Oman Free Zones Guide 2026: Duqm, Salalah, Sohar and More

Oman's main free zones and special economic zones are the Special Economic Zone at Duqm (SEZAD), Salalah Free Zone, Sohar Freezone and Al Mazunah Free Zone. They are supported by Khazaen Economic City, the Madayn industrial cities and Knowledge Oasis Muscat. Most zones allow 100% foreign ownership, exempt imports from customs duty, and offer corporate tax holidays of up to 25–30 years. The Public Authority for Special Economic Zones and Free Zones (OPAZ) oversees them.

Key takeaways

OPAZ was created by Royal Decree 105/2020 in August 2020 and took over the former Duqm authority (SEZAD) and the free zones of Salalah, Sohar and Al Mazunah.
Committed investment across Oman's economic, free and industrial zones reached OMR 22.4 billion at the end of 2025, up 6.8% (OPAZ, February 2026).
Salalah Free Zone (28%) and Sohar Freezone (26%) held the largest shares of that investment, according to OPAZ.
Duqm covers about 2,000 km². It offers tax exemption for up to 30 years, renewable, and land use rights of up to 50 years.
Free zone companies sell to Oman's local market under normal customs rules. Large multinational groups are also subject to a 15% minimum tax from 2025.

Who regulates free zones in Oman?

The Public Authority for Special Economic Zones and Free Zones (OPAZ) was established by Royal Decree 105/2020, issued on 18 August 2020. The decree moved the assets and staff of the former Special Economic Zone Authority at Duqm to OPAZ. It also gave the OPAZ chairman the powers of the old Free Zones Committee for Al Mazunah, Salalah and Sohar. OPAZ licenses investors, allocates land through developers and operators, and runs one-stop-shop services in each zone.

OPAZ's 2025 results, published in February 2026, give a picture of the whole system:

Total committed investment of OMR 22.4 billion, up 6.8% on 2024.
More than OMR 1.4 billion of new investment in 2025 under 325 new agreements. Industry accounted for about 97% of it.
About 85,000 workers, of whom 30,780 are Omani (a 36% Omanisation rate). The zones created 4,467 new jobs for Omanis in 2025.
4,774 small and medium-sized enterprises operating in the zones.

Special Economic Zone at Duqm (SEZAD)

Duqm, in Al Wusta Governorate on the Arabian Sea coast, is Oman's largest zone. It was set up in 2011 and covers about 2,000 km². OPAZ describes it as a mixed zone covering industry, logistics, tourism, trade and real estate.

Facilities. The Port of Duqm and the Asyad dry dock anchor the zone. The Duqm Refinery, owned by the OQ8 joint venture of OQ and Kuwait Petroleum International, has a capacity of 230,000 barrels a day. According to OPAZ's April 2026 Duqm magazine, current projects include the ACME green hydrogen and ammonia plant, a wind turbine factory worth more than OMR 70 million, and a green steel project. Planned facilities include a fisheries and food industries complex and a coastal tourism zone with a master plan of about 31 km².

Incentives (OPAZ). These include 100% foreign ownership, no minimum capital and no currency restrictions. Companies receive tax exemption for up to 30 years from the start of operations, renewable for another 30, and may repatriate 100% of capital and profits. Land is granted under usufruct agreements of up to 50 years, also renewable.

Best suited to heavy and energy-intensive industry, green hydrogen and its supply chain, ship repair, logistics serving the refinery and port, and large land-hungry projects.

Salalah Free Zone

Salalah Free Zone in Dhofar Governorate was established by Royal Decree 62/2006. It sits next to the Port of Salalah, a major container transhipment hub on the Arabian Sea, and close to Salalah Airport. The zone operator, part of the Asyad Group, reports 21 million m² of developed land. It lists sector clusters in petrochemicals, pharmaceuticals and healthcare, food processing, renewables and hydrogen, minerals, and logistics.

According to OPAZ, cumulative investment in Salalah Free Zone reached OMR 5.52 billion by the end of 2025. Another OMR 395 million was added in 2025 through 16 agreements. The zone lists these incentives: full foreign ownership, no customs duties on imports and exports, no minimum capital, and no tax on profits for 30 years. It also offers flexible customs procedures, a one-stop shop, and access to Oman's free trade agreements with the United States and Singapore. Plots range from 1,000 m² to several hectares, and a liquid-bulk pipeline corridor links the port to customer plots.

Best suited to process industries that import feedstock by sea, food and pharmaceutical manufacturing, and regional distribution to East Africa, South Asia and the Red Sea.

Sohar Freezone and Sohar Port

Sohar Freezone in Al Batinah North was created by Royal Decree 123/2010. It covers 45 km² next to SOHAR Port, which lies outside the Strait of Hormuz. The port opened in 2002 and is run by Sohar Industrial Port Company, a 50:50 joint venture between the Government of Oman and the Port of Rotterdam. The port area hosts industrial clusters in logistics, metals, petrochemicals and food.

OPAZ reports cumulative investment in Sohar Freezone of OMR 1.689 billion, with OMR 371 million added in 2025, which included a polysilicon plant valued at OMR 615 million. Sohar's added investment grew 28% in 2025. The OPAZ incentives listed for Sohar include 100% foreign ownership, a corporate tax holiday of up to 25 years, no personal income tax, no import or re-export duties, relaxed Omanisation, and a one-stop shop. A 2019 law-firm guide (CMS) gives the Omanisation rate as 15% for the first ten years. A 500-hectare expansion of leasable land was announced in 2025.

Best suited to metals, solar and chemical manufacturing, and trading and logistics firms that serve the UAE and Gulf markets by road and sea.

Al Mazunah Free Zone

Al Mazunah Free Zone, in Dhofar near the border with Yemen, was established in 1999 as Oman's first free zone. It functions as a trade and transhipment gateway to Yemen and East Africa. OPAZ lists a 30-year income tax exemption with no income declaration required, customs exemption, up to 100% foreign ownership, no minimum investment, and a 20% Omanisation requirement. One feature is unique to this zone: Yemeni workers can work there without an entry visa or residence permit.

Best suited to border trade, wholesale and re-export to Yemen, and light assembly.

Khazaen Economic City, Madayn and Knowledge Oasis Muscat

Khazaen Economic City lies in Barka, South Al Batinah, within easy reach of Muscat. It covers about 51 million m² (51 km²) and includes Oman's first inland dry port, along with industrial, logistics, commercial and residential areas. It was launched in 2018 as a joint venture between the Oman Investment Corporation and Saudi Arabia's MASCO group. OPAZ reports that added investment at Khazaen grew about 63% in 2025. It suits firms that want a bonded, logistics-led location close to the capital.

Madayn industrial cities are a network of industrial estates across the governorates. According to OPAZ, they had cumulative investment of OMR 7.812 billion and OMR 251 million of new commitments in 2025 under 239 agreements. Industrial estates are not free zones, but they offer serviced land and manufacturing incentives.

Knowledge Oasis Muscat (KOM) is a technology park of about 1 million m² in Rusayl, near Muscat International Airport and Sultan Qaboos University. It hosts international technology companies and a start-up incubator. A 2019 CMS guide listed a reduced Omanisation rate of 25% and a minimum share capital of OMR 20,000. Check the current terms with the operator.

Newer zones under development include the Al Dhahirah Economic Zone, the Al Rawdah Special Economic Zone (first phase of 14 km²) and the Muscat Airport Free Zone.

How do Oman's free zones compare?

Zone	Location	Established	Main focus	Corporate tax holiday	Investment (OPAZ, end-2025)
SEZAD Duqm	Al Wusta, Arabian Sea	2011	Heavy industry, refinery, hydrogen, logistics, tourism	Up to 30 years, renewable	Not published separately
Salalah Free Zone	Dhofar, next to Port of Salalah	2006	Petrochemicals, food, pharma, logistics	30 years	OMR 5.52 bn
Sohar Freezone	Al Batinah North, next to SOHAR Port	2010	Metals, solar, chemicals, logistics	Up to 25 years	OMR 1.689 bn
Al Mazunah Free Zone	Dhofar, Yemen border	1999	Border trade, re-export	30 years	Not published
Khazaen Economic City	Barka, South Al Batinah	2018	Dry port, logistics, light industry	Zone-specific	+63% added investment in 2025
Knowledge Oasis Muscat	Rusayl, Muscat	Operating	Technology, IT services	Check with operator	Not published

Free zone or mainland company: what should investors consider?

Free zones work best when a business imports inputs, adds value and exports. Goods that leave a zone for Oman's local market normally pay the customs duty that applies to imports. Selling locally may therefore call for a mainland company, which can also be 100% foreign-owned in most activities under the Foreign Capital Investment Law.

Tax holidays also have limits. Large multinational groups with consolidated revenue of EUR 750 million or more are subject to Oman's Supplementary Tax Law (Royal Decree 70/2024). From fiscal years starting on or after 1 January 2025, it tops their effective tax rate up to 15%, inside free zones as well.

A free zone is a strong fit for export-led manufacturing and re-export. A business that mainly sells inside Oman is usually better served by a mainland company.

For sector and macro context, read our companion article on investment opportunities in Oman in 2026.

How Yazdan Invest can help

Yazdan Invest is an investment group headquartered in Muscat. Its Oman Register department handles company formation and government services, both on the mainland and with zone authorities, and its Visa & Immigration team supports investor residency. The Business Accelerator helps investors plan and launch production lines, and the group's international trade network can support re-export plans. To compare zones for your project, contact us or explore the Business Accelerator.

This article is general information and does not constitute investment, legal or tax advice. Incentives depend on each zone's current regulations and individual agreements.

Frequently asked questions

Which is the best free zone in Oman?

There is no single best zone. Duqm suits large industrial and energy projects, Salalah suits port-based processing and distribution, Sohar suits metals and manufacturing close to the UAE, and Al Mazunah suits trade with Yemen. The right choice depends on your inputs, markets and land needs.

Can foreigners own 100% of a free zone company in Oman?

Yes. OPAZ lists 100% foreign ownership as an incentive at Duqm, Salalah, Sohar and Al Mazunah. On the mainland, the Foreign Capital Investment Law also allows full foreign ownership in most activities.

How long is the tax holiday in Oman's free zones?

According to OPAZ, Duqm offers up to 30 years, renewable for another 30, while Salalah and Al Mazunah offer 30 years. Sohar offers up to 25 years. Large multinational groups remain subject to the 15% minimum top-up tax introduced in 2025.

Do free zone companies pay customs duty?

Imports into the zones and re-exports from them are exempt from customs duty. Goods sold from a zone into Oman's local market are normally treated as imports and pay the applicable duty.

Which authority approves free zone licences in Oman?

OPAZ, created in 2020, oversees Duqm and the Salalah, Sohar and Al Mazunah free zones. Licensing and land allocation are handled through each zone's one-stop shop and operator.