Our Corporate Structuring lawyers at Al Tamimi & Company discuss Updates to Investing in Oman’s Education Sector and provide updates on the latest trends
Chelsea Pollard Associate, Corporate Commercial
Arif Mawany Head of Corporate Commercial - Oman, Corporate Commercial
In furtherance of our previous articles on the education sector, the most recent titled Education Investment in Oman, a number of changes have been made to the legislative framework that affects foreign investment into Oman’s education sector. As part of Oman Vision 2040, Oman seeks increased investment into private schools and higher education institutions. We highlighted previously in the August 2017 and August 2016 editions of Law Update that in the education sector in Oman there are three distinctions, namely, public schools, private schools, and higher education institutions. Public and private schools refer to general education schools (kindergarten through twelfth grade) with the former being schools established by the Ministry of Education and the latter being all other schools established in Oman, whether it be a government entity (other than the Ministry of Education) or non-governmental entity. The ”higher education institution” refers to any schooling above twelfth grade and includes universities and colleges. Given that public schools are only established by the Ministry of Education, this article will focus on both private schools and higher education institutions.
The regulatory framework of private schools in Oman is Royal Decree No. 68/1977. Under this Decree, the Ministry of Education has been vested with sole authority to supervise all private schools including their establishment. The Decree also stipulates that the Minister of Education shall issue the relevant regulations, laws and decisions related to establishing private schools. Finally, any violation of this Decree (for example, establishing a private school without the Ministry of Education’s approval) or any regulations, laws and decisions of the Minister of Education shall be subject to a fine of up to OMR 500 or imprisonment for up to three months, which shall be doubled in the event of repeat violations.
In line with its powers prescribed by Royal Decree No. 68/1977, the Minister of Education issued Decision No. 287/2017 concerning the “Organisational Regulations of Private Schools”. The Organisational Regulations of Private Schools regulates foreign investment into private schools, licencing procedures and conditions, obligations of licencees, school building and facilities requirements and specifications, management of private schools and teaching and administrative bodies, educational programs and curriculum, students and parents, student evaluation systems and examinations, security, safety and health, school activities and events, school fees, and violations and penalties.
Under the Organisational Regulations of Private Schools, non-Omanis (foreign investors) are permitted to establish a private school provided that the applicant invests together with an Omani partner. The requirement for an Omani investor does not apply if the applicant is a citizen of one of the GCC states. Whereas, for private universities, the majority of the share capital in the fund must be owned by Omanis and the main objective of the university is not the realisation of profits.
The foreign investor must enter Oman on an investor visa, be of good reputation, not be subject to final judgement for a felony or offence against trust and the investment must comply with Royal Decree No. 50/2019 (the “Foreign Capital Investment Law”). However, it is worth noting that where the Foreign Capital Investment Law and Royal Decree No. 68/1977 conflict, Royal Decree No. 68/1977 would take precedence.
Most foreign investors establish limited liability companies (LLCs) when establishing private schools, which are run and managed by managers, as opposed to higher education institutions, which are run and managed by a board appointed by the council of trustees.
In addition to the investment related to establishing a private school or higher education institution, foreign investors should also keep in mind that any land acquired for the purpose of running and operating must comply with Omani law. One of the key developments in this area is Minister of Housing Decision No. 92/2018, which regulates government land allocated to private higher education institutions. Under this Decision, a private higher education institution may apply for an investment not exceeding 15% of the total area of land allocated for them to exercise the operation of the school. It is worth noting that the facilities and extensions shall be in accordance with the specifications and standards approved by the Ministry of Higher Education and other competent governmental bodies where applicable (for example, the relevant municipality). Most land used for private schools or higher education institutions is obtained either under the usufruct scheme under the Royal Decree 5/1981 (as amended in 2010) or within integrated tourism complexes under Royal Decree Number 12/2006 (as amended in 2010), which are further discussed in our recent article.
Before commencing operation, the requisite licences must be obtained. Under Organisational Regulations of Private Schools, approval must be obtained from the Minister of Education to obtain the relevant licence. As for higher education institutions, the approval would be from the Minister of Higher Education.
Before commencing operation, the requisite licences must be obtained. Under Organisational Regulations of Private Schools, approval must be obtained from the Minister of Education to obtain the relevant licence. As for higher education institutions, the approval would be from the Minister of Higher Education. Additionally, when it comes to establishing higher education courses, the institution must ensure that it meets the relevant equivalence of their academic qualifications, which are defined under Minister of Higher Education Decision No. 21/2015 – higher education certificate, diploma certificate, advanced diploma certificate, ordinary bachelor degree, bachelor degree with honours, post-graduate diploma, master degree, or PhD. The requisite fees for accreditation of higher education institutions are regulated under the Oman Academic Accreditation Authority Decision No. 1/2016 and are determined by the type of institution, i.e., university, university college, or college. Other licenses may be required in the event the school or institution establishes itself as a company or has a foreign investor (then from the Ministry of Commerce, Industry and Investment Promotion and Chamber of Commerce), or intends to invest in land in Oman as discussed above.
The final consideration that needs to be adhered to is ensuring that the hiring of any expatriate employees is consistent with Omani law. It is permissible for private schools and higher education institutions to hire expatriates; however, the regulations stipulated under the Foreign Residency Law (Royal Decree No. 16/1995, as amended in 2021) and the Executive Regulation of the Foreign Residency Law (Royal Omani Police Decision No. 63/1996, as amended in 2021). Namely, the expatriates must have the requisite employee visa, and the relevant fees must be paid. Additionally, the private school and higher education institutions must comply with the relevant Omanisation rates issued every six months by the Ministry of Labour. Certain positions in private higher education institutions are restricted to Omanis under Minister of Manpower Decision No. 20/2021, including professionals related to administrative and financial professions, admission and registration departments, departs and deanships, student and social counselling, and career guidance. It is worth flagging that all employment contracts and policies for both Omanis and expatriates must also be in compliance with the Labour Law (Royal Decree No. 35/2003).
In conclusion, the recent amendments and updated laws and regulations create a comprehensive framework for investing in Oman’s education sector. This is in line with Oman’s Vision 2040, which aims to increase foreign investment in this sector and the recent changes to the Foreign Capital Investment Law, which provides more protections and eases the process for foreign investors. In closing, it is worth noting that the establishment of private training institutions, such is currently restricted to Omani nationals under Minister of Education Decision No. 40/2021 and, therefore, would not fall under the above framework discussed.
For further information, please contact Arif Mawany or Chelsea Pollard.
Published in August 2022
Illustration of Helen Keller
