The Sultanate introduces a five-year withholding tax relief to boost vessel registration, attract investment, and position Oman as a leading regional maritime hub
Oman is steering its maritime sector toward global prominence with a major fiscal reform — a five-year suspension of withholding tax on service contracts performed aboard vessels registered under the Omani flag. The measure, announced by the Oman Tax Authority’s Tax Policy Department under the leadership of Hossam bin Hamad Al Maamari, will be in effect from September 1, 2025, to August 31, 2030, reported timesofindia.indiatimes.com.
The tax waiver applies exclusively to ships carrying the Omani nationality and officially registered with the Sultanate’s competent authorities. By eliminating withholding taxes on service contracts, Oman hopes to reduce operational costs for maritime companies, encourage more vessel registrations, and enhance the competitiveness of its shipping and logistics industries.
Why is Oman implementing this policy?
The five-year tax relief forms part of Oman’s long-term strategy to diversify its economy, support non-oil sectors, and reinforce its standing as a maritime leader. The Oman Tax Authority noted that the initiative “addresses the specific needs of the maritime transport industry while encouraging vessel registration under the Omani flag and attracting specialised investments.”
The decision aligns closely with Oman Vision 2040 — the national roadmap to reduce dependence on hydrocarbons and foster sustainable, innovation-driven economic growth. By leveraging its strategic location, advanced port infrastructure, and pro-investment policies, Oman seeks to attract both foreign and domestic investors into maritime services, ship maintenance, and logistics.
The initiative aims to reduce operational costs, attract specialised investment, and strengthen Oman’s position as a competitive maritime hub
Opportunities for shipping companies and investors
For shipping operators and investors, this five-year relief creates immediate opportunities:
- Lower costs: The removal of withholding tax significantly reduces expenses for vessel servicing, repair, and logistics.
- Flag advantage: More shipping companies are expected to register under the Omani flag to access the tax benefits.
- Investment magnet: The waiver is likely to attract specialised maritime and port service providers.
- Competitive positioning: Oman gains an edge over regional peers as a cost-effective and transparent maritime destination.
- Limited window: The 2025–2030 period may prompt firms to act quickly to maximise benefits.
Broader economic impact
The reform is expected to stimulate Oman’s maritime ecosystem — increasing port traffic, expanding ship maintenance and logistics services, and creating new employment opportunities. It also strengthens the Sultanate’s global reputation as a business-friendly and forward-looking economy.
As Oman continues to implement Vision 2040, the tax relief signals to international investors its intent to build a resilient, diversified, and globally integrated economy. The long-term success of this policy, however, will depend on sustained regulatory support and infrastructure enhancements beyond 2030.
