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ESP to ensure speedy economic recovery

9 Mar 2021

The Economic Stimulus Plan (ESP) endorsed by His Majesty Sultan Haitham bin Tarik on Tuesday aims to support economic recovery efforts and enhance the performance of the national economy. A set of mechanisms and procedures has been adopted to ensure a speedy recovery of economic activities and to ensure fast economic growth.  

In October 2020, the Ministry of Economy set up a working group to develop policies and programmes to stimulate the Omani economy.  

Measures of ESP expected to contribute to –  

Recovery of the local market 
Stimulate small and medium enterprises  
Enhance efforts to improve the business environment 
Attract more investments  
Stimulate enterprises active in the economic diversification sectors that were identified in the Tenth Five-year Plan (2021-2025)  
Protect institutions from exiting the market due to the current temporary economic and financial effects  

Incentives for labour market and employment  

Allocate RO20mn in the 2021 budget to train and qualify Omani jobseekers to be appointed in vacancies in government and private sectors  
Reduce licence fees for recruitment and renewal of expat labour permits  
 

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Incentives to improve business and investment environment  

 

  • Allow starting businesses and commercial and investment activities after obtaining an initial licence that allows the investor to do business without waiting for the final licence, which will be issued after meeting all requirements later.  
    Postponement of loan installments of Al Rafd Fund to small and medium enterprises until the end of December 2021.  
    Grant permanent residency to foreign investors in accordance with the controls and conditions that will be announced by the concerned authorities.  
    Grant foreign investment companies, upon their incorporation, three licences to hire expatriates in accordance with the regulations in force after the issuance of the Commercial Registration.  
    Restructuring of municipal fees related to business licences, within one month of its date. Some of these fees will be merged and unnecessary ones will be cancelled to facilitate procedures and speed up processing of applications.  
    Government procurement tenders not exceeding RO10,000 in value are restricted to small and medium enterprises registered with Riyada.  

    Incentives related to taxes and fees  

  • All companies that operate in economic diversification sectors are exempted from Income tax with effect from January 2021 until the end of 2022.  
    Income Tax rate is reduced from 15 per cent to 12 per cent for SMEs for the tax years 2020 and 2021.  
    Fees for environmental licences that will be renewed in 2021 reduced by 50 per cent for the licence validity period.  
    Rent for land in the Special Economic Zone of Duqm and in the industrial zones of the Public Establishment for Industrial Estates (Madayn) reduced by 25 per cent until the end of 2022.  
    Tourist establishments exempted from Tourism and Municipality Tax until the end of 2021.  
    Hotel establishments exempted from Income Tax due for the tax years 2020 and 2021. 
     

Banking incentives offered by Central Bank of Oman  

 

  • Repayment of loans taken by Omanis who have been laid-off and those whose wages were reduced to be further postponed until the end of September of this year.  
    Banks instructed to respond to requests for  postponement of installments and interest of all borrowers affected by the repercussions of the current situation for six more months until the end of September 2021, without prejudice to their credit rating. 
    Continue incentive packages related to granting credit, including raising the ceiling of the loan ratio, facilitating loans to affected and productive sectors, reducing reserve capital ratios and other measures aimed at helping banks, finance and leasing companies to play their roles in supporting economic recovery efforts and improving the liquidity ratio in the local market. 
    Cooperate with banks, finance and leasing companies to reschedule loans to match the new cash flow of borrowers so as to enhance their capabilities to fulfil their contractual obligations to financing institutions – in accordance with emerging economic developments – without imposing fees for rescheduling.  

     

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