Overview

• By virtue of Oman Sultan Decree No. 76/2010 Promulgating Corporate Ownership of Land and Real Estates and Oman Sultani Decree No. 12/2006 on the System of Real Estate Acquisition by Non-Omanis in Integrated Tourism Complexes, foreigners can make investments in real estate in Oman.
• This Practice Note will discuss the repossession process if the lender is outside of Oman. A similar topic is discussed in PN:”Mortgages – What happens in the case of Default and Foreclosure”-Oman.

Practical Guidance

• Foreigners can choose more than one structure for investing in Oman.
• According to Oman Sultani Decree No. 76/2010 , a juristic person having foreign ownership (with at least 30% Omani shareholding) must be incorporated as a joint stock company (closed or general) to purchase land in its own name and the land must be developed within four years.
• Oman Sultani Decree No. 12/2006 specifically allows real estate acquisition by non-Omanis in specific pockets, known as Integrated Tourism Complexes (ITC) as finally built up units or land for further development. In this case, foreigners can make 100% foreign investment on built-up units. The land cannot be sub-divided and sold as plots without development but can be given on usufruct.
• In order to develop the lands within ITC, the foreigner must incorporate a company in Oman, which can be a limited liability company (LLC) or a joint stock company (SAOC).
• If the foreigner is seeking a facility arrangement in Oman, then the company must take the form of an SAOC, as this is the preferred legal form of the bankers in Oman.
• Also, within Oman, the project company must ring fence financial liabilities of the borrower company and secured assets as it may be necessary.
• If the lender does not have a legal presence in Oman, then an Omani bank must act as a security agent for the foreign lender to create the legal mortgage and register it with the Ministry of Housing. It is the same in the case of multinational syndicate loans extended against a security on a land or a property situated in Oman.
• In the event of enforcement, the security agent may act on behalf of the foreign mortgagee(s) to bring about the foreclosure through a court process. This security agency arrangement is accepted by the Omani courts.

Related Content

Legislation

• Oman Sultani Decree No. 5/1980 on Regulating Use of Lands in the Sultanate
• Oman Sultani Decree No. 2/1998 Promulgating the Land Register Law
• Oman Ministerial Decision No. 43/1998 on the Regulations of Corporate Ownership and Registration of Real Estate
• Oman Sultani Decree No. 12/2006 on the System of Real Estate Acquisition by Non-Omanis in Integrated Tourism Complexes
• Oman Sultani Decree No. 21/2004 on Regulating the Ownership by GCC Nationals of a Property in the Member State
• Oman Sultani Decree No. 76/2010 Promulgating Corporate Ownership of Land and Real Estates
• Oman Ministerial Decision No. 5/2011 Regarding Commercial or Residential-Commercial or Industrial Lands Ownership
• Oman Sultani Decree No. 29/2018 Promulgating the Law Prohibiting Ownership of Lands and Real Estate Properties by Non-Omanis in Certain Places
• Oman Ministerial Decision No. 43/2012 Organizing Areal Extensions and Increases for GCC Citizens, Non-Omanis and Omani Juridical Persons
• Oman Sultani Decree No. 29/2013 Omani Civil Transactions Law
• Oman Sultani Decree No. 5/1981 on the Usufruct Law
• Oman Sultani Decree No. 88/1982 on the Executive Regulations of Oman Sultani Decree No. 5/1981 on the Usufruct Law