A new law decides to establish free zones at Muscat International Airport and Sohar and Salalah airports

The Sultanate of Oman has decided to establish new free zones by virtue of Royal Decree No. 10/2022 issued on March 2, 2022. The law stipulates in the first article the establishment of three free zones at the three airports, the first one called “the free zone at Muscat International Airport”, the second is “the free zone at Sohar Airport”, and the third is “the free zone at Salalah Airport”.

The operator of the free zones

The Council of Ministers shall determine the operator of the free zones from among the companies affiliated with the Oman Investment Authority, and these companies may seek the assistance of specialized companies, whether for the development, marketing, or administration of the free zones.

Incentives and facilities

The law grants the operator and the companies working in the new free zones the privileges and facilities stipulated in the Free Zones Law No. 56/2002.

Income tax exemption

The operator and operating companies will be exempted from income tax for a period of (15) years, and it is renewable for a period of (5) years for each separate project. Banks, financial institutions, insurance and reinsurance companies, communications service projects, land transport and contracting are excluded from this exemption.

The Head of the Tax Authority issues the mentioned exemptions subject to the rules, categories and procedures approved by the Board of Directors of the Public Authority for Special Economic Zones and Free Zones, after the approval of the Ministry of Finance.

Obligations of the operating companies

These companies shall pay for the services provided by the operator. The latter shall determine the amount of the service fee and the method of collecting it after obtaining the approval of the Board of Directors of the Public Authority for Special Economic Zones and Free Zones.

Obligations of the operator

Compliance to the rules of air easements and the requirements of civil aviation safety and security under the supervision of the Civil Aviation Authority. It must also coordinate with the Public Authority for Special Economic Zones and Free Zones to achieve the requirements for the safety of individuals, facilities, goods and the environment within the free zones.

Ali Al Rashdi

ali.alrashdi@sandalaw.om

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