Company Formation Services
Oman is also known as the official sultanate of Oman. It is present within the Arabic Peninsular. As per geographic aspects, this country shares borders with UAE, Saudi Arabia and Yemen. Economic progress and diversification are some of the factors that show this country is developing at a rapid pace. An investor going for the process of company registration in Oman can carry out the incorporation process without having to be present physically. Such process can be carried out within a limited period of time. For this an agent would be appointed for incorporating a company in Oman.
Foreign direct investment is allowed in many sectors. Unlike many Gulf countries, the government has liberalised 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 which can be utilised 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 USA, as there is wide available market for US Nationals. Moreover, there is no form of tariff imposed on trade between Oman and USA.
Hence due to all the above reasons, an investor should go for the process of company registration in Oman.
1. Foreign Direct Investment
Oman has liberalized foreign direct investment since the 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.
2. 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.
3. 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 USA, as there is wide available market for US Nationals. Moreover, there is no form of tariff imposed on trade between Oman and USA.
4. 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.
The following are the eligible business structures for company registration 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 of 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
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 utilise the above structure, if it is for a specific period or a particular project.
- Joint Stock Companies
Such companies are formed with minimum amount of capital. Joint Stock Companies are allowed to offer shares to the public. There must be 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
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
Like 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 which promote the foreign parent company and marketing can be carried out by the representative office.
- Securing the Trade License
Mostly foreign investors going for company registration in Oman would utilise a limited liability company. An LLC has to first secure a trade license from the Ministry of Commerce and Investment (MOCI). The MOCI provides different forms of licenses for carrying out business in Oman. However, depending on the requirements of the applicant, the respective license must be secured.
- Minimum Shareholders
Minimum shareholders must be appointed for a company. For example a Joint Stock company in Oman must have minimum of three shareholders. Similarly the requirements of shareholders must be sufficed for company registration process.
- Minimum Directors
There must be minimum directors appointed for a company. An LLC has to have minimum of one director to carry out operations.
- Name Reservation
The name must be reserved with the MOCI. The name of the LLC must reflect the nature of the activities which are carried out by the LLC. The name must satisfy the requirements of the MOCI. It must not breach any rules related to trademark, copyright or any other intellectual property law in force. The name must not be deceiving to the shareholders and the public.
In Oman foreign investors would usually go for incorporating a Limited Liability company (LLC). Hence the below procedure for company registration in Oman would be for incorporating an LLC. The following procedure must be followed by an applicant 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 a legal meaning in Arabic.
- Certificate of Incorporation
Once the above steps are carried out the applicant would receive a certificate of incorporation.
The following compliances are required for company registration in Oman:
- Corporation Tax
All companies must register with the Ministry of Finance for filing corporate tax. 15% corporate income tax is levied on companies.
- Small Business Tax
SMEs and other forms of businesses need to pay only 3% corporate tax if their authorised share capital does not exceed OMR 50,000. This would also be the case if their gross income does not exceed OMR 100,000.
- LLC Compliance
If there are changes in the LLC, then the same has to be notified to the Ministry of Commerce and Investment.
- Annual General Meeting
Annual General Meeting have to be held once every year.
- Memorandum of Association
- Articles of Association
- Shareholders Information and Visas
- Tax Registration Certificate
- Identity Card of Shareholders
- Certificateof Initial Deposit
- Filed Company RegistrationForm
- Chamber of Commerce and Industry Affiliation Certificate
The main regulatory authority for company registration in Oman is the MOCI.
The minimum capital requirements would depend on the business structure which is utilised 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).
All the legal precedents and legislations 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.
The main law that regulates foreign investment in Oman is the Foreign Capital and Investment Law (Royal Decree No 50/2019).
The liability of shareholders in an LLC is limited to a particular amount of capital contribution.
The main laws that regulate employment and relationships formed from Employment is the Employment Law promulgated by Sultani Decree No 35/2003.