Cumbersome government regulations present challenges for foreign firms to succeed in Oman. Bureaucratic obstacles include obtaining Ministry of Labor clearances for visas and permits for foreign workers. The Ministry does not grant work visas to expatriate women in most business sectors. U.S. firms have reported lengthy business registration requirements for specialized consultancies. The divide between the government and private sector is not well defined in Oman, leading some firms to complain of unfair competition. Of particular concern for many international firms in Oman is the “Omanization” process, whereby the government sets quotas for Omani national employment on a sectoral basis. Many companies, both Omani and international, have noted that some of the quotas are difficult to satisfy and are applied inconsistently. The Ministry of Labor and other authorities strongly encourage companies to meet their Omanization quotas, turn over management jobs to Omanis, and create training programs for new hires, which can be costly. Although the FTA provides for limited exceptions for specialized upper management, U.S. companies are responsible for complying with most Omanization requirements. Obtaining labor clearances for new foreign workers and terminating Omani employees also present challenges for foreign (and local) companies.

Other issues of concern to U.S. companies and investors:

• The effect of the government’s fiscal restraint and focus on paying down public debt on government-funded projects
• Local manufacturing and sourcing requirements
• Government mandates to allocate its projects to local Omani companies could exclude foreign companies from some tenders
• Omani customs officials occasionally charge duties on U.S. goods transshipped by road via Dubai despite FTA duty exemptions
• Lack of transparency in government tendering processes
• Slow company registration processes, especially for consulting firms
• Price sensitivity in contract negotiations
• Expansion of Oman’s tax regime and increases in government service fees
• Prohibitions on foreign (including U.S.) ownership of land
• Limited business opportunities outside the oil and gas industry