Royal Decree 123/2010 Establishing the Sohar Free Zone

A free zone named “Sohar Free Zone” is hereby established in the Wilayat of Sohar on the area of land shown in the attached diagram and located within the geographical boundaries of the Sohar Industrial Port, as delineated in the aforementioned concession and usufruct agreements of Sohar Industrial Port, in accordance with the rules, procedures, and systems provided in them.

Article II

Sohar Free Zone LLC shall be the operator of Sohar Free Zone.

Article III

The provisions of the attached law shall apply in regard to Sohar Free Zone.

Article IV

This decree shall be published in the Official Gazette, and comes into force on the day following the date of its publication.

Issued on: 14 Muharram 1432
Corresponding to: 20 December 2010

Qaboos bin Said
Sultan of Oman

Published in Official Gazette 926 issued on 1 January 2011.

The Law of the Sohar Free Zone

Article 1

In the application of the provisions of this law, the following words and phrases have the meaning assigned to each of them, unless the context requires otherwise:

1. Law: The Law of Free Zones promulgated by Royal Decree 56/2002.

2. Free zone: The Sohar Free Zone.

3. Committee: The Free Zones Committee.

4. Concession agreement: The agreement under which the government grants the operator the right to manage and operate the Sohar Free Zone.

5. Customs territory: Any area within the boundaries of the Sultanate, with the exception of free zones.

6. Taxes: All types of taxes that were or are imposed by law.

7. Operator: Sohar Free Zone LLC.

8. Working company: Any company; enterprise; commercial, financial, transactional, or service establishment and its branches; or commercial representative office, whether Omani or foreign, licensed to practise the permitted activities within the free zone.

9. One-stop-shop system: A system through which all licences, permits, approvals, and visas are issued; procedures for registering the working company are completed; and all rules and systems relating to both the operator and the working company are applied, in accordance with the law.

Article 2

The operator shall be responsible for the management, development, and operation of the free zone, and it shall in particular:

1. Propose plans and programmes for the development and growth of the free zone.

2. Propose draft regulations, rules, and controls for the land planning and use in the free zone.

3. Issue licences for companies desiring to work in the free zone after the approval of the relevant bodies through the one-stop-shop system.

4. Determine the fees for the services performed by the operator to the working company after the approval of the committee.

Article 3

The operator and the working company shall be granted the incentives, benefits, and facilities stipulated in this law and the aforementioned Free Zones Law.

Article 4

The property and the activities of the operator and the working company shall not be subject to any nationalisation procedures or those restricting private property, except by virtue of a law and in exchange for fair compensation.

Article 5

The working company shall exclusively determine the prices of its products and services.

Article 6

The working company and those working in it shall be subject to the regulations and rules prescribed for the free zone.

Article 7

The operator is exempt from taxes for a period of ten years.

Article 8

The working company is exempt from taxes for a period of ten years. It is permitted to extend the exemption for multiple periods each of which is five years as long as it does not exceed twenty-five years in accordance with the procedures specified in the concession agreement. In all cases, to benefit from the exemption, it is required to achieve the Omanisation percentage in accordance with the rules prescribed in the concession agreement, provided it is not less than 15%.

Article 9

In exception to article 3 of the law, the operator and the working company shall submit an annual tax declaration to the Secretariat General of Taxation.

Article 10

In exception to articles 2 and 10 of the law, the operator may establish working companies with other parties, and assign the right to develop or operate any part of the free zone to them after notifying the committee, and that is without prejudice to the responsibility of the operator before the committee.

Article 11

The operator may divide the free zone into plots of land and assign the usufruct right and other rights associated with it to the working companies specified in article 10 of this law.

Article 12

The operator and the working company shall enjoy freely transferring their profits and investments.

Article 13

All operations carried out by financial institutions working in the free zone are subject to the provisions of the aforementioned Law of Combating Money Laundering and Terrorism Financing and all the provisions of laws relating to banks and financial institutions in the Sultanate.

Article 14

It is permitted for the operator and the working company to have a temporary headquarters inside the customs territory of the Sultanate in accordance with what the committee prescribes.

Article 15

The operator and the working company may open commercial representation offices in the customs territory of the Sultanate, provided they are registered in accordance with the aforementioned Law of the Commercial Register.