Company registration in Oman

Oman is a jurisdiction with a suitable location within the Arabian Peninsula. Its economy is considered to be middle-income with a strong dependence on natural resources, oil in particular. Still, the local government encourages the development of other sectors focusing on industrialization, diversification of the economy, and privatization. Speaking about diversification, such sectors as manufacturing, transport, tourism, logistics, fisheries, and mining are emphasized. The country is also open to foreign investors to enter local markets. Particularly, foreign investments are encouraged in such sectors as infrastructure, oil and gas, real estate, and tourism. If you are among interested investors who wish to realize their projects in Muscat or any other city in Oman, these benefits may start to be available to you.

Advantages of the Jurisdiction

If you intend to incorporate a company in Oman, the following advantages may become available to you after the completion of the incorporation process:

• strategic location of the jurisdiction
• stable economical and political situation
• liberalized legislation suitable for foreign direct investments
• easy process of a company incorporation
• lots of available free trade agreements
• safety of owning assets and doing business
• developed infrastructure
• availability of exemptions in certain sectors.

Major Forms of Legal and Business Presence

If you wish to start business operation from Oman, this may be arranged by using one of the following registration forms:

• Limited Liability Company – a body corporate that can be established by two persons at least whose liability is limited up to the amounts contributed to such an entity. The maximum number of shareholders, in this case, should be 50. If an entity has a foreign shareholder, its chartered capital should be at least OMR 150,000. This is the simplest corporate form of doing business in Oman. The management of this entity is vested after one or more shareholders of this company.
• One-person Company - an entity that may be established by one legal or natural person. The liability of a sole shareholder is restricted to the amount of one’s share. This person is also a manager of this company at the same time.
• Joint-stock Company – a company where a chartered capital is divided into shares that may be freely offered to the general public. Three or more natural or legal persons may establish this company in one of these forms: (i) closed joint-stock company that applies restrictions on the transfers of shares and requires chartered capital in the amount of OMR 500,000, and (ii) open joint-stock company whose shares may be freely offered and transferred to this parties while its chartered capital should be at least OMR 2,000,000. The liability of shareholders is restricted to the amounts contributed only.
• General Partnership – a form of joint doing business by two or a higher number of partners (natural persons) who are entirely liable for the results of the business operation. Their property also may be called to cover potential losses. All partners are treated as managers of this partnership.
• Limited Partnership – a company where can be two kinds of partners: (i) one or more general partners who are entirely liable for the outcomes of this partnership operation and manage this common business activity and (ii) one or more limited partners who are not liable in excess of their contributions made to such an enterprise; they may not be involved in the completion of managerial tasks but they are allowed to inspect books and records of this company.
• Joint Venture – a contractual form of doing business between two or more natural or legal persons. A joint venture doesn't have any legal personality. All conditions of cooperation between business partners are defined in a contract signed by them.
• Commercial Branch – an option suitable for non-resident companies that have contracts or are otherwise engaged in business activities with business partners in Oman. Registration is required here as in the case with companies. A non-resident mother company will remain in charge of the results that a local branch shows in full.
• Representative Office – this option is available to non-resident companies who intend to conduct promotional or market investigating activities. Still, it is not allowed for a representative office to do commercial business.

Registration Requirements and Steps

If you wish to create a company in Oman, the process may require passing the following registration stages:

1. Defining your commercial priorities you intend to realize through a local legal entity.
2. Choosing and approving a business name for a future legal entity by submitting an application to the Ministry of Commerce and Industry.
3. Collecting details about the entity's founders, beneficiaries, and officials.
4. Arranging a registered business address for a future company.
5. Paying up the initial amount of chartered capital in full.
6. Drafting statutory documents and registration forms.
7. Submitting the set of required documents to the registrar.
8. Registration for tax and social security purposes.
9. Applying for and getting licenses and special permits that are required for certain types of regulated activities.

Each registration case may vary depending on the background of the business case. If you need more precise consultation on the matter, contact Prifinance specialists without hesitation.

Legal and Regulatory Framework

Oman is open to foreign investments but it prioritizes the interest of local residents. Entering local markets may be problematic in some sectors in view of lots of bureaucratic formalities that have to be observed. In order to start a business in this country, it is necessary to be aware of all local customs that may vary from region to region. Principal legal acts in the area of doing business are the Foreign Capital Investment Law and the Commercial Companies Law. Major state authorities foreign investors should deal with while starting and doing their business locally are the Ministry of Commerce and Industry, the Ministry of Finance, the Public Authority for Social Insurance, and the Capital Market Authority.

Tax System of Oman

An option of company registration in Oman should be considered along with the next tax highlights that characterize this jurisdiction:

• Corporate income tax rate – 15%
• Personal income tax – not applicable
• Value-added tax rate – 5%
• Withholding tax rates – (i) dividends – 0% (ii) interests – 0% (iii) royalties – 10%
• Capital gains tax rates – (i) corporate – gains are included in ordinary income taxed at a basic rate, only gains from the operations with securities listed on the Muscat Securities Market are exempted from this form of taxation (ii) personal – not applicable.

How Prifinance Lawyers May Help You

If your current business goal is to set up a company in Oman or your branch, Prifinance lawyers are ready to assist you and realize it practically by developing a personalized registration roadmap and supporting the next operation of a newly-formed entity. Lawyers who have successfully finished more than 11,000 projects associated with the registration of companies worldwide are ready to apply this experience so your business could enjoy the benefits offered in Oman for business effectively.