Oman’s Tourism Sector Sees Boost with Intention to Lease Land

Oman is taking steps to promote tourism in the country by introducing a new scheme that allows non-Omani companies to lease land for development purposes. The scheme, known as an usufruct agreement, grants the lessee the right to use and benefit from the land for a specified period of time.

Usufruct Agreement

Under the terms of the agreement, the lessee is required to return the land to its original owner once the lease expires, which cannot exceed 50 years. However, the lease can be renewed upon expiration, subject to certain conditions.

Key Provisions

• The usufruct agreement is governed by the ITC Law and Ministerial Decision No. 191 of 2007.
• Lessees must return the land to its original owner once the lease expires.
• Leases cannot exceed 50 years but can be renewed upon expiration, subject to certain conditions.

Construction Contracts in Oman

In Oman, construction contracts typically follow a standardized format, which is based on the Omani Standard Documents for Building and Civil Engineering Works (Standard Contract).

Key Provisions

• The contract outlines the scope of work to be performed by the contractor.
• Variations are addressed under Article 640 of the Civil Code.
• Employers have the right to withdraw from the agreement if a variation proves substantial.

Energy Sector

Despite efforts to diversify its economy beyond oil and gas, Oman’s energy sector remains a significant contributor to the country’s income. The sector is governed by laws administered through the Ministry of Oil and Gas and the Ministry of Environmental and Climate Affairs.

Key Provisions

• The main law that regulates hydrocarbons-related activities is the Oil and Gas Law.
• Concession agreements for exploration and production sharing agreements (EPSAs) are granted by the MOG and negotiated among its parties: the MOG and the concession holder.