Australian companies are advised to spend time investigating the market, obtain professional advice where appropriate and thoroughly investigate the issues in entering the market and before establishing business relationships.
Australian firms wishing to operate in this market should commit to the highest level of corporate behaviour and familiarise themselves with Australia's laws and penalties pertaining to bribery of foreign officials.
Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. Further information on the regulations governing bribery of foreign public officials is available.
For further information on frauds, scams, personal and asset security, intellectual property protection and other business risks please read more about legal issues.
Current business situation
The current economic stance in Oman is one of economic openness. Sultan Qaboos Bin Said has pursued policies to modernise the economy and position the Sultanate as an active player in the global marketplace. Oman is actively seeking to reduce dependence on oil, develop national infrastructure and take advantage of a growing service and tourism sector. Oman is a middle-income country with an economy based primarily on limited overall hydrocarbon resources, notwithstanding a few significant recent gas finds. Oil and gas accounted for about 79 per cent of the government's revenue in 2015.
Austrade offices in Riyadh and Jeddah, which have responsibility for Oman are open and fully operational.
Business cards in English are acceptable. However, it is a good idea for frequent visitors to the market or those wishing to do business with the government to have business cards in English and Arabic. ‘Small talk’ is vital for the establishment of trust and must not be hurried or dispensed with. In introductory business conversations, talk often centres on the health and wellbeing of the other person, but never about his wife and female relatives.
It is not unusual in the Arab custom of having a number of people in an office all discussing various matters at once. When invited into an office, you will be given a seat, refreshments and be engaged in introductory conversation, after which your host may break off conversation with you and deal with one of his other visitors before returning to you. Coffee, tea, or soft drinks will probably be offered (except during the Muslim holy month of Ramadan when it would be impolite to expose Omani counterparts to open food), and should be accepted. It is customary to drink more than one cup of coffee or tea, but not more than your host or others present.
Refrain from expressing extreme views as this may be seen as a sign of inflexibility. Rarely will your host initiate the business discussions. You will normally be expected to commence with a proposal. Keep descriptions short and to-the-point. Remember, a ‘yes’ does not necessarily confirm agreement, but can merely mean, ‘yes, I hear you’.
In business circles, standard dress for men is a business suit and tie. Evening functions can vary from a sports coat to a business suit with tie and casual occasions, trousers and a shirt are acceptable. Women should wear loose fitting garments, such as a long dress or loose fitting trousers and a baggy shirt. Dress conservatively and avoid wearing short skirts or revealing blouses, though the head does not need to be covered. The exchange of gifts is common practice in business circles, but items are usually limited to small corporate items such as pens and brochures.
Setting up in Market
As a rapidly evolving market, visiting, meeting with potential clients and establishing a local presence is recommended. Finding a suitable local partner or looking to other well established Australian companies in the Middle East would be advantageous. Cultural awareness and etiquette should also be considered. Personal relationships are key to finding and retaining a good local partner and agents are commonly used, but not required. Agreements generally require significant lead time and follow-up before finalisation.
Banking and finance
The Omani banking sector is well developed, with a variety of local and foreign commercial banks available; providing a full range of services. Liberalisation and modernisation of finance are objectives for the Sultanate. Islamic banking has recently been permitted and is an emerging trend. The share of foreign banks is relatively small, with approximately 12 per cent of system assets.
Oman’s banking sector consists of 17 licensed local and foreign commercial banks and two specialised banks. Two Islamic commercial banks began operations in 2013: Al Izz Bank International and Bank Nizwa. The banks are subject to supervision by the Central Bank of Oman (CBO)
The Central Bank of Oman is responsible for monetary policy and regulation of the financial services industry. There are three specialised government owned banks:
- Oman Housing Bank
- Oman Development Bank
- Alliance Housing Bank, as well as a securities market.
Links and resources
Government, business and trade
Australia Arab Chamber of Commerce and Industry
Australia Gulf Council
Oman Chamber of Commerce and Industry
News and media
Times of Oman
Intellectual property protection
Oman has taken measures to implement legal provisions to protect intellectual property rights and is a member of the World Intellectual Property Organization. Royal Decree No. 38/2000 legislates for the protection of trademarks, trade information and trade secrets. Royal Decree No. 67/2008 provides for further industrial property rights, such as patents, industrial and topographic designs, and inventions. Foreign companies with no physical presence in Oman may apply to the Department of Trademarks for trademark protection.
The Ministry of Commerce and Industry handles registration of intellectual property and trademarks are protected for a renewable 10 year period from the date of registration. Penalties for infringement may range from seizure and destruction to fines and imprisonment. Accordingly, specific legal advice should be sought to ensure your intellectual property is protected in Oman.
The Islamic code – the Sharia – is the basis for Omani lawmaking. The Sultan issues laws by royal decree.
Commercial legislation is typical of that in force throughout the Gulf Cooperation Council (GCC). The commercial courts system has a three tiered structure; with a Supreme Court in Muscat, six regional appeal courts and around 45 primary courts throughout the country. Arbitration is generally the preferred method of dispute resolution by foreigners, as an alternative to local Courts.