A free trade agreement between the two nations has boosted two-way trade. Ithraa, Oman’s investment promotion agency, supports the government’s economic diversification efforts by endorsing the country’s non-oil exports
U.S.-Omani relations are nearly as old as the Constitution. Ties were forged between the two countries under the presidency of George Washington when, in 1790, a brig ship called the Rambler, captained by Robert Folger and sailing out of Boston, dropped anchor in the port of Muscat. Five years later, another brig, the Cadet, which sailed out of Salem with Charles Derby at the helm, reached Muscat. Derby sailed back to Massachusetts with a cargo of coffee, marking the beginning of a thriving trade between the merchants of Salem and Muscat.
Since those early days, the two countries have signed several treaties, and established formal diplomatic relations in 1972. In 1980, Muscat and Washington inked a military cooperation agreement, which was renewed and revised in 2010. And since 2009, they have had a free trade agreement (FTA).
According to the U.S. Embassy in Muscat, Omani exports to the United States have increased by 60% and U.S. exports to Oman are up by more than 26% since the FTA was signed. Trade between the two countries consist chiefly of machinery, vehicles, aircraft, agricultural products, and optical and medical instruments that are imported to Oman from the United States, and crude oil, jewelry, plastics, fertilizers, and iron and steel products going in the other direction.
Among the perks given to American investors by the FTA is the right to wholly own companies in Oman, although many foreign companies still choose to partner with Omani companies and tap their local expertise.
The State Department describes Oman in glowing terms: the country with a modern business law framework; respect for free markets, contracts, and property rights; low taxes and an easily navigable business registration process.
Oman also offers expatriates “an excellent quality of life: is a safe, modern, friendly, and scenic country, with outstanding international schools, widely-available consumer goods, modern infrastructure, and a convenient and growing transportation network,” the State Department says.
Minister of Foreign Affairs Dr. Yusuf Bin Alawi Bin Abdullah underscores the sultanate’s successful efforts, as well, saying: “I think we have been able to create a feeling among world institutions that the environment in Oman is suitable to invest in because of stability and confidence of these financial institutions, companies, banks, that the stability is sustainable stability.”
Oman is actively wooing foreign investors through Ithraa, the government’s investment promotion agency, which began life in 1997, when it was known as the Omani Center for Investment Promotion & Export Development (OCIPED).
Ithraa’s main mission is to smooth the way for investors in Oman and grow exports of Omani goods and services. The agency works closely with other government entities to ensure Oman is competitive and is seen as “the best place to conduct business” in the Gulf neighborhood and beyond. Ithraa – the Arabic word for “enrichment” – has representatives around the world who help businesses get a foothold in Oman and to stay there and enjoy commercial success.
The country itself makes Ithraa’s job an easy one, says His Highness Sayyid Faisal Bin Turki Al Said, the Director General of Media and Marketing at Ithraa.
“We have most of the ingredients in place,” he explains. “Oman has been working aggressively on the legal framework and, from a judicial point of view, protecting investments and whatever rights the investors have. The incentive package is quite interesting,” he says.
Efforts to diversify the economy, and move it away from oil-only, have also helped to open Oman to outside investment. Middle East research company Info-Prod Ltd. says Oman is “actively seeking private foreign investors, putting specific emphasis in the industrial field.
Those investors who allow technology transfer and provide employment and training for Omanis are particularly welcome.”
Ithraa is actively involved in helping Oman to move away from oil and branch out into other sectors. The agency defines what it calls “thrust products” to promote, based on predicted volume of sales and exports. “We started with about 14 products and now we have over 40,” H.H. Al Said says. “We spend a lot of time to see what exporters are doing and try to assist them to venture into new markets with extensive market research and surveys.”
Ithraa’s export development department identifies “key exhibitions and conferences where we take our exporters, for example food products, food-processing, marble etc,” H.H. Al Said continues.
At those conferences, Omani producers are not only introduced to potential clients, but the country’s logistics, agriculture, food, infrastructure, transport, nascent IT and pharmaceutical sectors are also presented to the business world.
For foreign businesses looking to set up shop in Oman, Ithraa provides an extensive, free and confidential package of assistance to help identify the full range of hard and soft benefits of choosing Oman as a business location.