for “Omanization” with the realities of training and restructuring its workforce. and to translate its promises of economic reform into increased FDI flows and job creation.

Transparency in international relations is protected by the Constitution, as no treaty or agreement may contain secret clauses that contradict declared conditions. While the Constitution places treaties at the top of the legal hierarchy, all laws and procedures developed in Oman must conform to the provisions of the Constitution (Article 79). Oman Chamber of Commerce and Industry Dr. Al Fadhil bin Abbas al-Hinai, CEO Phone: +968-2479- 9146 Fax: +968-2479-1713 E-mail: salehm@chamberoman.om Web: www.chamberoman.om Oman has a modern arbitration law based largely on the model of the United Nations Commission on International Trade Law (UNCITRAL). According to its Arbitration Act, an arbitration agreement must be in writing and can be made in one or more documents. The parties are free to choose any law relating to the arbitration agreement and, in the absence of an express law, the courts have jurisdiction to make the decision. In addition, there are specific dispute settlement mechanisms under the FTA that can help Omani and U.S. companies resolve disputes outside the Omani legal system.

As a member of the World Trade Organization (WTO), Oman is committed to keeping the WTO Committee on Technical Barriers to Trade informed. The Trade Facilitation Agreement between Oman and the WTO entered into force on 22 February 2017. The Omani government recognizes binding international arbitration of investment disputes with foreign investors, although the government has increasingly challenged decisions in favor of foreign companies in debt collection cases.