The era of
globalization has led to tremendous population cross-over across physical
barriers. The employment and tourism are making people travel from native place
to different parts of the world. In order to be competitive and maintain market
share business hubs across the globe are also attempting to hire and retain the
best talent available worldwide. In today’s scenario, it has become very common
practice to hire people from other countries. However, hiring foreign workers involves
completion of procedural formalities like obtaining visa, work permit from the labor
department of concerned country, no objection certificate, etc. Relevant
information on all these formalities is vital for both the employer and the
employee.
Through this article we
are focusing on the issues related to obtaining employment in the Sultanate of Oman
(“Oman”), which is one of the favorite destinations of foreign workers
as numerous opportunities are available to get employment there. We have specifically
covered the information on the laws to be complied with by both the employer
and employee while obtaining employment in Oman.
1. The
Provision Governing Employment
By virtue of the operations of Omanisation programme
since 1988, the Sultanate of Oman has focused mainly on the employment of
Omanis as part of major workforce. The motive behind this programme is to
provide job security to each Omani citizen and at the same time reduce
dependence on the expatriate workers. The Ministry of Manpower in the Sultanate
of Oman (“Ministry”) has stipulated fixed Omanisation ratio in six areas
of the private sector namely: transport, storage and communications (60%),
finance, insurance and real estate (45%), industry (35%), hotels and
restaurants (30%), wholesale or retail trading (20%) and contracting (15%). Further,
the local sponsor [js2]willing to employ the
expatriate is required to justify the need of hiring the expatriate rather than
an Omani citizen. On account of all this, obtaining the employment in Oman by
an expatriate has become difficult and cumbersome in terms of legal
formalities.
The labor law and
regulations issued by the Ministry focuses and directs the employer to employ
the Omani workers to the maximum possible extent. However, in case the Omani
workforce do not possess the requisite skills to do specialized job or if there
is shortage of available Omani workers for that job, the Omani employer may
employ expatriate worker after obtaining the permit from the Ministry.
2. Expatriate Employment in Oman
2.1 Provisions
Governing Expatriate Employment in Oman
The Royal Decree No.
35/2003 (RD 35/03)[js3] governs the employment
of Omani and expatriate workers in Oman. The purpose of this law is to govern
employer-employee relationship by way of prescribing guidelines so that the
employee is not exploited and is provided with the minimum standards and
conditions of being employed in Oman.
2.2 No
Objection Clearance
The employment of
expatriate workers in Oman is governed by both the labor law as issued vide
Royal Decree No. 35/2003 and the Foreigners Residence Law issued vide Royal
Decree No. 61/95 (RD (61/95)). While labor law governs the provisions related
to the conditions for obtaining the employment in Oman and at the same time the
Foreign Residence Law regulates the entry into and exit from Oman.
The first and the
foremost requirement for being employed in Oman is to obtain a No Objection
Clearance (NOC), which states that neither Oman nor the employer sponsoring the
visa has any objection with the applicant’s entry into the country. After
obtaining the NOC, Labor Clearance Certificate (LCC) needs to be obtained from
the Ministry. The sponsor, on behalf of the expatriate worker, shall file
request for obtaining the LCC since the expatriate shall not be allowed to join
work in Oman, if he does not possess the LCC.
The LCC is issued
subject to the fulfillment of the following conditions:
·
That the expatriate worker has the professional competence or technical
skill or qualifications as needed by the country;
·
That the sponsor has obtained the permit from the Ministry to bring such
expatriate worker into the country;
·
That the expatriate worker has entered into the country in a lawful
manner in accordance with Foreigners Residence Law;
·
That the expatriate worker is medically fit and free of such contagious
and chronic diseases as may be specified by the Ministry of Health;
·
That the expatriate worker has entered into contract with such employer
who has obtained necessary permit from the Ministry of Commerce & Industry,
if the worker is required to work in the establishment.
·
That the prescribed fee for grant of labor permit has been paid in full.
After the LCC is granted, the expatriate worker is
legally allowed to enter the country for employment purposes along with the
family members. The expatriate shall be required to comply with the provisions
of the Foreigners Residence Law in order to be lawfully present in Oman. Any
person not holding the Omani nationality is considered a foreigner under the Foreigner
Residence Law.
