Oman SEZ Rules Finalised: What Property Buyers Must Know

Oman's Special Economic Zones and Free Zones now have their full legal operating framework in place, after the Public Authority for Special Economic Zones and Free Zones (Opaz) issued the Executive Regulations of the Special Economic Zones and Free Zones Law. For anyone buying or considering property near or within one of these zones, this is the regulatory certainty the market has been waiting for.

What Are Oman's Special Economic Zones and Free Zones?

Oman currently operates several designated economic zones, each with its own sectoral focus and geographic footprint:

• Special Economic Zone at Duqm (SEZAD) — a deep-water port and industrial hub on the central coast, covering roughly 2,000 sq km.
• Sohar Free Zone — a logistics and manufacturing corridor adjacent to Sohar Port in the north.
• Salalah Free Zone — a multi-sector zone in the south, adjacent to the Port of Salalah.
• Al Mazunah Free Zone — a trade zone on the Yemeni border, focused on cross-border commerce.

Each zone offers a distinct set of incentives — 100% foreign ownership of businesses, customs exemptions, and simplified licensing — but until now, the precise rules governing how those incentives operate were spread across multiple ministerial decisions. The new Executive Regulations consolidate and clarify them under a single framework.

Why This Matters for Real Estate

Clearer Ownership Rules for Foreign Nationals

The zones have always allowed foreign business ownership, but the regulations now formalise the conditions under which foreign nationals can hold property rights within or adjacent to zone boundaries. This is separate from — but complementary to — the Integrated Tourism Complex (ITC) framework, which remains the primary route for foreigners to achieve full freehold residential ownership anywhere in Oman.

Think of the two frameworks as working in tandem: ITCs give you residential freehold rights (and a residency visa tied to your investment), while the SEZ/Free Zone regulations govern commercial and mixed-use property within designated economic areas. If you are buying a unit in an ITC that sits near a free zone — such as developments in the Hawana Salalah area close to Salalah Free Zone — both sets of rules are relevant to understand.

Residency Implications

Under existing Omani law, purchasing property worth at least OMR 130,000 in an approved ITC qualifies you for a renewable residency visa. The SEZ regulations do not replace this threshold, but they do create a clearer pathway for business investors who want to combine a commercial presence inside a free zone with a residential property purchase nearby. That combination — a registered free-zone company plus an ITC property — is increasingly common among Indian and GCC entrepreneurs operating in Oman.

Escrow and Off-Plan Protections

If you are buying off-plan within or adjacent to a zone, Oman's mandatory escrow rules still apply. Developers must deposit buyer payments into a Central Bank of Oman-supervised escrow account, with funds released only against verified construction milestones. The new SEZ regulations do not override this protection — confirm with your developer that their project is escrow-registered before signing.

The Tax Picture

Oman's tax environment remains one of the most straightforward in the region:

The 12% withholding tax on rental income applies regardless of whether your property is inside or outside a free zone. Zone-based corporate tax holidays apply to business profits, not to personal rental income from residential units.

Which Areas Should You Watch?

Salalah and Hawana Salalah

Salalah Free Zone's proximity to established ITC developments makes the south Oman coast one of the most compelling dual-use locations. Hawana Salalah is the principal ITC in the region, offering beachfront apartments and villas with full foreign freehold rights. Projects such as Riviera at Hawana Salalah and Amazi at Hawana Salalah give you residential ownership within walking distance of a zone that handles significant container traffic and light manufacturing.

Muscat's ITC Belt

While Muscat does not host a free zone in the traditional sense, Knowledge Oasis Muscat functions as a technology and innovation park with its own regulatory perks. Residential buyers often pair a KOM-based business with a home in nearby ITCs such as Al Mouj Muscat, Muscat Bay, or Yiti, Muscat. The SEZ regulatory clarity signals that Muscat's wider economic-zone ecosystem is maturing — positive for long-term capital values.

Duqm — The Long Game

Duqm is the most ambitious of Oman's zones: a planned city built around a deep-water port and a refinery complex. Residential supply is limited and the market is still early-stage, but the finalised Executive Regulations reduce the policy risk that has made some foreign buyers cautious. Watch this space over the next three to five years as Vision 2040 infrastructure spending accelerates.

What You Should Do Now

1. 01Confirm ITC status of any project you are considering — ITC designation is the legal foundation of your freehold rights as a foreigner.
2. 02Ask your developer about escrow — request the escrow account number and the supervising bank before paying a deposit.
3. 03Separate business from residential — if you plan to register a free-zone company, get independent legal advice on how that interacts with your property residency visa.
4. 04Factor in rental tax — budget 12% withholding on gross rental income if you plan to lease your unit.

The Executive Regulations are a positive step: they reduce ambiguity for developers, business operators, and the property buyers who follow them into these zones. Regulatory clarity is one of the prerequisites for institutional investment, and institutional investment is what drives the infrastructure and amenities that protect your asset value over time.

Source: Times of Oman