Business Setup in Oman - Unleash Your Potential and Achieve Success with Us

Entrepreneurs can run their businesses in a hassle-free manner. Being the Arabian Peninsula's third largest country, it is a desirable hub, particularly for trade and logistics in the Middle East.

Over the years, some international trade agreements signed by the government have increased FDI (Foreign Direct Investment) and the opportunities for SMEs (Small and Medium Sized Enterprises). The Sultanate's blueprint is the 'Oman Vision 2040.'

Being implemented in 2021, it will go on till 2040. Tourism, aquaculture, mining, manufacturing, shipping, and logistics are the major pillars of the government's diversification policy.

Business Setup in Oman – Reasons an Entrepreneur Can Consider for a Company Formation

It constantly encourages FDI and provides various incentives. Free zones provide an economic environment that is business-friendly.

The business potential scope is high in many industries like tourism, logistics, fisheries, manufacturing, and mining. Here are some of the benefits of a Company Registration in Oman.

• Emerging and Open Economy

The country's economy is new and diversified. Therefore, the option of emerging new opportunities is there. 

• Free Access without Sanctions

As there are no sanctions in the country, it is advantageous for establishing growing economic relations.

• Political and Economic Stability

The business environment of the Sultanate of Oman is politically and economically stable, which helps investors and entrepreneurs achieve their goals.

• International Presence

International economic organizations are connected to Oman, and the country has memberships in the GAFTA, WTO, and GCC. It also has free trade agreements with Iceland, the United States, Switzerland, Singapore, Norway, etc.

• Tax Exemption

There is no personal income tax in Oman, but they have implemented VAT services because they are one of the GCC members.

• Import Exemptions

Import duty is not levied on raw materials, machinery, and plants for five years from the manufacturing activity commencement.

• Capital and Profit Repatriation

There is no restriction on dividend transfers as well as capital and profit repatriation. 

• Foreign Ownership

Oman allows 100% foreign ownership in many activities. Connect with our experts for more information.

• Diversification

Industrially, Oman is very diversified, so the business activities are facilitated by a robust supply chain.

The Business Climate in Oman

Under the new FCIL (Foreign Capital Investment Law), Oman will allow 100% foreign ownership for numerous activities. However, few of the commercial activities are not permitted to have full foreign ownership.

Some of them are mentioned below:

• Photocopying and Translation
• Automotive and Vehicle Repairs
• Drinking Water Sale
• Salon and Hairdressing Services
• Fishing
• Taxi Services
• Rehabilitation Centers.

A small part of the limited services contributes to Oman's economy, and promising fields will be opened for 100% foreign ownership by the new law. This will draw foreign companies into the country due to the key modernization initiatives taken under the new law.

The new FCIL law does not also prescribe a minimum share capital requirement, which could turn the foreign investment landscape of the country; however, as this is a brand-new regulation, it has to be reconfirmed based on each case by the MOCI (Ministry of Commerce and Industry).

The law does not mandate the requirement for minimum share capital, and this step can prove to be a turning point in terms of FDI for the country. However, this new regulation has to be reconfirmed in each step by the MOCI (Ministry of Commerce and Industry).

 This new law will provide countless opportunities for foreign business owners and investors.

All about the Corporate Entities in Oman

Choosing a corporate entity for doing business in Oman can be categorized according to the business type and requirements. There are various forms of locally incorporated companies: Limited Liability Companies, Proprietorship Companies, Free Zone Companies, Holding Companies, Joint Stock Companies, Limited Partnership Companies, Joint Ventures, General Partnership Companies, etc. 

There are three ways to do business with a foreign entity: Branch Office, Commercial Agency, and Representative Office. 

Limited liability companies are the most common type of corporate entity, and they require a minimum of two and a maximum of forty founding members.

Oman partnership companies have some characteristics, being formed by two or more stakeholders, and they require registration within a month of the cooperation contract being signed. If individual interests are transferred, it requires all partners' approval and should clearly indicate its partnership nature. Any partner disputes can dissolve the partnership unless all others agree to continue. 

The proprietorship business structure is generally restricted to Omani citizens, although other GCC citizens may also be allowed under specific conditions and activities.

Foreign organizations can also start representative offices in Oman. They are allowed to set up a branch office only if a project contract is received by the government, which is valid for the term of the contract.

A joint venture agreement by two or more entities undertaking a particular project forms a joint venture company. It is not registered, has no legal status, and an Omani partner must own at least 51% of the shares.

Documents Required for Company Formation in Oman

Setting Up a Business in Oman requires the following required documents:

• Memorandum and Articles of Association
• Shareholders' Visas and Passports
• Tax Registration Certificate
• Chamber of Commerce and Industry affiliation certificate
• Identity Cards of Shareholders
• Certificate of Initial Deposit
• Filled Company Registration Form

Free Zone Company Formation in Oman

Oman has three free zones: Salalah Free Zone, Sohar Free Zone, and Al Mazunah Free Zone, and two special economic zones, Knowledge Oasis Muscat and Duqm SEZ, that aim to attract foreign investment. 

There are also many industrial parks in Oman, such as Rusayl, Sohar, Raysut, Sur, Nizwa Al Buraimi, Sumail, and Al Mazunah, and they offer attractive land rental rates, certain reductions for machinery & equipment and tax exemptions.