Last week, a new Law of Special Economic Zones and Free Zones was issued replacing the 20+ years old Law of Free Zones. The new law covers traditional free zones, such as Sohar Free Zones, as well as the more comprehensive special economic zones, such as the Special Economic Zone at Duqm.
A strange thing about this new Law of Special Economic Zones is that it does not define the terms “Special Economic Zone” and “Free Zone”. However, the key differences between them appear to be that a special economic zone is a more comprehensive project that may or may not include a free zone within it; that a special economic zone is directly managed by OPAZ, while a free zone is required to have a third-party operator; and that special economic zones can include real estate development projects where property may be sold to Omani and non-Omani persons, while standard free zones can’t.
The provisions regarding real estate development projects in special economic zones are a new addition not previously found in the System of the Special Economic Zone in Duqm. Outside this key change, the law appears to mostly attempt to consolidate the provisions that were uniquely provided through the System of the Special Economic Zone at Duqm into general provisions that can apply to any special economic zone to be created in the future.
It is worth noting that the provisions of the law remain conservative and the status they grant special economic zones is not comparable to the status of special free zones in neighbouring countries such as DIFC, ADGM, or QFC, that operate in a manner independent of the national legal system of the state and have their own regulators, substantive laws, and court system. In Oman, special economic zones created under the new Law of Special Economic Zones and Free Zones remain basic free zones that offer time-limited tax reliefs along with streamlined processes for obtaining government approvals.
The new Law of Special Economic Zones and Free Zones entered into force yesterday. You can read it in full in English on the link below: