Foreign Direct Investment in Oman

Foreign Direct Investment in Oman

2
Acknowledgement
Firstly, I would like to convey my thanks to Allah than I want to thank my family
for their support and encouragement throughout my study. I would also like to
express my great appreciation to my supervisor for his academic support, valuable
assistance and patient guidance. Finally, I would pay thanks to my colleagues for
their advice and support during the planning of this research.

3
Abstract
This research examined the main factors & challenges that facing foreign direct
investment decision in Oman and why this investment needed, as FDI has become
an important source of private external finance for countries and economy
development. The study depends the fact that a high level of competition that is
present between numbers of developing countries gives raise to authors to search
how foreign direct investment in the country can foster its economic growth. In
this research, the motives, challenges, opportunities, and incentives for FDI offered
by Oman for foreign investors are mainly discussed in a thorough manner
particularly in the context of Dhofar Governorate in Sultanate of Oman. The
researcher has collected data from past studies as well as conducted the interview
with few officials that are linked with FDI in Oman. The research has found that
foreign direct investment is needed in Oman in order to grow its economy and
boost local investment however there are certain challenges that limit investors to
invest in Oman such as Omanisation policy and ownership policies.

4
Table of Contents
Acknowledgement...........................................................................................................................2
Abstract............................................................................................................................................3
Chapter one: General Frame............................................................................................................5
1.1.Introduction............................................................................................................................5
1.2.Objectives of the Research.....................................................................................................6
1.3.Research Question.................................................................................................................7
1.4.Research Hypothesis..............................................................................................................7
1.5.Research Structure.................................................................................................................7
2.1.Foreign Direct Investment in Oman....................................................................................10
2.2.Need of Foreign Direct Investment......................................................................................11
2.3.Challenges for Foreign Direct Investment in Oman............................................................13
2.4.Incentive offered for Foreign Investors in Oman................................................................13
2.5.Investment framework and opportunities in Oman.............................................................14
Chapter three :Research Methodology...........................................................................................16
3.1.Research Design...................................................................................................................16
3.2.Data Collection Method.......................................................................................................17
3.3.Sampling Frame...................................................................................................................18
3.4.Data Analysis.......................................................................................................................18

5
3.5.Limitations...........................................................................................................................19
3.6.Code of Ethics......................................................................................................................19
Chapter Four: Data Analysis & Discussion...................................................................................21
Chapter Five: Conclusion & Recommendations............................................................................22
Main findings:............................................................................................................................22
Recommendation.......................................................................................................................22
Conclusion.................................................................................................................................23
References......................................................................................................................................24

6
Chapter one: General Frame
Introduction
The economic growth of a country is linked with the developments in productivity
(Tülüce and Doğan, 2014). The factors such as structural changes, growth in
economic efficiency, and exchange activities are responsible to drive the increase
and development in productivity. In order to improve these factors, trade and
innovation play a substantial role, however, there are many counties which have
high chances of economic growth but they have a lack of investment domestically
(Economic Structure and Context: Demographics and Labor Markets, 2011). To
bridge this gap present between the asset needed to stimulate economic growth of
the country, and domestic investments; foreign direct investment (FDI) is needed
(Abdallah, 2015). Therefore, this paper is aimed to highlight the potential of
Foreign Direct Investment (FDI) for the economy of Oman.
The Foreign direct investments in Oman are influences by various factors
which includes the Gross domestic product, inflation rate, import and export from
Oman. It stands at 88th freest economic the world with a high score of government
spending, government integrity, trade freedoms and labor freedom in the nation.
Apart from this there are general indicators of the growth factors of Oman which
includes the inflation of rate of the consumer prices along with import to and

7
export from Oman. All of these factors are being analyses in the research project
determine the relation and dependability of FDI on other factors of economic
growth. The economic growth of a nation is depicted through the various factors
mentioned above and Oman being an agricultural nation is on the development
path at present times. The major factors which contribute to the growth of
economy is the Foreign direct investment by the foreign investors in the nation
which effects the inflation, GDP, import and export of the nation. In the present
report all these factors are analyzed with the use of statistical tools.
Objectives of the Research
The objectives of this research are as follows:
 To define the challenges for FDI in Oman
 To explain the need of FDI in Oman
 To discover the opportunities of FDI in Oman
 To carry out critical exploration for promotion of foreign direct investment
in the Dhofar Governorate of Oman
 To give recommendations on solutions of improving foreign investment
promotion efficiency
Research Question
The research questions of this study are given below:

8
 What are the methodologies to promote foreign direct investment in the
Dhofar Governorate of Sultanate of Oman (being largest of the eleven
Governorates in the Oman with respect to area)?
 What is the efficacy of these methodologies and what can be done in order
to improve these approaches?
 What would be the strategic vision for the succeeding 10 years particularly
for the policy of foreign direct investment (FDI) in Governorate of Dhofar?
Research Hypothesis
This research’s hypothesis is that:
HI: For the sustainable economic development of Oman, especially its Dhofar
Governorate, raising foreign direct investment is very essential.
H0: For the sustainable economic development of Oman, especially its Dhofar
Governorate, raising foreign direct investment is not essential.
Research Structure
This research is based on five distinct chapters wherein first chapter provide all the
foundation information related to the topic of this research is presented such as
background information, research question, research objectives and hypothesis. In
the second chapter, the information from various research papers on the topic of
research has been gathered which include thorough analysis of its GDP, inflation