Company Registration in Oman
Oman, officially the Sultanate of Oman, is a country on the southeastern coast of the Arabian Peninsula in Western Asia and the oldest independent state in the Arab world.
Oman is a member of the United Nations, the Arab League, the Gulf Cooperation Council, the Non-Aligned Movement, and the Organization of Islamic Cooperation. It has sizeable oil reserves, ranking 25th globally. In 2010, the United Nations Development Program ranked Oman as the most improved nation in the world in terms of development during the preceding 40 years. A significant portion of its economy involves tourism and trading fish, dates, and other agricultural produce. Oman is categorized as a high-income economy and ranks as the 69th most peaceful country in the world according to the Global Peace Index.
Foreign direct investment is allowed in many sectors. Unlike many Gulf countries, the government has liberalized foreign investment in Oman. In most sectors, 100% foreign investment is allowed. This is beneficial for different forms of investors. There is no requirement to appoint a nominee shareholder or a resident of Oman to incorporate a company.
However, due to cultural differences, it is always appropriate to appoint a nominee shareholder who is a local. There is no minimum share capital requirement to form a company in Oman. There are different forms of business structures that can be utilized by an investor. An LLC (Limited Liability Company) in Oman can be easily incorporated with one shareholder and one director.
There is no requirement to have a resident shareholder or a director in Oman. Hence there is flexibility in carrying out business by a foreign shareholder. Foreign investors in Oman can avail different form of benefit which includes interest-free loans and different forms of subsidies. Apart from this, there are tax exemptions for foreign companies.
Oman has entered into various free trade agreements with other countries. One such free trade agreement is with the USA. This is highly beneficial for investors from the USA, as there is a wide available market for US Nationals. Moreover, there is no form of tariff imposed on trade between Oman and the USA.
Business Opportunities in Oman
The Sultanate of Oman is an open ground for business investors to come forward and play their best shot. Few of the business opportunities that are widely preferred in the region include:
- Tech-based business
- Accounting and investment firm
- Real estate
- Commodity stores
- Digital and technology field
- Food and beverage
Benefits of Company Registration in Oman
- Foreign Direct Investment
Oman has liberalized foreign direct investment since 2000. Different sectors allow foreign investment. Unlike many Gulf countries, the government has liberalized foreign investment in Oman. In most sectors, 100% foreign investment is allowed. This is beneficial for different forms of investors. There is no requirement to appoint a nominee shareholder or a resident of Oman to incorporate a company here.
- LLC Formation
An LLC is one of the most utilized business entities in Oman. It is quite straightforward to form this entity, as there is only one director and one shareholder. This form of entity can be formed with ease.
- Free Trade Agreements
Oman has successfully entered into many free trade agreements with other countries. One such free trade agreement to mention is the US-Oman agreement. This is highly beneficial for investors from the USA, as there is a wide available market for US Nationals. Moreover, there is no form of tariff imposed on trade between Oman and the USA.
- No Requirement of Resident Shareholder
There is no requirement to appoint a resident shareholder in Oman. Appointing a foreign shareholder becomes an additional compliance burden for a company in Oman. Hence an investor would not require to carry out the above requirement. Due to all the above benefits, an investor must go for company registration in Oman.
Location
Location will be another factor. Separate cities and regions may have different rules, costs, and availability. Although Oman is a geographically small country, it is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants, and others depending on your needs.
Language
Arabic is the official language used in Oman. English, Baluchi, Urdu, and some Indian dialects are spoken as well as secondary languages. English is generally taught at school from a young age and used widely in the business community, where business is conducted largely in Arabic, English, or both.
Types of Business Entities in Oman
- General Partnership
In this form of entity, there are two or more partners who have unlimited liability. There is no minimum capital required for forming a general partnership.
- Limited Partnership
There are two categories under limited partnership:
• General Partners whose liability to the partnership is jointly and severally liable. This would mean that all the partners are equally liable.
• One or more partners whose liability is limited to a particular amount of capital contribution. This partner’s liability is limited to the amount of capital contribution.
