Interview: Abdullah Al Salmi
How does the Foreign Capital Investment Law ensure the rights of newly formed firms, and what impact has the Invest Easy platform made?
ABDULLAH AL SALMI: Ensuring the rights of international investors remains of utmost importance under the new law. Under Article 13 investor information will be kept confidential, and if breached, government entities will be held liable for any damage incurred by foreign investors. In addition, any investors involved in court cases will see their projects addressed in a more urgent and timely manner.
Under the new legislation, foreign investors are given guarantees against confiscation, expropriation and revocation of their investment licences. Furthermore, the terms and conditions of specific projects will be safeguarded regardless of whether or not there are changes in ownership. Article 19 also gives private investors the right to use government land under usufruct lease agreements.
The Invest Easy platform, for its part, is a one-stop shop for investors to complete the requirements for setting up businesses. All procedures must be facilitated, mainstreamed and simplified through the investment centre in the Ministry of Commerce and Industry (MoCI) to ensure the required investor permits are completed on time. Under Article 5 of the new law, if the MoCI does not respond to a permit request within a given time period, the request is considered to be accepted. This gives the government strong motivation to ensure the timely approval of processes for investors.
In what ways will the new Commercial Companies Law (CCL) encourage more firms to be listed on the Muscat Securities Market (MSM)?
AL SALMI: Our goal is to make it easy for investors to tap into the MSM to finance their projects. The new CCL will not only help the market better utilise and unleash the potentials of capital markets, but it will make it easier to form publicly listed companies. For example, the CCL will encourage the facilitation of large project financing via equity or fixed income instruments such as sukuk (Islamic bonds) and conventional bonds. We also encourage family businesses to publicly list their companies on the MSM. The CCL eases this process and allows them to keep full control of their company. In the past we have seen many family-owned businesses disappear after the second or third generation, and having them publicly listed is a great way to keep them alive.
The CMA is currently working on the a code of governance for state-owned enterprises (SOE). We consider them to be a form of public companies, thus we will use the existing code of corporate governance as a basis. The new and dedicated code of SOE governance will apply to all SOEs, with the exception of publicly listed companies, where the current CMA code of governance will apply.
What is your view on the implementation of the public-private partnership (PPP) law, which is set to increase private sector participation?
AL SALMI: The new PPP law fortifies the transformation of, and separation between, the roles of the government and the private sector as well as the corporatisation of large and state-owned companies. We have made great progress in this regard, starting with the full privatisation of the electricity and power sector, and now with the water segment. For example, many government-owned assets, such as airports and highways, have the potential to be privatised via PPPs. PPPs can also clarify for investors which specific fields they can invest in. However, we must distinguish between PPPs and privatisation. PPPs are easier for the government because assets are shared with the private sector, whereas privatisation requires the complete transfer of ownership and assets from the public to the private sector.
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