As part of the legislative overhaul in August this year, Royal Decree No. 105/2020 (the RD) introduces changes that impact the Special Economic Zones and Free Zones in Oman. The RD establishes a new "Public Authority for Special Economic Zones and Free Zones" (OPAZ). The RD came into effect on 18 August 2020.

The RD abolishes entirely the Special Economic Zone Authority at Duqm (SEZAD). All rights, obligations and assets originally vested in SEZAD will now be transferred to OPAZ. Employees of SEZAD will also be transferred to OPAZ. OPAZ will report to the Council of Ministers and will be chaired by the previous Minister of Commerce and Industry. Its head office will be located in Muscat.

OPAZ's ambit includes undertaking all responsibilities of the Free Zones Committee set out in the Free Zones Law (RD No. 56/2002), including those government responsibilities in the Royal Decrees establishing Free Zones in Al Mazyunah (RD No. 103/2005), Salalah (RD No. 62/2006) and Sohar (RD No. 123/2010).

Importantly for investors, the benefits, incentives and exemptions available at the Special Economic Zone at Duqm (SEZD) and the various Free Zones will continue in force until further Royal Decrees are issued.  This means that companies registered in SEZD and the Free Zones in Oman will for the time being continue to benefit from the various incentives available, including 100% foreign ownership (which is perhaps less of an incentive now in light of the new Foreign Capital Investment Law), low minimum capital requirements and tax exemptions.

Pursuant to the RD, the following references in existing Oman legislation are replaced: