28-07-2025
Oman's FDI: A gateway for the region's prosperity
Oman is moving forward with confidence in its economic journey—one that is full of promise, transformation, and global opportunity. At the heart of this transformation is foreign direct investment, better known as FDI. For many, FDI might sound like just financial inflows from abroad, but it's much more than that.
It brings innovation, advanced technologies, international expertise, and, most importantly, jobs. Together, these elements enable nations like Oman to transition from traditional oil dependence toward a diversified, future-ready economy.
The world economy, however, hasn't made this journey easy. According to the World Bank's Global Economic Prospects published in June 2025, global economic growth is projected to decelerate to 2.3% this year—the lowest pace since 2008 outside of full-blown recessions. At the same time, global FDI flows have been under strain due to rising trade barriers, geopolitical tensions, and a general sense of economic uncertainty. The World Bank notes that FDI inflows into emerging and developing economies have now dropped to less than half their 2008 peak and will likely remain subdued unless governments introduce smart reforms.
Amid this difficult global environment, the Middle East has shown remarkable resilience, and Oman has become a standout success story. According to the FDI Trends Report—July 2025 by the Public Authority for Special Economic Zones and Free Zones, greenfield FDI capital expenditure in the Middle East rose by 30.7% from January to May 2025 compared to the same period in 2024. Project numbers also went up by 14.5%, thanks to long-term planning, strategic diversification, and investor-focused policies across the region.
Oman has emerged as a regional leader in greenfield FDI growth. The same report highlights that Oman witnessed a staggering 4,402% increase in greenfield FDI capital spending during the first five months of 2025, alongside a 36% increase in the number of investment projects. This growth has been driven by strategic investments in renewable energy, ICT, real estate, and the expansion of special economic zones. Oman now ranks first in the region in terms of year-on-year growth in FDI, showing that the country is fast becoming a serious investment destination in the Gulf.
These growth numbers are not just impressive—they're real proof of investor trust. According to the National Centre for Statistics and Information (NCSI), Oman's total FDI stock reached $79.6 billion (equivalent to RO 30.6 billion) by the end of the first quarter of 2025, marking a 20.6% increase from the same period last year. While the oil and gas sector continues to take the lion's share—roughly $64.2 billion—other sectors are quickly catching up. Manufacturing has attracted $7.1 billion in foreign investment, and financial services have brought in $3.4 billion, all pointing toward meaningful economic diversification.
Oman is also drawing interest from global partners. South Korea leads the way, investing over $3.45 billion in Oman during early 2025. This includes a major project by LUPRO—a green ammonia facility in Duqm, built in partnership with Bait Muscat. This facility is expected to produce 5 million tonnes of green ammonia and is supported by a 200 MW power plant and a 2 GW renewable energy complex. China has also made its mark with a $564 million solar cell manufacturing plant in Sohar Freezone. Egypt, too, has committed to projects in ICT and manufacturing, making Oman a preferred destination across Asia and Africa.
All this progress is no coincidence—it is driven by vision and leadership. Oman Vision 2040, the country's blueprint for economic and social transformation, is guiding this shift. This vision aims to reduce the contribution of oil and gas to just 8.4% of GDP by 2040 and boost the share of non-oil sectors to 91.6%. Other goals include producing 1 million tonnes of green hydrogen by 2030 and generating 35% to 39% of electricity from renewable sources by 2040. These are not just numbers; they reflect Oman's strong commitment to sustainable growth and future-ready industries.
To attract more investors, Oman has introduced a host of reforms. The Foreign Capital Investment Law, introduced in 2019, allows 100% foreign ownership in most sectors and removes minimum capital requirements. There are also generous tax breaks in free zones, zero VAT, duty-free imports, and more relaxed Omanisation policies within special zones. Platforms like 'Invest in Oman' make it easy for investors to set up by offering a smooth and transparent approval process.
Another crucial piece of the puzzle is talent. Attracting the right kind of FDI requires skilled professionals—especially in government agencies that promote investment. These professionals must understand not just local rules and sectors but also global market trends, international finance, taxation, logistics, and real estate. Soft skills are equally important. The ability to market Oman's opportunities, build relationships, and negotiate deals is essential for success.
Recognising this, Oman is investing in its human capital. Investment promotion agencies like 'Invest Oman' are working to develop teams that combine technical expertise with strong interpersonal skills. According to experts cited in the FDI Trends Report, investment promotion today is not just about facts and figures—it's about communication, collaboration, and creativity.
To support this, Oman is hosting a major training initiative: the FDI Executive Program in FDI, SEZs & Investment Promotion. Scheduled for September 16–18, 2025, in Salalah, this program is being organized by Smart Investment & Consultancy Gateway (SIG) and NextZone. The sessions will cover global investment trends, strategic promotion, and how to use digital tools and AI for targeting the right investors.
In the end, FDI extends beyond capital—it encompasses knowledge transfer, partnerships, and innovation. For Oman, it means more than economic growth. It's about creating clean energy, new industries, and job opportunities for future generations. It's about placing Oman firmly on the global investment map—while holding true to its heritage, values, and vision. The world is changing fast, but Oman is not merely adapting to global trends—it is shaping them with clarity of vision and strategic intent.
