São Paulo – The Sultanate of Oman is optimistic about the possibility of attracting more Brazilian investment, after the success of the project of the mining company Vale at the Port of Sohar and the purchase offer recently made by BRF for 40% of its distributor in the country, Al Khan Foods. This Monday (12nd), representatives from Omani agencies and companies presented business opportunities in the Brazil-Oman Economic Forum, held today at the Grand Hyatt hotel, in São Paulo.
“I think [this event] is precisely the outcome of the first trip of a [Brazilian] authority to the Sultanate of Oman, when I was there last year. It has led to this trade and industry forum, where Omani and Brazilian representatives have met to learn how to invest in Oman, and how Omani businessmen can invest here in Brazil”, said Brazilian vice president, Michel Temer, who took part in the conference.
According to the Omani ambassador in Brasília, Khalid Al Jaradi, the government of his country has a long-term strategy to diversify the economy, since the oil and gas industry accounts for 50% of activity. The areas the Omanis plan on developing include the food industry. They believe they can make Brazilian companies interested in carrying out something similar to what Vale did in the sultanate, in the iron ore business.
The mining company has a pelletizing plant, a seaport and a distribution centre in Oman’s Sohar port area. The place is considered strategic by the company to answer to the Middle Eastern and Indian markets, and there was an investment of US$ 2 billion there. “It is a very favourable environment to foreign investment,” said the External Affairs head of Vale, Marcio Senne.
Interested in the potential presented by the Brazilian grain exports, the director of Port of Rotterdam International (PoRint), which runs the Sohar Port and Freezone, said there are plans of setting up a food distribution hub at the facility. The representative of PoRint in São Paulo, Peter Lugthart, said they are trying to attract more companies from Brazil, besides Vale. “In our opinion, there is space to set up a grain terminal”, he said.
Other activities Oman wishes to develop are steelworks, fishing and aquaculture, agriculture, information and communication technologies, chemistry and petrochemistry, tourism, besides expanding its infrastructure.
“The policy of attracting investments to Oman is bearing great results”, said the Arab Brazilian Chamber of Commerce’s president, Marcelo Sallum. “It is a wonderful country, tourism-wise”, added the CEO of the organization, MIchel Alaby. Both visited the Gulf nation alongside Temer, in 2013. The Arab Brazilian Chamber helped the Omani embassy hold the forum this Monday.
These country believes these areas can offer “competitive advantages”, either in the way of raw material and services availability or for its geographic location, halfway to large consumer markets.
“Our goal is to build partnerships with Brazilian companies,” said the chairman of the Duqm Special Economic Zone Authority and head of the Omani delegation, Yahya Said Abdullah Al Jabri. “We have reasons to hold similar activities (the forum) in the future,” he said. Approximately 160 people were in attendance.
Presentations were given on the ports and free zones of Duqm, Sohar and Salalah. Apart from their infrastructure and location, these facilities offer tax exemption, among other advantages. In Duqm, for instance, the grace period for taxes is 30 years.
Two-way street
Temer stated that Brazil is also interested in being targeted by investment from Oman, and said his country should see an infrastructure sector investment of US$ 150 billion in the next five years. “Bring your companies to invest and to make money,” he said.
One of the Omani companies at the forum invests overseas. The Oman Oil Company is a sort of sovereign fund from the Arab country that operates in energy and related activities. In South America, the company has business interests in Chile. “Brazil is one of the places we look to. If we find anything that fits our portfolio, we will look into it,” said the vice president for Emerging Business vice-president, Hilal Al Kharusi.
To Marcelo Sallum, Temer’s visit to the sultanate in 2013 “gave a positive signal of the [Brazilian government’s] interest in establishing closer ties” with Oman. “And the fact that the vice president has attended this forum was important, since it gave credibility, not to mention that we had the opportunity to see new projects,” he said. The Duqm project, for instance, is new.
Because developing its infrastructure is a priority for the Omani government, Sallum added that construction works in the Arab country could translate into “big opportunities for Brazilian companies.”
Double taxation
One obstacle to the development of closer ties with Oman, and to the internationalization of Brazilian enterprises in general, was discussed by senator Ricardo Ferraço (from the Espírito Santo chapter of party PMDB), chairman of the Senate’s External Relations and National Defence Commission. According to him, the Brazilian legislation regards the sultanate as a “location with more favourable taxation” and a “more favourable tax regime,” i.e. a fiscal haven, which prevents Brazil from negotiating an agreement for preventing double taxation in mutual investment.
“We must review this petty position, this Jurassic bureaucracy,” the senator criticized. He promised to “stress” the issue at the commission he presides, i.e., to place it on the agenda and discuss potential modifications.
Temer asserted that the topic “is being continuously examined by government.” “On several occasions, whenever I take these trips [abroad], I hear these pleas [for anti-double taxation agreements],” he said. “The government has not closed the doors on the matter, the government is examining it in proper fashion, so as not to cause problems for the Federal Revenue here in Brazil, and the Revenue in the other country at hand,” he added.
*Translated by Rodrigo Mendonça & Gabriel Pomerancblum
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