Before comparing anything, separate the three regimes, because they are routinely lumped together and they behave very differently.
| Regime | Examples | Customs status |
|---|---|---|
| Free zones | Sohar, Salalah, Al Mazunah, Muscat Airport | Outside Omani customs territory |
| Special economic zone | Duqm | City-scale zone: industrial, residential, tourism, port |
| Industrial estates | Rusayl, Nizwa, Sur, Buraimi, Samail and others, under Madayn | Inside Omani customs territory — not free zones |
That last row is the one that costs people money. Madayn's industrial cities, and the Knowledge Oasis Muscat technology park, are frequently described online as free zones. They are not. Goods there sit inside Omani customs territory, the tax exemption is much shorter, and the Omanisation requirement is substantially higher than in any actual free zone.
The new law, and the regulation that has not appeared
Royal Decree 38/2025, effective 13 April 2025, issued a unified Special Economic Zones and Free Zones Law, repealing the old Free Zones Law of 2002 and superseding Duqm's own framework. Key provisions:
- Article 8 — the capital of an operator, enterprise or real estate developer may be wholly owned by non-Omanis. This makes 100% foreign ownership a statutory right rather than a zone policy.
- Article 9 — the OPAZ board *may* exempt an enterprise from the Commercial Companies Law minimum capital requirement. Note the discretion.
- Article 27 — exemption from income tax for 10 years, renewable for two similar periods, for activities of a special nature. That is a maximum of 30 years, not an automatic one. Banks, financial institutions, insurers, telecom providers, construction and contracting companies and transport enterprises are excluded.
- Article 42 — land for real estate development is allocated by usufruct, and a developer may sell units to non-Omanis as freehold, "in the manner specified by the regulation".
Royal Decree 38/2025 required the executive regulations within one year — a deadline of around 13 April 2026. As of August 2026, OPAZ's own legislation page still lists only the repealed 2002 Free Zones Law, and we could find no news confirming the regulations have been issued.
This matters because Article 42's freehold mechanism is expressly contingent on the regulation. If you are being sold freehold in a zone real estate project, ask what regulation the sale is being made under.
The new law protects existing operators: they keep the benefits under the legislation and agreements in force when they were licensed. So a company licensed in Sohar under Royal Decree 123/2010 may hold different terms from one licensed today under RD 38/2025.
This is the most likely explanation for OPAZ's Duqm page still advertising "up to 30 years, renewable for a further 30" while the new general law caps the regime at 30. Treat any incentive figure as dependent on when the licence was issued.
Zone by zone
| Zone | Omanisation | Tax holiday | Notes |
|---|---|---|---|
| Duqm SEZ | 10% (official) | OPAZ page says up to 30 years, renewable | No minimum capital. Usufruct up to 50 years |
| Sohar Free Zone | 15% years 1–10, then 25%, 35%, 50% | 10 years, renewable in 5-year blocks to 25 | Tiered Omanisation is rarely mentioned in marketing |
| Salalah Free Zone | 20% (secondary sources) | 30 years | Pharma, green hydrogen, mining, petrochemicals, logistics |
| Al Mazunah Free Zone | 20% (official) | 30 years | Exempt from the Commercial Agencies Law. Yemeni workforce provision |
| Muscat Airport Free Zone | Not published | Not published | Newly operational in 2026, air cargo and logistics |
| Madayn industrial estates | ~35% implied (65% foreign cap) | 5 years only | OMR 1/m²/year for the first five years |
| Mainland | 20%–60% by sector | None — 15% corporate tax | Unrestricted domestic market and tender access |
Look at the Sohar row again. Nearly every published summary quotes 15% and stops. The zone's own rules escalate that to 25% in years 11–15, 35% in years 16–20, and 50% in years 21–25. If you are modelling a twenty-year industrial investment, that escalation belongs in your cost base from the start.
And look at the Madayn row. An industrial estate requires roughly three times the Omanisation of Duqm and gives a five-year tax exemption instead of thirty. It buys you cheap land and mainland customs status. That may well be the right trade — but it is a trade, not a free zone.
Duqm land rates
Duqm publishes its lease rates, which is unusual and useful:
| Use | OMR per m² per year |
|---|---|
| Clean energy | 0.100 |
| Heavy industry | 0.500 |
| Tourism land | 0.750 |
| Medium industry | 0.850 |
| Light industry, warehousing, commercial, residential | 1.000 |
| Beach tourism land | 1.500 |
| Prime commercial-residential | 2.000 |
Industrial electricity runs 12–24 baisa per kWh, and water connection between OMR 10 and OMR 800 depending on meter size.
The catch: selling into Oman
This is the constraint that decides the question for most trading businesses, and it is systematically underplayed in zone marketing.
A free zone sits outside Omani customs territory. Sohar's own published rules are explicit: a working company may sell products and provide services within the customs territory, but goods moved from the zone into mainland Oman are treated as foreign goods. In other words, you pay import duty — Oman's standard GCC external tariff is 5% — on your own products entering your own country's market, plus VAT.
So the calculation is straightforward. If you are exporting or re-exporting, a free zone is excellent: duty-free imports, duty-free exports, low Omanisation, long tax holiday. If your customer is in Muscat, you are paying a tariff for the privilege of a tax holiday you may not need.
Whether free zone companies can bid for government contracts. Consultancy sources say they cannot without a mainland presence. We found no official Tender Board or Ministry of Finance source addressing this either way. If public-sector work is part of your plan, confirm this before choosing a zone.
Whether you need a mainland distributor to sell domestically. One consultancy states this as a requirement. Sohar's own rules imply direct sale is permitted subject to customs duty. These may both be true for different zones or activities.
Al Mazunah's unusual arrangement
One zone deserves a specific mention. Al Mazunah, on the Yemeni border in Dhofar, allows a Yemeni workforce to work in the zone without Omani entry visas or residence permits. It also hosts a joint marketplace for Omani and Yemeni goods, and permits Yemeni customs procedures to be applied to goods arriving from Yemen.
It is additionally exempt from the Commercial Agencies Law, meaning companies there do not need a registered Omani commercial agent. For a business whose model is trade into Yemen and East Africa, that combination does not exist anywhere else in the country.
Costs
One widely-quoted figure needs correcting. OPAZ did cut commercial registration fees from OMR 1,000 to between OMR 30 and 40, with branch registration at OMR 12 — but that 2022 decision applied specifically to SMEs registering in the Duqm special economic zone, not to all OPAZ zones. Reporting at the time noted the board considered and did not initially extend it to Sohar, Salalah and Al Mazunah.
A broader 50% SME fee reduction across OPAZ-affiliated zones, covering more than 80 services, was approved in 2023, but the resulting fee schedule was not published, so we cannot give you current per-zone figures.
Which suits what
- Duqm — capital-intensive industry, fisheries, maritime and dry dock, logistics and re-export, tourism megaprojects. Best where you need scale, the lowest Omanisation available, and fifty-year land tenure, and are not selling to the Muscat consumer.
- Salalah — petrochemicals, green hydrogen and ammonia, mining, pharma, food processing. Port access to Indian Ocean and East African trade lanes.
- Sohar — metals, logistics, food manufacturing. Deep-water port, close to the UAE border corridor. Model the Omanisation escalation.
- Al Mazunah — trade with Yemen and East Africa, warehousing, food processing. Genuinely niche and genuinely differentiated.
- Muscat Airport Free Zone — air cargo, time-sensitive and high-value goods, aviation services.
- Madayn industrial estates — manufacturing SMEs selling into the Omani domestic market, where cheap land and mainland customs status outweigh a higher Omanisation burden and a shorter exemption.
- Mainland — anything selling to the Omani government or the domestic retail and services market. You pay 15% corporate tax and higher Omanisation, and in exchange you have no customs friction and no tender eligibility question.
What changed in 2024–2026
Should you register in a free zone or on the mainland in Oman?
Do you pay customs duty selling from an Omani free zone into the mainland?
Are Madayn industrial estates free zones?
What is the Omanisation rate in Oman's free zones?
How long is the tax holiday in an Omani free zone?
Can you buy freehold property in an Omani special economic zone?
- 13 April 2025 — Royal Decree 38/2025 unified the zones law.
- ~13 April 2026 — the deadline for executive regulations passed, apparently without them being issued.
- 1 March 2026 — Royal Decree 39/2026 issued a new joint statute for OPAZ and Madayn, expanding OPAZ's supervisory powers and creating a unified single-window service covering registration, licensing, permits and municipal services, with formal coordination with the Ministry of Labour and the Royal Oman Police. Whether this merges the two authorities or simply gives them a shared statute is not clear from the available reporting.
- May 2026 — Muscat Airport Free Zone reached operational readiness, with Asyad Group signing the first usufruct agreement.
- 31 May 2026 — the mainland Omanisation compliance deadline for government tender eligibility, which widens the practical gap between mainland and zone hiring obligations.