Duqm Special Economic Zone (SEZAD) in Oman

Duqm, Oman’s flagship initiative under the “Vision 2040” plan for economic diversification and regional development, is coming to fruition in 2022, with several planned projects taking shape. These include the port, dry dock, airport, refinery, and a Chinese industrial park. In this study, we delve into the creation process and unique features of this new city, which follows the example of similar initiatives in Asia, the Middle East, and Africa. Duqm offers diverse commercial and investment opportunities, spanning sectors from oil and gas to infrastructure, services, manufacturing, fisheries, residential, and tourism.

The Duqm Special Economic Zone (SEZAD)

  1. Establishment and Size: Duqm SEZAD was established by Royal Decree 119/2011, covering approximately 2,000 km2, making it the largest special economic zone in the Middle East.
  2. Investment Framework: The Master Plan outlines the investment strategy, incorporating state-funded projects, corporate partnerships with major entities, and the promotion of direct private investment, both domestic and foreign.
  3. Specialized Zones: SEZAD is divided into specialized zones, including the port, dry dock, refinery, airport, and industrial areas categorized into heavy, medium, and light industries. It also encompasses residential, commercial, and tourist zones, along with a logistics complex.
  4. Geographical Advantage: Duqm’s strategic geographical location provides easy access to the entire Arabian Peninsula from the Indian Ocean, bypassing the contentious Strait of Hormuz. It has become a vital logistical hub connecting Asia, Africa, and Europe.
  5. Naval Base: Politically, Duqm is evolving into a regional naval base for the navies of regional and international powers. Agreements with the United States (2019), the United Kingdom, and India (2018) allow American, British, and Indian ships and aircraft to utilize Oman’s ports and airports. China is also actively investing in local port infrastructure to secure its access.
  6. Economic Integration: Duqm’s future evolution depends significantly on regional economic integration. The easing of the crisis with Qatar, the potential for peace in Yemen, and Oman’s closer ties with Saudi Arabia all enhance its overall prospects.

Investment and Economic Policies

Oman’s current policy focuses on enhancing private sector participation in the economy and attracting foreign investment. Key measures to improve the business climate include the new Foreign Investment Law, Privatization Law, and Public-Private Partnership (PPP) Law.

Risks and Economic Dependency

It is essential for businesses to remain vigilant regarding the structural and cyclical challenges in Oman’s economy. The nation’s economic stability is closely tied to the volatility of oil and gas prices, which affects public finances and the government’s liquidity. As of August 2022, Oman enjoys a favorable financial situation due to rising demand for oil and gas, resulting in surpluses.

Incentives for Investment

Investors in SEZAD have unique benefits, including determining product prices, importing goods without prior approval (with exceptions), no restrictions on the duration of goods’ stay in the zone, the recognition of locally manufactured goods for export, no restrictions on repatriating invested capital and profits, the right to establish commercial representation offices, and streamlined customs procedures.

The Real Decree 79/2013 (December 2013) outlines incentives for investments within SEZAD:

  • Tax exemptions (with exceptions).
  • 100% foreign ownership of project capital.
  • Waiver of minimum capital investment requirements.
  • No restrictions on foreign currency receipt, trade, or transfer.
  • Exemption from Commercial Agencies Law provisions.
  • Long-term exemption periods, potentially up to 30 years, with renewals.
  • Right to set product, goods, and service prices.
  • Unrestricted importation of goods, except explosives or chemicals.
  • Local products manufactured within Duqm treated as domestic for export.
  • Repatriation of invested capital and profits without restrictions.
  • Permission for commercial representation offices within customs territory.
  • Efficient customs regulations for rapid inspection and streamlined procedures.

One-Stop Service

SEZAD offers a one-stop service providing information, business assistance, commercial registration, business licenses, approvals for project establishment, energy and water services, land preparation services, environmental approvals, construction certifications, telecommunications services, and customs procedures through its electronic portal.

SEZAD’s one-stop service offers investors and interested parties:

  • Information and guidance on available investment opportunities.
  • Business assistance services.
  • Commercial registrations and business licenses.
  • Immediate approvals and establishment permits.
  • Provision and maintenance of energy and water services.
  • Site preparation services.
  • Issuance of environmental approvals for waste disposal.
  • Construction certifications and municipal services.
  • Provision of telecommunications services.
  • Customs procedures.

This comprehensive overview highlights the significance and potential of Duqm SEZAD in Oman’s economic diversification efforts and its role as a pivotal economic hub in the Arabian Peninsula.


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