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Member News: Nasser Hamood al Rawahy, Deputy Chairman of The State Audit institution inaugurated the new office premises of Crowe Mak Ghazali, member firm of Crowe Global. Marc J Seivers, Ambassador of the United States to Oman, was the guest of honour at the event.

Welcoming the invitees, Davis Kallukaran, Managing Partner of Crowe Oman said: “Business models are undergoing rapid transformation ever since the world stepped into the digital revolution. Artificial intelligence, Blockchain, Machine Learning and Cryptocurrency are no longer fancy terminologies but the future of business. These are the tools with which businesses are talking to each other. Moving ahead you cannot live without it. Either you embrace it or you die. We have to be in the race to attract the right talents by employing the state of the art infrastructure and hence our investment in our own office.”

Ghazali Mak, as the firm was known originally, has evolved over the years into Crowe Mak Ghazali, the Oman member firm of Crowe Global.

From Oman Observer

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Oman’s immense investment into infrastructure development in recent years, coupled with its drive to diversify the economy away from oil and gas, has led to a rise in interest by US companies in foreign direct investment into the Sultanate.

This was recently highlighted by a visit to the US city of Houston of a delegation representing the Special Economic Zone Authority in Duqm (SEZAD), led by H.E. Yahya bin Said Al Jabri (Chairman of SEZAD). The event was attended by more than 70 companies, the majority of which operate in the US oil and gas sector.

The US-Oman Free Trade Agreement (FTA), entered into on 1 January 2009, has been key to leveraging foreign investment interests by offering incentives that aim to improve bilateral trade relations.

Key benefits of the FTA

Following several years of negotiation the FTA was entered into on 1 January 2009. The agreement is designed to offer a number of benefits to both Omani and US companies, including:

  • eliminating the majority of tariff and non-tariff barriers;
  • enhancing protection for investors (including enabling investors to fully own businesses without the requirement for engaging a local partner);
  • reducing the minimum share capital requirement for an Omani-incorporated, US-owned entity to OMR 20,000 from OMR 150,000;
  • removing the requirement to have entered into a contract with the Omani government (including contracts with companies partly owned by the Omani government) prior to registering a branch office of a US entity;
  • expediting the movement of goods and provision of services; and
  • safeguarding intellectual property rights, labour and environmental standards, as well as dispute resolution procedures in order to improve the regulatory climate for bilateral trade and investment.

Complying with rules of origin

It should be noted, however, that potential beneficiaries must ensure compliance with certain requirements. In the context of preferential tariff treatment, for example, a product should qualify if it has been wholly grown, produced or manufactured in the US or Oman. There are detailed rules relating to products which do not wholly originate in either country but have been manufactured using component parts from other countries. In general, a product which has been substantially transformed as a result of the manufacturing process will probably qualify for preferential tariff treatment, provided that the value of materials produced in Oman or the US, plus the direct costs of processing operations performed in Oman or the US, is at least 35 per cent of the value of the product at the time it is imported.

Recent successes

A number of recent news stories have highlighted successes stemming from the FTA across a variety of sectors. In November 2018, California-based company GlassPoint Solar which registered in Oman under the FTA in 2011, entered into an MOU with Occidental of Oman to develop plans to establish a mega-solar thermal energy plant with the aim of facilitating oil production in Occidental’s Mukhaizna field. The solar steam produced by the proposed plant would be utilised by Occidental in order to assist in enhanced oil recovery or EOR.

An additional example involves a café named 3rd Street Donuts, owned by Omani entrepreneur Mundhir Al Alawi. Marc J Sievers, US Ambassador to Oman, recently attended the opening ceremony of the 3rd Street Donuts café in Seeb during the Discover America Festival in Oman. The café has taken advantage of the benefits of the FTA by importing duty-free US flour, along with other ingredients used in its products.

3rd Street Donuts demonstrates that small and medium-sized enterprises (SMEs) have the opportunity to utilise the FTA, in addition to larger companies. This is particularly important in Oman, where there is a drive to increase the contribution of SMEs towards the country’s GDP.

Taking advantage of the FTA

At Dentons, while we see the FTA as useful a tool which can utilised to great effect by both US and Omani companies alike, it is critical that both the Omani and US governments continue to raise awareness of the FTA so that potential beneficiaries are fully informed as to how they can make best use of the significant advantages afforded to them. Separately, sufficient guidance and assistance must be available to participants to ensure that the administrative requirements of the FTA are appropriately addressed. The US Embassy in Oman has developed a number of useful resources offering guidance in this area, which can be accessed here.

Dentons is the world’s largest law firm with strong cross-border capabilities, and has operated in the Sultanate of Oman for 36 years (and in the Middle East for over 50 years). We have expertise in advising US and Omani clients on how best to utilise the incentives afforded by the FTA. As the expansion of global markets and value chains continues to make the world a smaller place, we keep you informed about the rules and practices governing the establishment of FTA companies in Oman, and work with local Omani companies to develop and implement the right strategies for trade with the US.

Our associate firm, S&A Law Firm, provides dispute resolution and advocacy services throughout Oman, possessing a deep knowledge in all the main areas of dispute resolution, including litigation, arbitration and mediation.

