Distribution Channels

Foreign companies wishing to distribute their products in Oman face a local agent requirement but are no longer legally required to enter into exclusive agency agreements.  Further, in August 2000, a ministerial decision was issued eliminating the restriction that only majority Omani-owned companies could obtain import licenses.  Agents are also useful, though not legally required, for sales to the Omani Government.  Constrained budgets encourage government procurement officials to buy direct; however, in practical terms, it is still difficult for foreign firms to sell to the government without an Omani agent scouting for and bidding on tender opportunities.

If a foreign manufacturer or supplier does enter into an exclusive agency agreement, it is not permitted to sell or distribute the specified product, good, or service itself or through another agent or broker, except for the exemption on bringing goods in through ports or airports.  An importer bringing in goods covered by an agency agreement must pay that agent a five percent commission if the goods are brought into Oman overland, but this requirement is waived if the goods are brought in via ports or airports.

Separate agency agreements for the Northern Region (Muscat Area) and the Southern Region (Salalah) are permitted.  The manufacturer or supplier may not unilaterally terminate the agency agreement except where there is an unjustifiable breach of agreement by the agent.  Agency agreements must be approved by the Oman Chamber of Commerce and Industry (OCCI) and registered with the Registrar of Agents and Commercial Agencies of the Ministry of Commerce and Industry (MOCI).  The practical effects of this regulation on a foreign supplier are substantial: the MOCI may prohibit the importation of goods and merchandise of suppliers who do not have an independent commercial agent registered in Oman.