Oman ends contracts with non-compliant private firms — Here’s why

The General Secretariat of the Tender Board in Oman has issued directives requiring all ministries and government entities to refrain from contracting with private sector companies that do not comply with the government's Omanisation targets.

The Board issued Circular No. 2025/2, that directs “all entities governed by the Tender Law to enforce the directive of not fully contracting with private sector companies that do not comply with the Omanisation percentages mandated by the government, through the following:

1. “Include the clause related to compliance with Omanisation requirements and employment of national workforce, as per the attached template, in the tender documents prior to issuance.
2. Verify the companies’ compliance with Omanisation requirements through data available in the electronic procurement system (Esnad), based on direct linkage with the Ministry of Labour prior to awarding the tender.
3. Follow up on Omanisation compliance for international companies and institutions not registered in the Sultanate of Oman when they participate in international tenders after awarding, and during contract execution as part of the local content plan.”

Omanisation in the private sector is of utmost importance to the Sultanate, as it aims to enhance job opportunities for national talent. It also aligns with Oman Vision 2040, which promotes economic diversification and encourages the transition of Omani nationals from highly dependent public sector roles to more diverse and emerging sectors. 

While Omani nationals already dominate the public sector with a 90% Omanisation rate, the Sultanate is aiming for a 40% Omanisation rate in the private sector. For specific sectors such as transport, logistics, communications, and information technology, the government is targeting 100% Omanisation in certain job roles, with a goal of creating over 3,500 new jobs for Omani nationals.

The Ministry of Labour in Oman recently announced new employment regulations to increase Omani workforce participation in the private sector. Private companies that have been operating for over a year without employing any Omani nationals are now required to submit an employment plan to the Ministry within one month.

The data shows that:

• Approximately 1,000 large companies employ around 2,00,000 Omanis and 2,45,000 expatriates, averaging about 200 Omanis and 245 expats per company, resulting in a 44% Omanisation rate.
• In comparison, about 19,000 businesses employ 60,000 Omanis and 3,00,000 expatriates, averaging just 3 Omanis for every 15 expats, with an Omanisation rate of less than 17%.
• Most concerningly, over 245,000 companies do not employ a single Omani, despite collectively relying on more than 1.1 million foreign workers.

To be eligible for contracts with entities governed under the Tender Law, private companies operating for more than one year must now employ Omani nationals as directed.

Although, newly established startups that have not yet completed six months of operation, or sole proprietorships, are exempted from this requirement for at least one year, as stated by the Ministry.

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A recent report by the International Labour Organisation (ILO) also highlighted that, to accommodate the 550,000 Omani nationals expected to join the workforce soon, the Sultanate must create at least 220,000 new jobs over the next five years, particularly in sectors dominated by expatriates—to enhance skill competitiveness and expand job opportunities.