The expatriate worker
and their family member can obtain entry in Oman only if they have valid
passport or travel document issued by the competent authority in their country
along with the valid visa issued by the Oman’s Directorate General of passport
and residence or from any Omani embassy or consulate abroad. The Foreigners
Residence Law also stipulates that the travel document must state that the
holder is permitted to return to the country where it is issued. The entry and
exit of foreigners shall be made at the border points as specified by the
Inspector General of Police and Customs decisions. After arrival into the
country, the foreigner shall be required to go to the Royal Oman Police for the
fingerprints. Thereafter, the Public Relations Officer shall complete all the
procedural formalities in relation to determining the work period in Oman. Generally, the period of work permit
for expatriate workers is two years.
2.3 Compliance
by a Local Sponsor for Employment of an
Expatriate
The employer, also referred
to as local sponsor, shall apply for grant of employment visa for the
expatriate worker. The employer shall be fully responsible for the expatriate
coming to Oman for employment and shall satisfy the following conditions:
· The sponsor must be competent legal person who is responsible for the
accuracy of the data entered into the application form.
·
The sponsor must provide justification for non-availability of Omani
workforce to do specialized job.
·
The sponsor has complied with the prescribed percentages of Omanisation.
·
The sponsor has paid prescribed fees.
The sponsor shall be
fully responsible for the accuracy of the information mentioned in the
application form (for grant of employment visa) including but not limited to
the following:
·
The expatriate worker shall not be less than 21 years old and not more
than 60 years old.
·
The occupation must be similar to the one as stated in the labor permit.
·
The expatriate worker shall be of the same sex as stated in the labor
permit.
The sponsor can file
the application form online by visiting on the following website, www.rop.gov.om along with the following attachments:
· Specified visa
application for, typewritten, stamped and endorsed by the sponsor.
· Copy of the applicant
passport which shall be valid for a period of not less than six months;
· Two 4x6 cm size
photographs.
· Original labor permit
issued by the Ministry and copy thereof with each application form.
· In case the application
is presented by person other than the sponsor, the representative who must be
Omani citizen holding written authorization from the sponsor. The sponsor can
file request with the Directorate General of Passport & Residence for
authenticating such authorization.
· Copy of medical fitness
certificate as specified by the Ministry of Health for citizens of specific
countries. Ministry of Health has specified for the medical fitness certificate
for the citizens of India, Pakistan, Philippines, Bangladesh, Indonesia, Sri
Lanka, Egypt, Syria, Sudan and Ethiopia and
· Copy of the approval of
the concerned authority for specific professions such as Educational
professions, Religious professions, Media professions, Medical professions etc.
The employment visa (with
multiple entries) shall be granted by the Ministry upon the satisfaction of
above mentioned conditions, which shall be valid for a period of three months
from the date of issuance and application for extension of employment visa can
be filed. The sponsor can also file simultaneously the family joining visa for
spouse and children under twenty one years of age and/or family residence visa
for elderly parents, brothers and sisters to accompany the main applicant.
3. MoU on
Manpower between the Republic of India and the Sultanate of Oman
India and Oman have
entered into a memorandum of understanding in the field of manpower to
facilitate the employment of Indian manpower to Oman depending upon the
employment opportunities for Indian workforce in Oman. The employment and the entry in Oman
shall be regulated in accordance with the requirements of labor law, rules and
procedures as prescribed in this article.
4. Taxability
of Income earned in Oman
At present, no tax is
levied on the personal income of the residents in Oman. There is no such requirement
for any deduction from the salary unless some arrangement exists between the
company and the employee. As long as the nature of transaction is personal, no
personal income tax, capital gains tax, inheritance tax, property tax and
wealth tax is imposed. This type of tax situation in Oman and other gulf
countries has made it attractive for the expatriate workers to be employed in
Oman as the share of income earned will be comparatively larger than the income
earned in their country of origin and thereby more income in their hands.
However, Oman has entered into tax treaties with various countries including
India for the taxability of the income in either of the country to the tax
treaty. India and Oman has entered into a Double Taxation Avoidance Agreements
(DTAA), thereby leading to the taxation of income in India even if it is not
taxable in Oman.
Conclusion
To conclude, obtaining
employment in Oman is one of the favorite destinations among foreign workers
due to the fact that Oman has good living standards and better take-home-pay
for a foreign worker. Not only this, Oman has acted as top work destination by
way of career advancement, financial compensation, cultural experience.
Dimpy
Gulati, Partner and Financial Consultant of Legal Imperials is author of this
article. She is an expert on financial matters and writes regularly for a
reputed magazine Diplomatist and Peoples and Management. Legal Imperials has recently authored a book on
One Person Company.
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