Oman’s Tiered Expat Work Permit Fees: Incentives for Omanisation Compliance

The Sultanate of Oman is reshaping its approach to foreign worker employment with a new tiered fee structure for expatriate work permits. This system directly links costs to a company’s adherence to national employment targets, known as Omanisation. Announced by the Ministry of Labour, the regulations reward firms that meet or exceed local hire quotas with substantial fee discounts, while penalizing those falling short by doubling their permit fees.

A Shift Towards Prioritizing Omani Employment

This move reflects a broader regional trend towards strengthening regulations on foreign labour and prioritizing national workforces. Oman’s new framework, implemented under Ministerial Decision No. 602/2025, came into effect at the end of January 2026 [Muscat Daily]. The system aims to create more job opportunities for Omani citizens and balance private sector workforce demand with the priority of employing nationals [Muscat Daily].

How the Tiered System Works: Incentives and Penalties

Companies demonstrating compliance with Omanisation benchmarks are categorized as “Green Category” and receive a 30 percent discount on expatriate work permit and practice license fees [Muscat Daily]. Conversely, non-compliant employers face doubled fees for the same permits, significantly increasing the cost of hiring foreign talent.

Omanisation quotas vary by sector and company size. The system classifies companies into three categories – green, yellow, and red – based on compliance indicators [Muscat Daily]. Firms in the yellow and red categories are subject to doubled charges.

Administrative Simplifications

Alongside the fee overhaul, the Ministry of Labour has extended the validity of work-practice licenses for expatriates from 15 to 24 months, aligning them with standard residency permits. This change has been welcomed by employers as it reduces administrative burdens [Muscat Daily]. Employers can now upgrade an existing worker’s professional category by simply paying the difference in fees, rather than applying for a new permit.

Broader Labour Reforms and Omanisation

Oman’s tiered fee regime is part of a long-running initiative to strengthen national labour participation, widely known as Omanisation. Similar efforts are underway across the Gulf region, with countries like the UAE and Saudi Arabia implementing strict compliance requirements for companies [Times of Oman]. Royal Decree 53/2023, which promulgates the Labour Law, firmly establishes “Omanization” as a structured program aimed at increasing the targeted employment of Omani nationals within the private sector workforce [Times of Oman].

The new Labour Law mandates that employers maintain a register with details on their Omani workforce, including occupations, wages, and gender, along with job vacancies and annual Omanisation plans [Times of Oman]. Employers with 25 or more employees must also publicize job vacancies, adhere to the ministry’s occupational classification, provide skill development training, and ensure a suitable work environment [Times of Oman].

Expanding Omanisation to New Professions

The Ministry of Labour has also been actively expanding the list of professions restricted to Omani citizens. Ministerial Decree No. 501/2024 amends provisions of Ministerial Decree No. 235/2022, adding 32 professions now reserved for Omanis [Oman Observer]. These include roles such as drilling engineers, quality control managers, hotel reception managers, and various technical and sales positions [Oman Observer].

Impact on Businesses and the Economy

The tiered fee approach is expected to lead to increased hiring of Omani nationals, better alignment between private sector growth and national labour priorities, and a more predictable regulatory landscape for foreign labour. Economists anticipate these changes will reduce Oman’s dependency on expatriate labour, particularly in mid-level and supervisory roles.

Potential Challenges and Concerns

While the policy enjoys broad support, concerns have been raised about the potential strain on smaller businesses and the challenges of finding qualified local talent in specialized fields. Calls for targeted training programs and workforce development initiatives have emerged to aid companies adapt.

Looking Ahead

The tiered fee system is being implemented as Oman enters a five-year development plan focused on economic diversification, job growth, and private sector empowerment. Observers anticipate potential expansion of fee incentives or targeted exemptions over time. By linking financial consequences directly to local hire performance, Oman is signaling the importance of prioritizing Omani employment.