- Limited Liability Company (LLC)
This form of company has between two to fifty individuals. The liability of this form of entity is limited to a particular amount. If this company requires some form of consent, then such consent from the regulatory body must be secured. The following minimum capital is required for forming this type of entity:
• OMR20,000 (for Omanis or GCC nationals); and
• OMR 150,000 (for a mixed shareholding with foreign shareholders).
- Joint Venture
A joint Venture is considered as an agreement between two or more people to form a company for a particular project or purpose. There is no minimum capital required for a joint venture company in Oman. An applicant going for company registration in Oman can utilize the above structure if it is for a specific period or a particular project.
- Joint Stock Companies
Such companies are formed with a minimum amount of capital. Joint Stock Companies are allowed to offer shares to the public. There must be a minimum of three shareholders to form this form of entity. The following minimum capital is required for a Joint Stock company:
• Public Joint Venture Company: OMR2 million;
• Closed Joint Venture Company: OMR500,000; and
• Converted from another form: OMR1 million.
- Holding Company
The holding company would have some form of significant control over the subsidiaries and its sister concerns. More than 51% ownership over the subsidiary companies would be present. A holding company can either be a joint-stock company or a Limited liability company (LLC). The minimum capital requirements of a holding company will be OMR 2 million.
- Branch Office
A branch office is a mere extension of the foreign parent company. Such offices can carry out profit-making activities.
- Representative Office
As a branch office, a representative office is a mere extension of the foreign parent company. The representative office cannot carry out any profit-making activities. Only activities that promote the foreign parent company and marketing can be carried out by the representative office.
Procedure for Company Registration in Oman
- Choosing the activities carried out in the business
First and foremost, the applicant must choose the activities which are carried out by the LLC. If banking and insurance activities are carried out, then the applicant would have to take consent from the Ministry of Commerce and Investment.
- Registering the Company
Before registering the company, the applicant would have to apply to the Ministry of Commerce and Investment for a trade license. Other permits may also be required to be secured by the applicant.
- Submit Documents
The Ministry of Commerce and Investment may take time to get back to the applicant. During this time, the applicant would have to ensure that all the documentation for company registration in Oman (LLC) is in order. Some of the crucial documents would include the memorandum of association and articles of association of the company.
- Reserve Name
Then the applicant has to choose a relevant name for the LLC. The name must reflect the goals and objectives of the business. It also must be provided in Arabic and have legal meaning in Arabic.
- Certificate of Incorporation
Once the above steps are carried out the applicant would receive a certificate of incorporation.
Documents required
- Memorandum of Association
- Articles of Association
- Shareholders Information and Visas
- Tax Registration Certificate
- Identity Card of Shareholders
- Certificate of Initial Deposit
- Filed Company Registration Form
- Chamber of Commerce and Industry Affiliation Certificate
Banking System in Oman
One of the core fronts that every investor should be aware of is the banking process that every business entity must follow.
Opening a corporate bank account helps a business investor gain multiple benefits, right from keeping track of the business expenses to monitor the financial growth.
Frequently Asked Questions
1. What is the main regulatory authority for company registration in Oman?
The main regulatory authority for company registration in Oman is the MOCI.
2. What is the minimum capital required for company registration in Oman?
The minimum capital requirements would depend on the business structure which is utilized by the applicant.
For example, an LLC in Oman would require the following:
- OMR20,000 (for Omanis or GCC nationals);
- OMR 150,000 (for a mixed shareholding with foreign shareholders).
3. What is the form of the legal system followed in Oman?
All the legal precedents and legislation in Oman are derived from common law. The commercial laws in Oman are quite flexible. All forms of business disputes are settled in commercial courts of Oman. Islamic Sharia law is the main source of law in Oman.
4. What is the law that regulates foreign investment in Oman?
The main law that regulates foreign investment in Oman is the Foreign Capital and Investment Law (Royal Decree No 50/2019).
5. What is the liability of shareholders in an LLC?
The liability of shareholders in an LLC is limited to a particular amount of capital contribution.
6. What are the main laws that regulate employment in Oman?
The main law that regulates employment and relationships formed from Employment is the Employment Law promulgated by Sultani Decree No 35/2003.