International Trade in Oman

News Related to International Trade in Oman

Business outline for Oman

Economic Overview

Since 2004, the Sultanate showed extraordinarily strong growth, mainly due to the exploitation of its oil reserves. Recorded at 6.1% in 2010 and estimated at 4.5% in 2011, the country's growth is strongly correlated to the change in oil prices, which explains its volatility durting the last few years.

Oil is the main source of revenue for Oman, accounting for more than 76% of its export revenues. However, oil resources are not without limit and the Sultanate even has the lowest reserves in the region, which are estimated to last for only another 45 years. The State is therefore in the process of liberalizing and diversifying its economy, in order to reduce its excessive dependence on the oil sector. The "2020 Vision Plan" aims to build on key investment in the tourism serveices, financial and port activities. The stat is also trying to reduce its stake in a number of companies, promoting privatisations and opening the economy to foreign capital, at least to some extent. The manufacturing sector currently represents 55% of the GDP. The services sector is booming , namely in the fields of distribution, transport and communication. 

The Sultanate enjoys a relatively healthy financial situation. Its foreign debt is relatively low, compared to its glod and foreign currency reserves (8.5 billion EUR). Inflation is also being monitored attentively by the monetary authorities, having decreased from 12.6% in 2008 to 4.4% in 2010. The Omanian banks have been relatively little affected by the international financial crisis. The country's main challenges for the coming years are its unemployment, which oscillates between 10% and 15% of the workforce and demographic trends: almost 40% of the population is less than 15 years of age. The Sultanate is planning to create 275 000 new jobs in 2011.

FDI in Figures

FDI inflow into the country is slow. FDI stocks were relatively weak 2010 and the growth outlook for the coming years is modest.

The Sultanate of Oman offers tax incentives and customs duty exemptions to foreign investors, is very politically and macro-economically stable, and is strategically located in a dynamic region. However, access to a limited number of sectors, and the pressure exerted by the government on foreign companies to recruit a native workforce are some of the hindrances to foreign investments.

The oil sector attracts most of the foreign investments. The main investor countries are the United States, the United Arab Emirates, Japan and China.

Foreign Trade Overview

Oman's economy is very open, with an accessibility rate which varies between 80% and 100%. The government wants to ratify free-trade agreements with the EU, China and Japan, along the same lines as those signed with the USA in September 2006.

Customs duties are relatively low and there are not many trade barriers in the country. Barring a few exceptions, goods produced in other Gulf Cooperation Council (GCC) member countries enter duty free, if accompanied by certificates of origin. However, import of alcoholic beverages, tobacco and pork products attract 100% duties.

The country has some incentives for the development of trade, in particular low taxes and quality port facilities. However, slow procedures, a highly rigid labor law and a high level of corruption hinder trade.

Oman exports more than it imports, which translated in a trade balance surplus in 2009, which remained unchanged in 2010, despite the crisis. It is estimated that the Sultanate's trade balance will remain positive over the next years.

Its main trade partners are the Gulf Cooperation Council member countries, China and Japan.