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German Legal Expertise in the Middle East since 1981

Sleeping Beauty Awakening? M&P’s Oman Activities

Heinrich Köllisch

Author: Heinrich Köllisch
Lawyer.

Guiding Principle
If it comes to thinking about establishing a presence in the Gulf region generally, the usual suspects come to mind and most of the time Dubai is leading the way. However, how about alternatives? Especially considering the recent developments in the area! Let us have a closer look where else might be a good option:

The Arabian Peninsula is at the heart of multiple local and global dynamics.

It is located between Europe, Asia and Africa with access to the Indian Ocean and the Mediterranean Sea via the Suez Canal. Trade links for goods, raw materials make use of the various logistics hubs, and the area is home to several major global airline networks. This makes the Arabian Peninsula an important strategic link between (re-)sources, producers and customers.

Political evolution in this region can be dynamic and at times surprising. Economic players operating in the area need to discover more and more one core skill to be able to use the obvious local advantages to their benefits: Flexibility.

This requires to monitor developments in several subjects vital to the individual business as well as to be able to react to changes and developments at short hand. Planning and preparation for parallel and alternative options becomes increasingly essential. A one-track approach, be it conceptually, be it geographically, becomes increasingly unfit to anticipate potential and actual changes.

Since its foundation in 1983 Meyer-Reumann & Partners (M&P) is committed to approaching the Middle East and in particular the Arabian Peninsula as a region in its entirety. Thus, the law firm has carefully paid attention to be present continuously throughout the region with its own offices and licenses on the ground.

Amongst these countries has been Oman, where M&P is licensed as a legal consultancy since 2001.

To many in the region and beyond Oman is known for its natural beauties, friendly and hospitable people as well as its long culture and history. So far, it has only reluctantly been seen as a potential place of business in the region. However, might recent and coming dynamics lead to an awakening of this sleeping beauty?

When talking about legal perspectives in Oman, issues like lengthy administrative procedures, infringed knowledge of English, taxes and a certain level of fees as well as a nationalization quota in labor law have consistently been mentioned amongst potential investors in the country.

Despite these apparent shortcomings, Oman indeed offers a number of legal advantages, that become ever more attractive for investors thinking in a long term perspective in the Middle Eastern and Gulf region.

Oman’s core advantage is that it is party to a number of international conventions like the Hague Convention on Apostilles. This might reduce lengthy and costly legalization and hence speed up many commercial transactions like incorporations of legal entities. Furthermore, the country has a more liberal approach in interpreting its Bilateral Investment Treaties (BITs) opening larger spaces for investors Then other countries in the region. In addition, it has Free Trade Agreements with the USA, allowing US based legal subjects a number of rights and freedoms in the same amount as Omanis.

Oman has a number of Free Zones and in general a more liberal structure with regard to foreign ownership in its corporate law. It also enjoys one of the most liberal agency regimes for commercial agencies in the region.

Due to its long time experience with taxation, Oman has already established functioning tax authorities with a considerable experience in taxation. Thus, the introduction of VAT should be a smaller challenge for Oman than for other countries in the region.

All in all Oman can be a place for those interested in long-term investments and a very thought through legal framework, which however might have its price.

Given all these aspects, Meyer-Reumann & Partners would like to shed some more light on legal developments in the Sultanate of Oman in lex arabiae. To start with, we have also chosen Oman Adopting the Eleventh Edition of the Nice Classification in this issue.

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