Oman Free Zone Company Formation

Free zones are an eye-catching factor for investors looking to start a business in GCC countries. Under Royal Decree 38/2025, the Law of Special Economic Zones and Free Zones, a qualifying zone company is exempt from Omani income tax for ten years from the start of commercial operations, renewable for two further periods for activities of a special nature — up to 30 years in total — with 0% customs duty on goods imported into or exported from the zone, 100% foreign ownership and full repatriation of capital and profit. Banks, financial institutions, insurers, telecom providers, contracting companies and road or maritime transport operators are excluded from the tax exemption, and companies already licensed under a zone’s earlier terms keep those terms until they expire. Oman is the perfect spot to start a business for international investors, thanks to the availability of its free zones. If you plan to expand your business into Oman, the free zones are the place to start.

Oman’s free zones, its special economic zone, economic city and industrial estates all sit under the Public Authority for Special Economic Zones and Free Zones (OPAZ), created by Royal Decree 105/2020. They range from port-side industrial free zones to an airport logistics zone and a 2,000 sq km special economic zone, so choose the zone that matches your business, your route to market and the incentives your activity actually qualifies for.

At a glance

Oman free zones at a glance

7

Zones under OPAZ

100%

Ownership

10 years

No income tax; renewable for special-nature activities

5 years

Minimum lease term

The directory

Free zones and economic zones in Oman

Each zone has its own regulator, sector focus and published incentive terms; since April 2025 new licences fall under the Law of Special Economic Zones and Free Zones (Royal Decree 38/2025), while companies licensed earlier keep their zone’s original terms. Here are the seven zones overseen by OPAZ:

Salalah Free Zone

Created in 2006 (Royal Decree 62/2006) beside the Port of Salalah on the Arabian Sea, facing the Indian Ocean, East Africa and South Asia. Industry and logistics focus; the zone publishes 100% foreign ownership, no customs duty on imports and exports, no minimum capital and a 30-year profits-tax holiday.

Al Mazunah Free Zone

Oman’s first free zone, established on 24 November 1999 on 14.5 sq km in Dhofar at the Yemeni border and managed by Madayn. A gateway for trade with Yemen and East Africa: Yemeni workers may work in the zone without an entry visa, Omanisation is 20%, and the zone publishes a 30-year income-tax exemption and customs exemption.

Sohar Free Zone

Established in 2010 (Royal Decree 123/2010) on 45 sq km next to Sohar Port, on the shipping routes to the Gulf, India and East Africa. Export-oriented industry and logistics; the zone publishes 100% foreign ownership, 0% import and re-export duties, a corporate tax holiday of up to 25 years and relaxed Omanisation.

Duqm SEZ

Established in 2011 on 2,000 sq km on the Arabian Sea — the largest special economic zone in the Middle East and North Africa — spanning industry, tourism, trade, logistics and real estate. OPAZ publishes 100% foreign ownership, tax exemption of up to 30 years from commencement (renewable), usufruct land rights of up to 50 years and no minimum capital.

Muscat Airport Free Zone

Adjacent to Muscat International Airport with direct airport access and full integration into Asyad Group’s logistics network. OPAZ publishes 100% foreign ownership and a fast-track, one-stop setup — the natural choice for businesses that move goods by air.

Khazaen Economic City

An economic city in Barka, Al Batinah South, inside the Greater Muscat Structure Plan, with a defined application-to-licence timeline and on-site services. Its incentives are activity-specific — ask us which of your activities qualify.

Madayn Industrial Estates

Not free zones but ten industrial cities — Sur, Sohar, Raysut, Nizwa, Buraimi, Rusayl, Samail, Ibri, Al Mudhaibi and Mahas — plus Knowledge Oasis Muscat. Madayn publishes 100% foreign ownership, leases of up to 30 years, OMR 1 per sq m annual rent for the first five years, a five-year exemption from tax on net profit (15% thereafter) and customs waivers on production inputs.

Key advantages

Benefits of company formation in an Oman free zone

100% ownership

No minimum requirements for share capital

No income tax for ten years, renewable for special-nature activities

No duties imposed on export and import procedures

A lease term of at least five years

Trade starts in Oman without any local agents

The process

Steps to business setup in Oman’s free zone

The investor must follow these processes to incorporate a business in Oman’s free zone:

Application form

Submit the plot

Get agreement on commercial terms

No Objection Letter submitted to the Ministry of Environment and Climate Affairs

Clearing due diligence

Choose a plot and get its approval

Pay the licence fee, incorporation fee and lease

Collect the Certificate of Incorporation

Sign the lease agreement

Paperwork

Documents needed to set up in an Oman free zone

Investment

Fees for setting up a free zone company in Oman

Activities fee

Business registration fee

Logistics or commercial licence fee

Manufacturing or industrial licence fee

Visa fee

Ready to set up in Oman?

You can talk with business consultants who are well-versed in Oman’s legal regulations and business setup processes. This lets you incorporate an entity in a hassle-free way and at a faster pace.

Wider picture

Why free zones appeal to investors in the GCC

Exemption from all import and export duties
Freedom to recruit expatriates
Freehold offices available on sale or lease
Readymade offices, factories & warehouses
Free transfer of funds
No foreign exchange control