The Regulation for the Law Prohibiting Ownership of Lands and Real Estate Properties by Non-Omanis in Certain Places was recently issued pursuant to Ministerial Decision no. 292/2020 (the “Regulations”). The Regulations add further detail to the Law Prohibiting Ownership of Lands and Real Estate Properties by Non-Omanis in Certain Places as promulgated by Royal Decree no. 29/2018 (the “Law”).
This article considers the prohibited places where non-Omanis are prohibited to own land plots and properties, what non-Omanis should do if they currently own land plots or property in the prohibited places, usufruct rights in prohibited places, the ability to rent properties in prohibited places and agricultural lands.
Unless it is within an integrated tourism complex, a non-Omani person cannot own land plots or properties in the following places (the “Prohibited Places”) in accordance with the Law and the Regulations:
- Governorates of Dhofar (except Salalah), Musandam, Buraimi, Ad Dhahirah and Al Wusta;
- Wilayat Liwa, Shinas and Musairah;
- Jebel Al Akhdar, Jebel Shams and any other mountain of strategic importance as determined by the competent authority;
- All the islands which form part of Oman;
- properties which fall within 1000m from the walls of royal palaces in all directions;
- properties which fall within 500m from security and military bodies and other security or military formed units, in each case in all directions;
- archaeological and ancient sites as determined by the competent authority; and
- lands or properties for agricultural use in all the Governorates in Oman.
What happens if a non-Omani person currently owns a land plot or property?
If a person loses his Omani nationality or it is revoked or withdrawn he/she must transfer the land plot or the property which was built on a land plot that was granted to them by the State to an Omani national within two years. This can be extended by one year subject to the approval of the Minister of Housing. The Ministry of Housing shall reclaim the land plot if it is not transferred to an Omani within the given period and, if it is property, the Ministry of Housing shall sell the property to an Omani national and the proceeds of which will go to the non-Omani.
The same period is given to non-Omanis to sell the land plots or properties, regardless of the way in which they came into the possession of the land plot or property in the places mentioned above, to an Omani and, if they fail to do so, the Ministry of Housing shall sell the property to an Omani national and the proceeds of which will go the non-Omani.
Usufruct Rights in Prohibited Places
Non-Omanis who have a usufruct right in one of the Prohibited Places have two years from the date the Regulations come into effect, extendable by one year, to dispose of the usufruct right to an Omani.
Companies that have at least 60% Omani ownership are able to have a usufruct of lands and properties for all uses except agricultural. It is subject to the approval of the Minister and the following conditions:
- it should be used for a development project;
- the project should be approved by the concerned authorities; and
- the period of the usufruct should not be less than one year and not more than ten years.
The period can be renewed for a similar period if the project has been established and it is being used by the usufructee and not rented.
Ability to rent properties in Prohibited Places
Non-Omanis can rent properties, whether for residential, commercial or industrial uses, in a Prohibited Place provided that the property is built, it is used for one of the purposes mentioned, the term of the lease is one year and the Ministry of Housing has been notified and issued a no objection certificate which is attached to the lease application submitted to the relevant municipality which registers the lease agreement.
In relation to agricultural lands, in all governorates non-Omanis can either enter into a usufruct or lease them for a project which will develop Oman. There are some conditions that need to be met for non-Omanis to qualify for this and they include that the usufructee/leasee is a company which is 60% owned by Omanis and the period of the usufruct/lease is not less than one year and not more than ten years. In addition, it is subject to the approval of the Minister of Housing after the filing of the application with all the necessary documents including a feasibility study.
Non-Omanis should transfer the ownership of lands and properties that they own in Prohibited Places before the 10 November 2020. If they fail to do so, the Ministry and the relevant courts are required to intervene and sell their properties to Omanis. It is important to note that any transfer of the land in breach of the law is void and it is not possible to deal with the land or property in anyway (such as division, partitioning, change of use) during this two year period.
Article co-authored by Bassam Al Raisi