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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
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.
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.
The Oman American Business Centre (OABC) invited partners, members and special guests to celebrate Thanksgiving, one of America’s much-loved holidays, which focuses on gratefulness and community.
Over 200 business people and executives representing companies from every sector in Oman recently came together for an evening of networking at the Grand Hyatt Muscat, for the sixth annual Back 2 Business event.
The Oman American Business Centre (AmCham Oman), in conjunction with ABGO, BBF and EPBG, hosted the event, with event partners Grand Hyatt Muscat and Oman Air.
Attendees were joined by H E Marc J Sievers, US Ambassador to Oman, H E Hamish Cowell, UK’s Ambassador to Oman, H E Qais al Yousif and a number of other distinguished guests and Oman business leaders. The evening included a special address by H E Yousif, chairman of the Board of Directors, Oman Chamber of Commerce and Industry.
H E Yousif discussed the lasting importance of face-to-face, real-life networking and encouraged the groups to continue such meetings, stating that ‘business in Oman is all about people’. He also shared about the great strides made recently in various sectors in Oman, including a huge leap forward in the fisheries and aquaculture sector, stating that although there were recent economic challenges, Oman has come through it all stronger and more resilient than ever.
Ali Daud, president of the OABC, said, “Back to Business is a chance for the whole business community to come together under one roof for some very real conversations.
Rebecca Olson, executive director of the OABC, said, “This year, the biggest change was that the invite was for members only, and it was still a huge event. Our experience is that despite recent challenges in the region, more companies are joining our membership now than ever.”
Members of the Oman American Business Center were invited to a sneak peek of the newly renovated Al Bustan Palace on October 22nd. The tour divided members into several groups and highlighted the brand new lagoon rooms and new features of the hotel. Drinks and canapés were enjoyed during a special indoor and outdoor networking time at the Beach Pavilion, which features an expanded deck area. General Manager Katrin Herz welcomed members and explained the new activities, weekly events and ongoing benefits for residents of Oman looking for relaxation or luxury ‘staycations’.
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.
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.
U.S. Chamber, OABC, and U.S. Embassy Muscat representatives meet with Oman Chamber CEO and his team.
U.S. Chamber, OABC, and U.S. Embassy Muscat representatives meet with Ithraa’s head of Investment Promotion.
Connecting businesses, people, and opportunities through exclusive events, the Oman American Business Center (OABC) hosted its first ever ‘Tech Talk’ in collaboration with Mercedes-Benz Oman. At the event, held at Mercedes-Benz’ flagship showroom in Muscat, CEO Lawrence Good spoke about the leading technologies in autonomous driving and electric vehicles, providing OABC members with a sneak peek into the future of mobility.
Rebecca Olson, Executive Director at the Oman American Business Center said, “Innovation is critical to the success of any company, as is the ability to adapt to changes. For many new technologies entering Oman, it’s not a matter of if, but when. Successful businesses are already getting prepared for what’s to come. At OABC, we provide a forum for the exchange of insights, information, and ideas with the hopes of providing the member companies with real, tangible opportunities for growth.”
Lawrence Good, CEO of Mercedes-Benz Oman said, “Mercedes-Benz is known for its innovation. Pushing the boundaries to create superior vehicles, we are constantly looking at ways to provide drivers with something that is more than just luxurious: a product that is also powerful and beautifully designed. It was a pleasure hosting the OABC members at our showroom and speaking to them about how Mercedes-Benz is looking to the future of mobility, inventing new technologies and making them accessible to everybody.”
On the local front, renewable energy within Oman is gaining traction. Earlier this year the country celebrated the installation of its first ever Electric Vehicle (EV) charging station as part of the Middle East Global Electric Vehicle Road Trip, which showcased EVs as a sustainable solution for drivers and businesses.
The Oman American Business Center launched the Discover America Festival, a month-long celebration of US foods and products in Oman, at a special networking event sponsored by Lincoln. Over 150 businesspeople representing companies in every sector, enjoyed fantastic US foods from Lulu Hypermarket and US beverages sponsored by OUA. US Ambassador Sievers shared about the full month of American-themed activities for the Oman public in October.
People in Oman can look forward to experiencing and celebrating American cuisine and products through October under the Discover America Festival.
The festival, designed to highlight the strong economic relationship between the US and Oman, has returned for the fourth year. The official launch reception of the Discover America Festival 2018 will be on October 8 at the Hormuz Grand Hotel. The Oman American Business Center (OABC) will host this event for member companies, festival partners, and other VIPs, with special guest H.E. Marc J Sievers, US Ambassador to Oman.
Presented by OABC, in partnership with the US Embassy, the festival will feature over a dozen events, promotions, and activities across Muscat’s hotels and retailers. The event, planned in coordination with the 150-member companies of the OABC, will highlight regional American cuisines at themed events such as a Big American Brunch – ‘Taste of the American South’ – and an evening BBQ event with a movie screening on the beach.
H E Sievers expressed his support for the many upcoming events highlighting the strong commercial relationship between the US and Oman. “The Discover America Festival is a celebration of the strong brand recognition US products enjoy in Oman, almost all of which enter duty free under the US-Oman Free Trade Agreement,” he said.
Hotels across Muscat will highlight their American flavours and imported beverages from the US. “Members of the OABC, and especially the hotel members, have been planning very creative and unique events for Discover America,” said Rebecca Olson, executive director, OABC. “Many people don’t realise the variety of cuisines available in the US – we’re proud to help OABC’s member hotels highlight everything from Tex-Mex to Cajun foods this month, and hope the Oman public will come taste the many flavours and delicacies presented.”
After the launch event, promotions and discounts would be available to the public for the rest of the month. Retailers will offer sales and promotions on everything from burgers and ice cream, to scented candles and workout gear, said Rebecca.
“Some hotels have month-long special menus featuring American foods or specialty beverages. And as is true every year of the festival, Lulu Hypermarket will present a large display of US products, showcasing all of the many US brands the store has to offer,” she added. Events, discounts and other initiatives of the festival will be promoted via social media (@oabcoman #discoveramericaoman) and on oabc.org/discoveramerica