From dentons.com

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This September, U.S. Chamber’s Middle East team worked very closely with the Oman American Business Center to revitalize this important organization in Oman which serves as the AmCham and the bridge between the two business communities. During the visit, Steve Lutes, Vice President of Middle East Affairs at the U.S. Chamber of Commerce, met with many key leaders to discuss ways to strenghten the U.S.-Oman business relationship, including Ministry of Commerce & Industry Undersecretary Al-Dheeb; the Head of the Public Authority for Investment Promotion and Export Development; and leadership from the Oman Chamber of Commerce and Industry and the U.S. Embassy in Muscat. In addition, the U.S. Chamber was proud to partner with U.S. Embassy Muscat and OABC to host a networking session with OABC’s members, which provided a timely opportunity for a discussion on the administration’s trade agenda.

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Pictured: Oman Ministry of Commerce & Industry Undersecretary Ahmed Hassan Al-Dheeb; Steve Lutes, U.S. Chamber of Commerce; Andrew Barwig, Economic & Commercial Officer, U.S. Embassy Muscat;  and Rebecca Olson, Executive Director, Oman American Business Center. 

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U.S. Chamber, OABC, and U.S. Embassy Muscat representatives meet with Oman Chamber CEO and his team. 

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U.S. Chamber, OABC, and U.S. Embassy Muscat representatives meet with Ithraa’s head of Investment Promotion. 

Announcement of International Tender

  • Consultancy companies and offices specialized in the above – mentioned works, registered with the Board of Tender and interested in subscribing to the aforesaid tender may collect tender related – documents through the Digital Portal of e – Tendering on the following link: https://etendering.tenderboard.gov.om
  • International companies and institutions non registered at the Sultanate may subscribe to the international tender by submitting a formal correspondence regarding the subscription against the aforementioned fees, provided that they shall register according to the applicable laws in the Sultanate within 30 working days after having been informed of accepting their bids.
  • Bids shall be submitted in line with technical requirements and specifications and enclosed with a temporary banking guarantee issued by a local bank or a foreign bank has a branch in the Sultanate of Oman at a value at least 1 per cent of the value of the bid and valid for 90 days from the date of electronic submission of the bid. Tenderers shall submit the original receipt of the temporary banking guarantee one day before the date of submission of bids at the Ministry’s Directorate of Tenders and Contracts, 2nd floor.
  • The prices of the bids shall be inked in the currency of Omani Rial in numbers and letters and the list of the prices shall be dated, stamped and signed by the tenderer.
  • Priority shall be awarded to the Tender Board registered – companies in the category of small and medium enterprises.
  • The period of submitting the bids starts after the period of inquiries mentioned in the e – tendering system finishes immediately till the last date of submission of bids no later than 10 am.

Support and inquiries:

1 . For more information related to the tender , kindly communicate through the website of the e – tendering https://etendering.tenderboard.gov.om

2 . For inquiries related to the technical support through, kindly communicate through etenderhd@ita.gov.om or on 24166670

  • The Ministry shall not be obligated to accept the lowest or any other bids.

For further information, kindly communicate with us through sotic@omantourism.gov.om or on 22088349 – 22088348

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The Sultanate’s on-going efforts to liberalise and diversify the economy offer greater opportunity for enhanced trade, investment and economic ties between Omani and US firms, according to a high-ranking official of the US Chamber of Commerce. Khush Chosky (pictured), Senior Vice President for Middle East and Turkish Affairs, also pledged to work with the Chamber’s new local affiliate, the Oman American Business Center (OABC), to help deepen economic and commercial relations between the two countries.

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Renewable energy project will be structured under the independent power producer model

Petroleum Development Oman (PDO) is planning to develop a 100MW photovoltaic (PV) solar plant at Amin, located in the southern region of the sultanate.

Developers have been invited to submit expressions of interest by 31 January for the 100MW solar project, with the client planning to receive bids in May 2018.

The solar plant is planned to be PDO’s first independent power producer (IPP) project. PDO will be the sole off-taker for the project, and will buy all of the electricity produced by the solar farm.

The contract will involve the design, construction, financing, operation and maintenance of the solar plant for the duration of the power purchase agreement (PPA), which will be for a period of 23 years.

State utility Oman Power & Water Company (OPWP) is also moving ahead with plans to develop solar energy on a large-scale as part of the sultanate’s plans to diversify its energy resources.

In December, OPWP issued a request for qualifications (RFQ) for a photovoltaic (PV) solar independent power project in Ibri, which is about 300 kilometres inland from Muscat. The proposed plant with have a power generation capacity of 500 MW

OPWP says that the RFQ is for developers and is not applicable for engineering, procurement and construction contractors.

The closing date for submitting documents is the 22 February 2018.

MEED reported in early November that OPWP had appointed Germany’s Fichtner and the UK’s DLA Piper as the technical and legal advisers for the scheme. In October, MEED reported that OPWP had appointed US/India’s Synergy Consulting as financial adviser for the solar project.

The proposed IPP will be the second utility-scale renewables project planned in Oman, with the UAE’s Masdar announcing in 2014 it was planning to develop a 50MW wind farm in the southern part of the sultanate in partnership with the local Rural Areas Electricity Company (Raeco).

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