Al Mazunah Free Zone: Oman–Yemen Border Trade Company Setup

Al Mazunah Free Zone is a free zone of about 15 km² on Oman's land border with Yemen, in Dhofar Governorate. It is built for importing, storing and re-exporting goods to Yemen, with some light industry and services. Companies can be 100% foreign-owned, pay no customs duty inside the zone, and can employ Yemeni workers without Omani visas. It suits traders and distributors focused on the Yemeni market. It is not designed for businesses serving Muscat or the Gulf.

What and where is Al Mazunah Free Zone?

Al Mazunah (also spelled Al Mazyunah) is in the Wilayat of Al Mazyunah, in the far southwest of Dhofar Governorate, on the Oman–Yemen border. It opened on 24 November 1999 as Oman's first free zone and received formal free zone status under the Free Zones Law of 2002. OPAZ gives its area as 14.5 km², and later reports describe about 15 million m², including a second phase with new roads, water, fibre and power networks.

Trade through the zone grew from about 33,000 tonnes in 2014 to about 220,000 tonnes by the end of 2023. In mid-2024 there were 185 lease contracts, 102 projects in operation and total investment of about OMR 140 million (Oman Observer, July 2024).

Who manages Al Mazunah Free Zone?

The zone is operated by Madayn, the Public Establishment for Industrial Estates, which has managed it since 2005. Madayn and the zone are supervised by OPAZ, Oman's authority for special economic zones and free zones. Applications, land allocation and usufruct agreements go through the zone administration.

Who is Al Mazunah Free Zone best for?

• Distributors re-exporting food, consumer goods, building materials and electronics to Yemen
• Vehicle traders (the zone handles thousands of vehicles a year)
• Warehousing, cold storage and cross-border transport companies
• Light industry such as food processing, packaging and maintenance workshops

If you mainly serve customers in Oman, the GCC or global shipping routes, Salalah Free Zone or a mainland company is usually more suitable.

What incentives does Al Mazunah offer?

What changed with the 2025 zones law?

Royal Decree 38/2025 replaced the 2002 Free Zones Law. New qualifying enterprises receive a 10-year income tax exemption from the start of operations, extendable for activities with high added value. OPAZ issued the Executive Regulations (Decision 81/2026) in September 2026. Existing tenants keep their previous incentives until those periods expire. The 30-year figure on older material refers to that legacy regime.

Which licence types are available and how do you set up?

Investors usually register a limited liability company or a branch, with a licence for commercial (import, storage, re-export), service (transport, handling) or industrial activity. The steps are:

1. Application. Submit the application with supporting documents and a description of the activity and space needed.
2. Plot allocation. The zone notifies you when a plot, warehouse or commercial unit is allocated.
3. Usufruct agreement. Confirm your interest and sign the usufruct or lease agreement.
4. Registration and licence. Complete company registration and get the activity licence.
5. Customs and labour setup. Register with customs, arrange visas for non-Yemeni expatriate staff, and use the Yemeni workforce rules where relevant.
6. Bank account and operations. Open a corporate account and start trading.

What documents are typically required?

• Application form and short business plan
• Passport copies of shareholders and the manager
• Corporate documents for company shareholders (incorporation certificate, memorandum and articles, board resolution, power of attorney), legalised and translated where needed
• Details of goods, expected volumes and storage needs

How much does it cost to set up in Al Mazunah?

No official fee schedule is published. Land and facility rents are quoted on application. Budget for:

• registration and licence fees;
• Chamber of Commerce membership;
• plot or warehouse rent per m² per year;
• utility connection and service charges;
• visas and labour costs for non-Yemeni expatriates;
• transport between the zone, Salalah and the Yemeni market.

How long does setup take?

Taking an existing warehouse or commercial unit is the fastest route, typically a few weeks once documents are complete. Building on a bare plot takes longer because of design and construction permits.

What are the pros and limitations?

Pros

• The only Omani free zone directly on the Yemen land border
• Unique Yemeni workforce rules and customs data recognition for goods from Yemen
• Vehicles and general goods trade already well established, so customs and logistics routines are proven

Limitations

• Remote location far from Salalah's port and Oman's main cities
• Business depends heavily on Yemen's economic and security situation
• Fewer services and amenities than the larger zones

How does Al Mazunah compare with alternatives?

• Salalah Free Zone: port-based manufacturing and logistics with global shipping access.
• Thumrait Industrial City: a Madayn site in inland Dhofar for factories that mainly sell inside Oman.
• Duqm Special Economic Zone: for large industrial and energy projects.

Compare all options on the Oman free zones hub.

How Oman Register helps

Oman Register helps you decide whether Al Mazunah, Salalah or a mainland entity suits your trade flows. We prepare the application, coordinate with the zone on plot or warehouse allocation, and handle registration, visas and bank account support.