Over 245,000 Omani Firms Lack Local Employment: Implications for Investment and Economic Growth in Oman
Muscat: The Ministry of Labour has introduced a comprehensive set of regulations and incentives aimed at balancing business sustainability with the localization of jobs. This announcement mandates that firms and companies that have been established for one year must hire at least one Omani citizen. The decision follows data indicating considerable disparities in Omanization rates among various businesses.
Currently, a small number of companies employ the majority of Omani nationals, while thousands remain devoid of local hires despite benefiting from Oman’s business environment. The statistics reveal the following:
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About 1,000 large firms employ nearly 200,000 Omanis alongside 245,000 expatriates, resulting in an Omanization rate of 44%, averaging 200 Omanis for every 245 expatriates per company.
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Approximately 19,000 establishments employ around 60,000 Omanis compared to 300,000 expatriates, with an Omanization rate of just 17%—equivalent to about 3 Omanis for every 15 expatriates.
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More than 245,000 businesses do not employ any Omani citizens, relying instead on over 1.1 million expatriates, leading to a 0% Omanization rate.
- The significant variation in Omanization rates underscores the necessity for corrective measures.
This initiative aims to realign the labour market, combat hidden trade, ensure equitable distribution of opportunities, and enhance competitiveness through sustainable and fair practices.
In a move to empower local talent and foster job localization, the Ministry has also introduced an employment package tailored to market needs. This package includes training-linked employment programs, on-the-job training initiatives, wage support schemes, and flexible options for meeting Omanization quotas—such as recognizing self-employed individuals and part-time workers in the required ratios.
To accommodate the diverse economic realities faced by businesses, the ministry has adopted a flexible enforcement approach. Firms that have operated for one year without hiring Omanis must submit an employment plan within one month of notification. Companies with 10 or more employees are required to comply within three months, while smaller firms are granted a six-month grace period. Sole proprietors managing their businesses will be exempt for one year from the effective date of this decision.
To ensure just implementation and address sector-specific concerns, the ministry has established a committee to review appeals, evaluate exceptional cases affected by the new rule, monitor its effects, and provide observations and recommendations based on practical outcomes.
Special Analysis by Omanet | Navigate Oman’s Market
The new Omanization regulations mandate that all firms employ at least one Omani citizen after one year of operation, creating significant opportunities for local talent and enhancing market competitiveness. Businesses must strategically assess their workforce policies to align with these regulations, balancing the need for compliance with the potential for innovation through a more diverse workforce. Smart investors and entrepreneurs should now evaluate training initiatives and support schemes to not only meet quotas but also harness the capabilities of a localized workforce, ultimately contributing to sustainable growth in Oman.
