Oman is situated on the mouth of the Persian Gulf. It is the third-largest country in the Arabian Peninsula, sharing its border with the UAE, Yemen, and Saudi Arabia. Oman has emerged as a famous tourist spot and attractive investment destination for decades. It is considered as one of the high-income economies by the World Bank. It has become home for foreign investors due to its efficient business initiatives to attract foreign investors to its land. Oman is a major exporter of oil and gas. To diversify its economy, Oman has developed industrialization strategies and openly invites foreign investors to form companies and start a business in Oman. To set up a company in Oman, the investors need to know about the business options available in Oman. Following are the legal business types that can be established to initiate business in Oman.
Limited Liability Company is the type of company where the shareholder’s liability in the company is limited to the extent of shares he holds. To form an LLC in Oman requires two shareholders; out of them, one should be an Omani national or a GCC citizen or the US citizen, holding more than 30% of company shares. There should be one director too. For LLC formation, one needs a minimum of Omani Riyal (OR) 150,000. The foreign investors prefer to set up LLCs in Oman mainly.
In Joint Stock companies, the capital is distributed as a stock. In Oman, the shares of a public joint-stock company are traded publicly. 150,000 OR (Omani Riyal) is the minimum share capital to start such a company. The approval and issuance of a license from the Ministry of Commerce and Industry must incorporate a joint-stock company.
The shares of a private joint-stock company are not traded publicly. To incorporate a private joint-stock company in Oman requires a minimum of three shareholders; out of them, one should be an Omani national holding a minimum of 30% of shares of the total shares and at least 50,000 OR (Omani Riyal) as share capital.
Forming a limited partnership in Oman requires two or more members. There should be one general partner and one limited partner to be registered. The general partner shall be an Omani citizen responsible for all debts and obligations of the partnership without any limitation. The limited partner is liable to the debts and obligations to the extent of his restricted shares in the partnership.
It is such a type of company that holds 51% of shares in one or more joint-stock or a limited liability company. The registration of a holding company is recommended for large investments or a company project.
There are various good opportunities for ex-pats to form a company and start a business in Oman. Oman is a strategically ideal location for setting up a business because it is a gateway to GCC countries. It holds a vast number of natural resources, and its economy is developing so rapidly and is a high-income country to get reasonable outcomes from businesses. The Omani government supports boosting new businesses. One of the best things about setting up a business in Oman is no personal tax is imposed, which is a plus point for the investors. Oman is set to expand its industry and business outside of the oil sector; it has developed non-oil sector businesses to attract investors with new business opportunities. The Omani currency is one of the robust and stable currencies globally and benefits the ex-pats in achieving hefty outcomes. Oman provides free transfer of profits and capital facilities. For the people interested in the heavy machinery business, the import of machinery and other capital for industrial purposes is duty-free. The navigation companies are exempted from tax. Oman is a signatory to the double tax treaties with various countries and saves the investors from paying extra tax. The repatriation of capital invested and profits gained is made easy for the ex-pats. Oman has exempted the mining industry, fishing, farming and breeding sector, tourism and hospitality sectors, export of locally manufactured or processed food, and medical care units operated by private hospitals from paying tax, to reduce the burden of tax of the investors.
Setting up a company in Oman requires various steps to be followed like other GCC countries. Oman provides a physical platform to the business entities’ desire to register a company in Oman. To incorporate a company in Oman following steps are required to be followed; The person intending to set up business in Oman decides on a trading name; first of all, he/she need to decide on a unique trade name for the company and submit an application for approval to the Ministry of Commerce and Industry (MCI). After Approval, an initial deposit needs to be done. The other documents required to be submitted for incorporation of a company in Oman are;
After submitting the documents for the company’s registration, a capital account is required to be opened for deposition of the initial incorporation fees of the company. Moreover, for compliance with the commercial rules and regulations for incorporating a company, registration with the Oman Chamber of Commerce and Industry (OCCI) is required.
The next step is the business registration, and it requires the submission of legalized opening forms, the approval of the municipality, and the certificate of share capital. The company needs to make a company seal containing the company’s name and logo. Once the incorporation process is completed, the new company needs to apply for visas for its employees. Registration with the Ministry of Manpower needs to be done. The registration of company employees under the company name is mandatory to avoid any legal consequences. If there are any legal consequences you have to reach out to the corporate lawyers. It is required to register the company with the Royal Oman Police compulsory for security purposes.
Another step needs to be taken: the conversion of bank account; the business capital account needs to be converted into the current account for the convenience of business transactions of the company. Once all these pre-incorporation and post-incorporation steps are completed, the company operates its business in Oman. The company formation in the Sultanate of Oman requires different licenses to conduct business on its territory without any restriction. Generally, there are four types of licenses required for the operation of the business in Oman, and the licenses are;
Like UAE, Oman also has two separate setups and rules and regulations for companies. There are mainland companies and free zone companies. Both company locations have their own set of rules, and business structures need to be followed while incorporating a company. The mainland companies are also known as onshore companies. Such companies can conduct business inside or outside of the country of origin. The prerequisites to form a company in mainland Oman are that; there should be a minimum of two shareholders, one director of any nationality, and a minimum capital of 150,000 Omani Riyal. Free zones have always been appealing business set-up sites in the GCC due to their enormous benefits and tax exemption policies. There are four free zones in Oman, namely, Al Mazunah free zone, a hub for commercial, service, and industrial sectors, Salalah free zone is an attractive choice due to its low cost in terms of utilities, labor, and infrastructure. Sohar free zone is the fastest-growing seaport in the world. Duqm SEZ, the biggest economic zone divided into eight sub-zones, holds different investment options such as industries, seaport, dry dock, fisheries, tourism sector, etc. The free zones are categorized according to the business sectors they support. The investors need to choose a free zone according to the business they intend to start. To set up a company in free zones needs to follow the below steps:
The Oman free zones provide an excellent potential for the investors and provide investors with opportunities to expand their businesses. There are several benefits of setting up business in the free zone, such as: