Posted by: amj_admin on July 16, 2018 - 7:52 pm

Oman is poised for a resurgence of investor interest in its extensive and mineral reserves including copper, chromite, gypsum, limestone, marble and potash.  The development of the mining and quarrying sector is a key pillar of the Sultanate’s economic diversification strategy as set out in the current ninth five-year plan 2016-2020.

A recent uptick in applications for copper mining licences reflects both Oman’s efforts to attract investment in the sector, and higher copper prices supported by increased electrification and growing global supply deficits. The grant of a copper mining licence, the first since 2004, to Al Hadeetha Resources (AHR) in June, marks the resumption of copper mining after a lengthy hiatus (output of copper ore dropped to zero in 2016). AHR is a joint venture between Australian-based mining firm, Alara Resources and Omani firm Al Hadeetha Investment formed in 2011 for the purpose of exploring and developing mining initiatives in the sultanate. The Al Hadeetha copper project at Washihi, the single-largest copper resource in Oman, is set to become the next producer of copper concentrate in Oman. The award of the EPC contract for the project’s copper concentrator plant with a capacity of 1 million tonnes per annum is imminent.

The UK’s Savannah Resources PLC also reported early July that they have made progress on obtaining mining licences for the first two of a planned series of high-grade copper mine developments in Oman. Savannah, a 65% shareholder in the Omani company Al Fairuz Mining, the holder of the Block 5 exploration licence, which includes the Mahab 4 and Maqual South copper deposits, has received ministerial sign-off clearing the way for the grant of a licence.

A new mining law and the national mining strategy currently in development by the Public Authority of Mining in collaboration with a consortium of international firms, are expected to be unveiled shortly in the second half of 2018. The draft Mineral Wealth law, which has undergone extensive stakeholder consultation for several years, as well as legislative scrutiny, edged closer to ratification after a joint meeting of Oman’s upper and lower houses of parliament at the end of June succeeded in consolidating views on a final draft. Hopes are high that the new law will add impetus to the solid minerals extractives sector by streamlining the licence application process (which currently requires regulatory approval from eight different ministries), and by extending the current five-year licence periods and mandatory annual renewal requirement.

Posted by: amj_admin on July 2, 2018 - 7:38 pm

Rising crude oil prices and increased government investment in non-oil sectors will boost growth in Oman’s construction sector in 2018 by 10.4% and in 2019 by 11.5% outstripping the MENA construction sector average according to a recent report by BMI Research, a unit of Fitch Ratings.

An earlier report by intelligence provider BNC in April 2018, identified a total of 2,410 active construction projects in Oman with a combined value in excess of US$190bn. Ongoing projects comprise 1,840 projects worth US$61bn urban construction projects, 70 projects worth US$39bn in the oil and gas sector and 150 projects worth US$32bn in transportation.

BMI predicts continued strong growth for the sector over the course of the next five years. The upward trajectory is underpinned by Oman’s favourable foreign investment regulations and incentives, as well as an ambitious economic diversification agenda and robust government support for infrastructure sectors like power and water, tourism, and transport and logistics and the establishment of special economic zones to serve as an investment focus for companies seeking infrastructure opportunities.

Against this substantial project pipeline, AMJ’s construction specialists, managing partner, Mansoor Malik, and senior associate, Henry Mitchell, have contributed an overview of Oman’s construction law regime to the latest Legal 500 Construction Comparative Guide. For guidance on the procurement, financing, permitting and licensing of construction activity in Oman as well as standard contract terms relating to the obligations of parties, taking of security, termination and dispute resolution,

read more

Posted by: amj_admin on April 22, 2018 - 10:39 am

Developing a robust debt capital market to sustain long-term economic growth has been high on Oman’s policy agenda for some years. This policy is beginning to pay dividends with the value of the bonds and sukuk segment of the Muscat Securities Market (MSM) growing by 32% to OMR2.63 billion during the period 2016 to 2017. This represents about 15% of the MSM’s total market capitalisation and an average annual increase of 46% over the last five years.

In a keynote address to the Oman Debt Capital Market Conference held in Muscat on April 18, the head of Oman’s Capital Market Authority (CMA), Sheikh Abdullah Al Salmi, attributed the strong growth to CMA measures to promote debt capital market instruments as an alternative funding mechanism for both government and private sector in addition to stimulating FDI. CMA measures include focusing on key areas of market infrastructure, regulation and product innovation in both the conventional and Islamic segments.

The day-long conference organised by the Gulf Bond and Sukuk Association (GBSA) in partnership with Al Busaidy Mansoor Jamal & Co (AMJ), and Maisarah, Bank Dhofar’s Islamic banking window, assembled industry players, legal experts and stakeholders to discuss the development of both conventional and Islamic debt markets. A panel moderated by AMJ’s Islamic finance specialist, Asad Qayyum, identified the introduction of more diverse and complex instruments and structured products as a key factor to driving development and promoting financial stability.

As at June 2018, the value of bonds and sukuks on the MSM has risen to OMR2.85 billion.

Posted by: amj_admin on April 13, 2018 - 10:36 am

Posted by: amj_admin on April 29, 2017 - 10:11 am

AMJ has advised on the establishment of Oman Global Logistics Group SAOC (OGL), the government’s new transport and logistics development arm. OGL, which has a mandate to implement the nation’s long-term ‘Sultanate of Oman Logistics Strategy 2040’, will bring under one umbrella the 15 different transport and logistics-related undertakings operating in the Sultanate’s ports, free zones, rail, maritime and land transport sectors.

This represents the first restructuring of its kind in Oman undertaken jointly by the Ministry of Finance and Ministry of Transport and Communications. A complex deal, it involved transferring shares and assets held in logistics companies by the Ministry of Finance jointly or in partnership with other private or public sector entities, as well as management control, to the new group company. The hybrid nature of the transaction tested the application and interplay of special provisions and exemptions in Oman’s law relating to companies and capital markets.

AMJ acted as sole legal advisor on the restructuring. Managing partner Mansoor Malik, who led the team, commented, ‘We are pleased to have contributed to this important restructuring of a strategic sector which is key to the government’s diversification drive and future economic prosperity. The establishment of Oman Global Logistics Company SAOC will create economies of scale and efficiencies for government-run companies by consolidating managerial and technical expertise and integrating and streamlining operations.’

AMJ’s team included Nasar Ahmad, senior corporate associate and commercial transactions associate Ahmed Al Busaidy.

Posted by: amj_admin on March 17, 2017 - 9:55 am

Amendments to Oman’s corporate tax law have wide-ranging implications for companies doing business in Oman as well as foreign investors including those without a permanent establishment in the country. The reforms have been in the pipeline since they were presented to the Cabinet in January 2016. They are part of a package of fiscal measures announced in February 2017 aimed at diversifying revenue resources to offset Oman’s higher than forecast budgetary deficit for 2016 due to depressed oil prices.

The new rules introduced by Royal Decree 9/2017 and published in the Official Gazette on 26 February 2017, represent a radical overhaul of the previous tax regime under Royal Decree 28/2009. Changes include:

– removing the tax-free threshold of OMR 30,000 previously available to establishments, companies or foreign persons deemed to have a permanent establishment carrying on business in Oman;

– raising the corporate tax rate from 12 percent to 15 percent effective for all financial years beginning on or after 1 January 2017. A lower 3 percent micro tax rate is applicable to small tax payers who meet specific criteria;

– expanding the withholding tax net by imposing a 10 percent tax on dividends on shares and interests from 28 February 2017;

– extending the definition of ‘income’ to include fees for services paid to foreign persons who are based outside Oman. Whereas the amendments to the withholding tax provisions came into force on 28 February 2017, the amended definition of ‘income’ comes into effect only on 1 January 2018. It remains to be clarified whether withholding tax deductions on service fees payable to foreign persons take effect now or on 1 January 2018;

– applying withholding tax provisions to ministries and government bodies and other state administrative units; tax payers are required to deduct the withholding tax at source and remit to the government within 14 days of the month-end in which the fees are paid or credited to the account of the tax payer.

– introducing a requirement for all tax payers to obtain a tax card from the Department of Taxation of the Ministry of Finance. The tax card number must appear on all of the tax payer’s contracts, invoices and correspondence. Ministries, state administrative units and companies in which the Government has a 40 percent shareholding must obtain a copy of the tax card before undertaking any transaction with the tax payer; and

– removing tax exemptions previously available for a period of 10 years on income arising from operating hotels and tourism projects, agriculture, mining, export of local goods, fishing, health care and education. Only the manufacturing sector is now exempted from tax for a reduced period of up to 5 years.

In addition to the above, the tax regime has now moved on to a self-assessment regime with rules for increased fines and prison terms for officers of taxable entities for failure to comply with the provisions of the law.

For more information contact Mansoor Malik or Asad Qayyum

Posted by: amj_admin on July 25, 2016 - 10:12 am

AMJ recently partnered the Oman Economic Review, a leading business publication, in staging a major business summit in Muscat on the theme of ‘The Diversification Imperative’. The event assembled 300 industry leaders and decision makers to discuss the opportunities and challenges in diversifying the Sultanate’s economy and to lay down a roadmap for the future.

The Summit comprised a number of key note addresses and panel discussions moderated by Nima Abu-Wardeh, former presenter of BBC World News, Middle East Business Report.

For more information, contact Bernadette Bhacker-Millard

Posted by: amj_admin on February 10, 2016 - 10:16 am

AMJ acted as Oman Counsel for the lenders on a syndicated loan of US$1billion to government of Oman in mid-January. Eleven international and regional banks participated in the five-year loan sought to cover part of an OMR3.3 billion deficit in the state budget caused by the decline in oil revenues. The syndicate includes Citigroup, Gulf International Bank and Natixis, who were the initial book runners for the transaction. Other banks are National Bank of Abu Dhabi, Societe Generale, Sumitomo Mitsui Financial Group, Bank of Tokyo-Mitsubishi UFJ, JP Morgan, Credit Agricole, Standard Chartered and Europe Arab Bank.

Signing the agreement on behalf of the Sultanate’s government, Darwish bin Ismail Al Balushi, minister responsible for financial affairs, said the participation of such a large number of banks reflected the trust of global banking institutions in the strength and resilience of Oman’s economy and its positive outlook.

AMJ’s team was led by banking and finance partner, Marcus Pery assisted by William Barrie. Commenting on the deal, Pery said, ‘We are delighted to have acted on this very significant financing transaction which is one of several where AMJ has advised lenders on contracts with a sovereign entity.’ AMJ recently advised Bank Muscat as issue manager and joint lead arranger on Oman’s successful, maiden sovereign sukuk.

Posted by: amj_admin on January 12, 2016 - 10:18 am

Oman’s government published the 2016 General State Budget by royal decree 2/2016 on January 1. The government plans to cut subsidies on utility bills, housing loans, fuel and other goods by almost two thirds this year, trim government spending and develop non-oil revenues to help tackle a budget deficit caused by a fall of more than 50 per cent in revenues due to low oil prices, the finance ministry said in a statement to Oman New Agency.

The new budget projects a deficit of OMR3.3 billion for 2016 or 13 percent of gross domestic product (GDP), down from a deficit of OMR4.5 billion for 2015. Total state spending for 2016 is projected at OMR11.9 billion, down 11 percent from actual spending in 2015 and total revenues projected at OMR8.6 billion down 4 percent from 2015.

A package of austerity measures contained in the budget include postponing the award and execution of low priority projects and cut-backs on expenditure by ministries and government units such as limiting travel, entertainment and overseas training, cancelling family cars and tour vehicles allocated for ministers, undersecretaries and senior officials and prohibiting the use of government cars after office hours.

The government plans to cover OMR1.5 billion of the deficit from reserves, to raise OMR1.2 billion in borrowing from international and domestic markets, and the balance from GCC grant aid. The Budget also envisages the privatisation or disinvestment of government-owned companies in line with a programme under Oman’s 9th Five Year Plan 2016-2020 period also issued on January 1, 2016 under royal decree 1/2016. The programme is aimed at expanding the participation of private sector in acquisition, finance and management of projects through public private partnerships (PPP). The preparation of a PPP framework is currently underway.

(The item is compiled from media reports and does not represent advice, comment or commentary of AMJ)

Posted by: amj_admin on December 7, 2015 - 10:10 am

AMJ has been appointed together with Ernst & Young and Squire Patton Boggs in a consortium to advise the Omani government in setting up a public private partnership (PPP) unit, developing a regulatory framework and exploring options for PPP procurement.The consortium is tasked with exploring a range of PPP models and developing a first draft of a PPP framework by the first quarter of 2016.

Oman’s past experience in unbundling and privatising its electricity market over the past decade as well as a successful track record in procuring independent power and water producer (IWPP) projects using a PPP approach will stand it in good stead as it seeks to attract private sector funding and expertise for sectors other than power and water.

Commenting on the appointment, AMJ managing partner, Mansoor Malik, said: “While a PPP framework is a natural progression of Oman’s privatisation successes in the utilities sector over the past two decades, the process has gained extra momentum due to continuing depressed oil prices. We are privileged to assist the government in developing a robust legal PPP framework to enable it to push ahead with strategic infrastructure projects under Oman’s new five-year development plan and to meet the challenges of the current fiscal climate.”