Gulf Regional Legal Environment of Business Essay - 2

Gulf Regional Legal Environment of Business - Essay Example For example, Sadah (2010) has pointed out those countries like Oman lacks in proper legal framework which can not only protect domestic players but also attract foreign investors. Hence, it can be said that providing a stable legal framework to domestic and foreign companies is related to Oman’s growth and prosperity. McConnaughay (2001) has defined law as a structure and combination of principles which provide guidance to companies on how to do business and also takes care of the interest of investors. In Oman, Commercial Companies Law under the Royal Decree No. 4/1974 takes care of most of the business entities such as Joint-stock Companies, Limited Liability Companies (LLC), joint venture between partners etc (Morison Muscat, 2010). However, such an old prescription is not helpful for Oman to solve the entire pertinent and current day business problem. For example, the age old Royal Decree No. 4/1974 is not helpful to guide business operation of commercial companies which m ight or might not have principal operation in Oman. Another important thing is that, in last 20 years, rapid industrialization in Oman has increased interest of foreign investors to invest money in order to expand business in the country (Morison Muscat, 2010). ... Part 2 Research scholars such as Siviglia (1993), Fox (2009) and Christou (2009) have pointed out that, commercial agreement between countries is important facet of international trade policy for government of any country. Careful analysis of the work done by Fox (2009) shows that commercial agreement between Sultanate of Oman and any foreign Country is exposed to both advantages and disadvantages. Commercial agreement between Sultanate of Oman and international countries comes under the Royal Decree No. 102/94- FCIL and foreign capital investment policy (Morison Muscat, 2010). According to the law, foreign companies need to get license from Omani government in order to commence business in the country. Investors of foreign countries are allowed to invest in tourism, construction, infrastructure, technology or own share of Omani company. Commercial agreement between foreign countries and Oman also includes the clause that, foreign investors will be eligible for tax holidays if their service is found to be necessary to economic growth of Oman by the Council of Ministers (Morison Muscat, 2010). There are plenty of advantages associated with signing commercial agreement by Sultanate of Oman with international countries such as, foreign partners will invest additional fund to the Oman economy which will positively impact the gross domestic product growth of Oman, technological partnership between foreign companies and domestic players will ultimately increase the overall technological capacity of the Oman, foreign investors will create job opportunity by investing money in Oman which will significantly improve the labour market condition