Oman is a country evolving its market for a broad spectrum of businesses. The government of Oman aims to develop its economy through a series of five-year plans under the umbrella framework known as Vision 2020. Investors around the world will benefit from this plan as it will widen their business outreach to Oman and the neighboring countries. There are many ways through which an investor can enter into the Omani market, one of them being through business setup in Oman. If an already established foreign company wants to enter Oman, then they can do so by setting up a branch office in the country.
A branch office is an offshoot of a foreign company. A foreign company that has entered into a contract with the government or the quasi-government entity is entitled to register and operate in Oman as a foreign branch. It is important to note that a branch period is limited to the period of the project which shall be sufficient for its execution in Oman, and accordingly it is not permitted to carry out any other type of work in the private sector.
Features of a Branch Office in Oman
- Provision of 100% foreign ownership
- A branch office is required to have a local agent to sponsor Oman visas and licenses
- Minimum 12% tax is applicable on a foreign branch office
- All the documents of the parent company required to open a branch company must be notarized by the Embassy of Oman
How to Incorporate a Branch Office in Oman?
The activities of a branch must be similar to the activities of its parent company and it is not permitted to carry out any other activity unless approved first by the parent company and registered with the Ministry of Commerce and Industry. The registration remains valid for the duration of the foreign company’s contract performance, subject to the granting of extensions of time. Any such extensions must also be registered in the Commercial register of the Ministry. The procedure to register your branch office in Oman is as follows:
- Register your branch name with the Registrar of Oman
- Draft a Memorandum of Association mentioning all the details of the shareholders
- Submit all the necessary documents along with the Memorandum of Association
- To get the valid license, the Ministry will ask you to submit the bank guarantee of US$39,000, after which you shall be provided with an operational license
- After getting the approval and issuance of license from the Ministry of Commerce and Industry, note that the license is valid only for the duration of the project
- Along with the license, you are required to obtain a permit from Municipality, Royal Police of Oman, Ministry of Manpower, and Industrial/Environmental authority
Documents Required to Incorporate a Branch Office in Oman
- Certificate of Incorporation of the foreign company from the country of incorporation
- Memorandum of Association of the company
- Specimen signature Certificate of the proposed manager or signatory on behalf of the foreign company
- Passport/ID copies of the proposed manager or signatory on behalf of the foreign company
- Undertaking (in the form of a board resolution) from the company’s head office accepting full responsibility for any liabilities incurred by the branch office in Oman
- Power of Attorney, executed in favor of the proposed resident manager of the branch office
- A signed copy of the agreement entered into with the Omani government agency
- A copy of the agency or the sponsorship agreement entered into with the local agent or the sponsor
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