Oman

Salalah’s global location, connectivity and cost competitiveness provide a unique advantage in terms of reach, enabling global sourcing and exporting from and to the world, and competitive total landed costs.

First, the location of SFZ provides relocating manufacturers direct access to countries that are mostly raw materials exporters.

Second, Salalah is among the most competitive cost locations in the region in terms of labor, utilities and infrastructure which combined with the proximity to the raw material sources offer relocating manufacturers competitive conversion costs. The regulatory environment of international standards, provides investors assurances of IP protection, 100% foreign ownership, taxes exemption and freedom of repatriation of capital.

The location becomes more attractive when considering the access it offers to Free Trade Agreements (FTA), currently regionally net importing markets, and trade routes. The access to the US-OMAN Free Trade Agreement (FTA) provides considerable duties exemptions. The FTA is an interesting opportunity to attract companies seeking to reduce their cost, if they generate at least 35% of their value in Oman. The FTA seems to be particularly attractive in various sectors such as textile, electronics and other consumer goods and products, traditionally exported from Asia to the US. Neither Europe, India, nor China have a similar agreement. Tenants of SFZ can start trading in a true global customs free environment.

Furthermore, the location is the center of gravity to the East Africa/GCC/Subcontinent market, which imports more than USD$620 Bln of goods and materials per year, providing defacto an attractive regional market.

Finally, the strategic location between trade routes of the East and the West (with over USD 2 trillion worth of goods passing through every year, Salalah is located right at the heart of world trade) gives Salalah Free Zone a shipping cost and delivery time advantage to relocating manufacturers when compared to China, USA and India as well as regional competitors.

The location has already developed the required connectivity enablers to exploit its potential as it is served by the Port of Salalah, an international airport, a major network of highways into GCC markets, and in time, will be connected by a GCC-wide rail network.

Oman Air also offers a competitive sea-air connection from Asia to Europe that saves 48 hours on lead times and passes through Salalah.

Salalah Port is today a major regional and global transshipment hub, second only to Dubai in terms of size, and first in the Indian Ocean. It is also one of the biggest deepwater ports in the world. Three of the World’s largest shipping lines call at the Port of Salalah offering regular weekly connections to global hubs (e.g. 23 to Europe, 21 to Indian subcontinent, 13 to Asia, and 11 to Africa). As a result, import and export shipping times are on average 30% to 40% lower than other competing locations (e.g. 15 days to New York, 12 days to England, and 8 days to Singapore).

The stable economy has an "A" sovereign risk rating, making it second only to Saudi Arabia in GCC member states' in terms of rankings. GDP growth has been strong, led primarily by oil and gas. In 2009, it was second in the GCC region in terms of GDP growth, at 3.6%, behind Qatar's 8.5%. The country is actively pursuing a development plan based on diversification, industrialization and privatization to reduce the oil sector's contribution to GDP.

Currently, Oman offers a competitive environment for International investors. It was ranked 12th for Government Efficiency, according to the World Economic Forum. It is one of the top ten most secure nations in the world to do business, and has a strong track record for controlling corruption and streamlining its regulatory environment.

In 2009, a free trade agreement between the United States and Oman came into force. This FTA is one of only 13 currently active bilateral and multilateral FTAs entered into by the United States.

The economy of the Sultanate of Oman has been growing steadily since the last two decades, taking advantage of its geographic location along the Europe-Asia trade lane and in the middle of a broader region spanning from Eastern Africa to the southern borders of Central Asia, and India to Pakistan.

The stability of the country has largely participated in its progress and prosperity. It enjoys solid financials, a high GDP per capita, along the other GCC countries, a positive trade balance, and is abundant in natural resources especially oil, gas, and minerals. Oman’s FDI has increased significantly in the last year, reaching $12 billion since 2001.

The Omani GDP is heavily dependent on the Oil sector, in 2005 the sector contributed to 49% of the country GDP and decreased to 40% in 2009. Based on Omani Government Vision, the share of oil and gas in the GDP should decrease to 20% by 2020.

Oman is planning to boost mining and quarrying in order to contribute more than 2% of GDP by 2020 with an estimated yearly growth of 10.8%. Tourism is a growing sector of the economy and is expected to grow 7.5% annually.

Infrastructure projects throughout the country are planned by the government. Existing ports, airports and roads are to be expanded to accommodate higher capacities. Omani electricity is heavily dependent on gas, while alternative and coal natural resources are now more and more discussed and proposed as means of diversification from gas.