Foreign Investor Guarantees in Oman: Protection from Confiscation and Free Transfers

The first question any foreign investor asks before committing capital: what protects my project from sudden decisions? The Foreign Capital Investment Law issued by Royal Decree 50/2019 answers with a full chapter of guarantees: protection from confiscation and administrative seizure, strict limits on expropriation, freedom to transfer returns abroad, and protection from arbitrary licence cancellation. Said Ibrahim Ambusaidi Advocates (SIA), a law firm in Muscat, sets out these guarantees and how to invoke them.

What protection exists against confiscation and seizure?

Article 23 of the Law provides that no investment project may be confiscated except by court judgment, and its funds may not be seized, frozen, impounded or placed under receivership except by court judgment, with the sole exception of tax debts owed to the State. An administrative decision alone cannot touch the project’s assets; a court must act.

Expropriation is confined by Article 24: an investment project may only be expropriated for the public benefit, in accordance with the Expropriation for Public Benefit Law, and against fair compensation assessed at the time of expropriation and paid without delay. Nor may the usufruct or lease contract granted to the project over its allocated land be terminated except in the cases the law defines.

Can the investor transfer profits abroad?

Yes. Article 26 guarantees the foreign investor, subject to the laws in force, the right to make all transfers relating to the investment project to outside the Sultanate at any time, including the investment’s returns and the proceeds of selling or liquidating the project wholly or partly. Profits and capital are not trapped — a guarantee central to any financier’s risk pricing.

What protection exists against licence cancellation and hasty sanctions?

Article 25 provides that the competent authorities may not cancel an approval, licence or permit issued to the project except by a reasoned decision, after notifying the investor in writing of the alleged violation, hearing his point of view, and granting him a period to remove its causes. Even for administrative sanctions, Article 28 requires written notice to the investor to correct the violation within a set period before any of the graduated sanctions of Article 29 is imposed. Every decision touching your project has an avenue of challenge, and it starts with proving these procedures were breached.

If a dispute arises, the Omani courts have jurisdiction, investment project cases are heard with urgency, and the parties may agree to settle disputes by arbitration, under Article 17 of the Law.

Key facts

• No confiscation of an investment project, and no seizure or freezing of its funds, except by court judgment — tax debts excepted — under Article 23 of Foreign Capital Investment Law RD 50/2019.
• Expropriation only for public benefit, with fair compensation assessed at the time and paid without delay, under Article 24.
• The investor may freely transfer the investment’s returns and sale or liquidation proceeds abroad, under Article 26.
• A project licence can only be cancelled by a reasoned decision after notice, a hearing and a cure period, under Article 25.
• Administrative sanctions require written notice and a correction period, under Articles 28 and 29.
• Investment disputes are heard with urgency and may be arbitrated, under Article 17.

When to involve a lawyer

Involve a lawyer if your project faces a suspension or licence cancellation issued without the procedural safeguards, if your funds were seized or frozen without a court judgment, if an expropriation compensation offer strikes you as unfair, if your legitimate transfers are being obstructed, or if you want arbitration and protection clauses built into your investment contracts.

At Said Ibrahim Ambusaidi Advocates we challenge decisions affecting investment projects and represent investors in compensation disputes and arbitration before the courts and tribunals across Oman. The first consultation is free by phone or WhatsApp on +968 9706 3030. We are based in Al Khoudh, Seeb, Muscat, and work Sunday to Thursday, 9:00 to 13:00 and 14:00 to 17:00, in Arabic and English.

This article is general legal information, not legal advice.