Unlocking business growth through free and special economic zones: Evidence from companies in Oman

Abstract

This paper assesses the benefits of Free Zones (FZs) and Special Economic Zones (SEZs) for companies operating in Oman, while emphasizing their role in economic welfare and diversification in line with the goals of Vision 2040. Based on a synthesis of 31 selected academic papers on Oman and global SEZs, the study identifies key advantages, including tax concessions, foreign direct investment (FDI) attraction through stability and motivation, logistics development, human resource development (HRD), and Investment encouragement. Thematic analysis shows that Omani free economic zones such as Duqm and Salalah improve operational efficiency, with tax breaks reducing costs by 100% for up to 30 years, while FDI inflows have increased due to legal incentives and global alignment that attracts foreign investment. Logistics benefits position Oman as a strong regional gateway, reflecting the success of SEZs in the UAE and its skilled workforce. Salalah FZ supports export-oriented development, drawing lessons from Poland’s SEZ experience. The paper recommends using these zones for FDI and logistics expansion to align with national goals and reduce oil sector dependency, while offering more evidence-based insights into the operation of Omani zones for investors and policymakers.