Oman Investment Intelligence for the 2025 Edition

Oman has aggressively positioned itself to attract global capital by reducing the Foreign Investor Residency Scheme (Golden Visa) requirement. Previously OMR 500,000, the new OMR 200,000 (approx $520k) threshold for a 10-year renewable visa covers the investor, spouse, children, and parents. This is significantly more competitive than regional neighbors. The visa allows for work, business ownership, and places no minimum stay requirement on the holder.

Investors should calculate net yields conservatively. Gross rental income for a typical 2-bedroom apartment in Al Mouj might be OMR 700/month (OMR 8,400 annually). Against a purchase price of OMR 120,000, this appears to be 7% gross yield. However, deduct service charges (OMR 2,400/year), maintenance reserve (OMR 1,000/year), and vacancy allowance (1 month = OMR 700), leaving net income of OMR 4,300 annually, or 3.6% net yield. More realistically, well-managed investment properties in prime locations achieve 5-7% net yields through optimization: minimizing vacancy via professional management, controlling costs through efficient maintenance, and positioning units for premium rental rates. The tax-free environment means this net yield flows directly to investors without income tax erosion.

The strategy depends on investment objectives. Multiple affordable units (e.g., 3 apartments at OMR 100K each vs 1 villa at OMR 300K) provide: portfolio diversification across tenants reducing vacancy risk, higher aggregate rental yields (apartments typically yield 6-8% vs villas at 5-6%), liquidity advantages as smaller units sell faster, and scalability for reinvestment. However, this approach requires more active management, multiple service charge bills, and higher transaction costs on eventual exit. A single luxury property offers: lower management intensity (single tenant, often long-term corporate lease), stronger capital appreciation (luxury segment has outperformed with 12-15% annual gains), prestige and personal use optionality, and simpler accounting/admin.

Leverage dramatically enhances investment returns in Muscat tax-free environment. Example: purchasing a OMR 200K apartment with OMR 60K down payment (30%) and OMR 140K mortgage at 5% over 20 years. Monthly mortgage payment is approximately OMR 925. If the apartment rents for OMR 1,200/month, after mortgage payment and OMR 200 monthly costs (service charges, maintenance), net cash flow is OMR 75/month or OMR 900 annually. On OMR 60K invested capital, this represents 1.5% cash-on-cash yield - seemingly poor. However, factor in: mortgage principal pay-down (OMR 3,600/year in early years), rental escalation (3-5% annually), and property appreciation (7% annually = OMR 14,000). Total annual return on OMR 60K invested capital exceeds OMR 18,000, or 30%+ leveraged return.

Exit liquidity varies significantly by property type and location. Prime ITCs like Al Mouj and Muscat Bay offer best liquidity with typical sale timelines of 2-4 months from listing to completion. Mid-market properties in established areas sell within 4-6 months. Off-plan units purchased at launch offer excellent exit opportunities at handover when buyer pools are largest. Transaction costs on exit include: real estate agent commission (typically 3% paid by seller), legal fees (OMR 500-1,000), and nothing else - no capital gains tax for individuals. Timing matters: list properties September-March when buyer activity peaks with expat relocations and winter visitors.