Foreign Investment in the Sultanate of Oman: Legal Guarantees and Weaknesses in Providing Investment Protection

As a developing country, the Sultanate of Oman finds it relatively challenging to balance foreign investment protection whilst safeguarding its national sovereignty and interests; however, it recognizes the importance of providing the necessary legal protection for foreign investors. This is the first study to examine foreign investment protection in Oman. It identifies existing guarantees and weaknesses in protecting foreign investment within the Omani legal system and establishes how this level of protection could be enhanced from a legal perspective. It examines the extent of Oman’s existing legal obligations under the terms of the multilateral and bilateral investment agreements to which it is a signatory, to examine the role they play in safeguarding foreign investors’ rights. It also investigates the effectiveness of Oman’s dispute settlement mechanisms for resolving foreign investment disputes. Oman’s administrative policies and practices relating to foreign investment are analysed in order to pinpoint any shortcomings in the current system for enforcing foreign investment legislation. Based on these findings, policy recommendations are made which are intended to improve the protection offered to foreign investment in Oman whilst allowing Oman the necessary degree of protection to its own public policy space. This study concludes that Oman have taken the approach to provide adequate legal protection for foreign investment. In addition, in the context of the development of international investment law, the Al-Tamimi case in particular illustrates the need for Omani legislation and legal practice to strike a balance between protecting foreign investors' rights and safeguarding national interests. Moreover, Oman cannot reduce any guarantees in its international agreements, particularly with regard to seeking international dispute resolution, unless it can guarantee an efficient national legal system and dispute resolution mechanism. Whilst improved legal protection plays an important role in attracting foreign investment, this needs to be part of a broader strategy aimed at making the Sultanate a desirable destination for overseas investors. Thus, this study recommends that in order to enhance protection for current foreign investors and attract future investment Oman needs to establish a specialised investment council with a unified policy, making it easy to do business in the Sultanate. This initiative needs to be supported by a new national arbitration centre in Oman and training to upskill the Omani judges and workforce