Khazaen Economic City: Land, Factories & Company Setup in Barka

Khazaen Economic City is a planned industrial, logistics and mixed-use city of about 52 km² in Barka, South Al Batinah, about 30 minutes from Muscat International Airport. OPAZ has supervised it since Royal Decree 44/2023, and Asyad's Oman Logistics Company operates it. Investors lease land or ready units to run factories, warehouses and food or pharma plants, and two free zones inside the city offer customs and tax incentives.

What and where is Khazaen Economic City?

Khazaen was first planned as a logistics hub and was relaunched around 2018–2019 as a full "economic city". Industrial areas, logistics, offices, housing and services share one master plan. It sits at the junction of the Muscat Expressway and the Batinah Highway, roughly halfway between Muscat and Sohar.

Who manages it?

• Supervising authority: OPAZ, the Public Authority for Special Economic Zones and Free Zones
• Developer: Khazaen Economic City LLC, described by its management as one of Oman's largest public–private partnerships. 2018 reporting named Omani state investment and the Saudi MASCO group as partners in the master developer.
• Operator: Oman Logistics Company LLC, part of Asyad Group, operates the city and both free zones

Royal Decree 44/2023 also created two free zones inside the city: one for light and medium industry and logistics, and one for business and trade. Our separate Khazaen Free Zone page covers registering in the free-zone areas.

Which sectors are already in Khazaen?

According to figures OPAZ shared in October 2025, cumulative investment in Khazaen passed OMR 800 million. In the first half of 2025 alone, 19 agreements worth about OMR 276.5 million were signed, most of them in manufacturing. OPAZ's 2025 annual results named Khazaen as the zone with the fastest growth in added investment, at about 63%.

The main groups of investors are:

• Manufacturing and packaging: paper products, sanitary materials, plastics, light industry
• Pharmaceuticals: for example the second phase of Opal Biopharma
• Food: Salalah Mills, plus the Khazaen central fruit and vegetable market operated with Silal
• Logistics: an industrial logistics complex, an international logistics centre, and the land port
• Support services: staff housing, offices and a one-stop shop for licensing

This group of businesses matters in practice. Suppliers, packaging, cold chain and logistics firms are already on site.

What incentives apply in Khazaen Economic City?

Since April 2025, zone incentives have come from the Special Economic Zones and Free Zones Law (Royal Decree 38/2025). Its Executive Regulations (OPAZ Resolution 81/2026) followed in September 2026.

• Ownership: up to 100% foreign ownership
• Income tax: 10-year exemption from start of operations for qualifying enterprises, extendable twice for special-nature activities. Banks, insurance, telecoms, contracting and land and sea transport are excluded.
• Customs: exemption for goods used to set up and run the project and for exports. Mainland sales are treated as imports.
• Capital: minimum capital requirements can be waived with approval
• Services: a digital one-stop shop, automatic licence renewal, and on-site government services
• Omanisation: set by activity; OPAZ's FAQ lists up to 35% for Khazaen

Check with the zone whether a given incentive applies only to the free-zone areas or across the whole city. Large multinational groups are also subject to Oman's 15% domestic minimum top-up tax.

How do you set up a business in Khazaen?

1. Prepare a project profile covering activity, land or building size, investment, utilities (power, water, gas) and staffing.
2. Agree the site. Khazaen allocates a plot, warehouse or office and confirms whether it lies in a free zone.
3. Register the company on the Oman Business Platform, usually as an LLC or SPC, and join the Oman Chamber of Commerce and Industry.
4. Sign the usufruct or lease agreement and get building permits for your design.
5. Get the environmental permit for your category. Heavy (Category 1) projects need an ESIA approved by OPAZ.
6. Build or fit out, connect utilities, and get the operating licence.
7. Recruit staff. Arrange labour clearances, visas and Omani hiring.
8. Apply for the tax exemption once you are operating, if you qualify.

For a practical example, read our article on setting up a factory in Khazaen.

Which documents are typically required?

• Shareholder and manager passports (and Omani IDs for any Omani partners)
• Attested parent-company documents for corporate shareholders: registration certificate, articles of association and board resolution
• A project profile or feasibility study, plus layout and technical drawings for factories
• Environmental documentation as required by your category
• A power of attorney for whoever files on your behalf

What does it cost to set up in Khazaen?

Khazaen does not publish official land rates or fee tables. Ask for a written offer and compare these items:

Khazaen has run time-limited offers before, such as the 2020 package of a rent-free first year and 50% off rent in years two and three. That offer has expired, but ask whether a current promotion exists.

How long does it take?

The company and licence can be ready within a few weeks once documents are attested. A factory takes much longer, because design approval, environmental permits and construction usually add several months. Building in a ready warehouse is the fastest route to operations.

Pros and limitations

Pros: close to Muscat and its labour market, highway access in both directions, customs at the land port, two free zones available, and an established base of manufacturing and food businesses.

Limitations: no seaport frontage, no published rate card, and Omanisation targets above those in remote zones. Some regulations for the new free zones are still being rolled out.

How does Khazaen compare with nearby alternatives?

• Muscat International Airport Free Zone suits air cargo, e-commerce and high-value goods rather than factories.
• Sohar Free Zone and Sohar Industrial City suit you if you need a deep-water port and heavy industry.
• Rusayl and Al Suwayq industrial cities (Madayn) are good for production aimed at the local market without free-zone status.

See all options on our free zones hub and in investment opportunities in Oman free zones.

How Oman Register helps

Oman Register prepares your project profile and gets an offer from Khazaen. We check whether your plot falls inside a free zone, register the company, and handle attestation, licences and visas. That gives you real numbers to compare with Sohar, Madayn or the airport free zone before you sign a lease.