Wholly Foreign Owned LLC
Wholly Foreign Owned LLC
In the new Foreign Capital Investment Law (FCIL) by Royal Decree No: 50/2019, Oman’s Ministry of Commerce and Industry (MOCI) has brought an addition effective from 2nd January 2020, which aims to make Oman an attractive investment environment. The introduction of this law comes as a move to ensure the stability of foreign investment in the country. The new Law has several incentives and advantages for foreign investments to encourage business flow and stability in the Sultanate, as they have an impact on economic development.
Eligibility for full foreign ownership
Foreign citizens, companies and investors in Oman can own 100% of their businesses in many industries in mainland Oman except some activities in the mainland which are still reserved for Omanis, and others still require a local Omani partner with a minority shareholding.
There are number of Oman Free zone areas as well – see our pages on Oman Free zones for further information.
The list of activities reserved for Omanis include around 40 activities in different sectors – such as manpower recruitment, translation services and tailoring to name a few. The current list may be amended by the executive regulations that are expected to be out by 30 July 2020.
All types of Consultancy activities will still require a Local Omani shareholder and these requirements remain the same – a foreign company or investor can only set up a consultancy office in a partnership with an Omani company or individual. The Omani partner is required to hold a minimum of 35% of the shares in the new company. The minimum share capital requirement – OMR 150,000 is not required to be deposited, however part of this amount has to be available as a proof of funds.Required documents: For Individual shareholders
For Corporate shareholders
The Company’s incorporation documents – Certificate of Incorporation / Trade Licence, Memorandum of Association, Certificate of Incumbency or equivalent and a Board Resolution & Power of Attorney to incorporate the company in Oman. These documents will need to be Notarized, Legalized and Attested from the country of origin and sent to PPG in Oman for Legal Translation and stamping in Country.Business Plan – this is new requirement by MOCI – the Business plan is in 3 sections
- Project description
- Investment costs
- Date to start project
- Proposed Company Name
- Shareholding structure with nationality and % holdings – individual or corporate shareholders
- The proposed Company Grade – The Company Grade is on a scale from 4 – 1 (with an ‘excellent grade’ above grade 1) Share Capital requirements for Grade 4 is OMR 20,000, going up to OR 150,000 for Grade 1, and OR 250,000 for excellent grade. Note that Share Capital is no longer required to be deposited prior to opening the company. The Grade of company will directly affect the Omanisation requirements and the activity types that the company can obtain.
- The confirmation of the Financial Year of the company
- The proposed activities of the company
- The authorized signatures and manager of the company with level of control in the business from admin to full manager
- The form is signed and authorized by the shareholders
Step1. Prepare the documents, send the originals to PRO Partner Group PPG in Oman (see below document requirements)
Step 2. Commercial Registration (CR) with MOCI – trade name and initial approval, Business Plan and CR Application form
Step 3. Chamber of Commerce (CC) Registration – Completed CR required
Step 4. Office/Warehouse Lease Arrangement.
Step 5. Municipality License Application – Completed CR required + Lease Agreement. At this stage the Company is fully registered.
Step 6. Ministry of Finance (MOF) registration mandatory registrations with MOF for the tax department and annual audit requirements
Step 7. Ministry of Manpower (MOM) – mandatory requirement and essential if the company wishes to apply for labor quota and to obtain staff visas.
Step 8. PRO registration on the CR – the company is required to have a PRO named on the CR to be able to apply for visas with Royal Oman Police (ROP). This must be an individually named Omani PRO. Note that PPG can act as your registered PRO in this regard to assist.
Step 9. Any additional External Approvals depending on the company’s activities – for example Oman Customs registration for trading of goods and import of goods.
- Overall Government Registration Fee have increased recently in January 2020 – the new fees are OMR 3500, covering MOCI, CC, MOF & MOM
- Municipality Licence cost based is based on the lease value and the activities of the company
- Oman Customs Government registration fee is OR 20