There is imprisonment for a period not exceeding 2 years and a fine not exceeding OMR 2000, or either of these two sentences, for penalizing infringers in Oman.
The Sultanate of Oman occupies the area on the southeastern coast of the Arabian Peninsula and the Arabian sea. It is one of the strategic business centres that foreign ex-pats have witnessed. Apart from being one of the favourite tourist spots, the ground stands profitable when diversifying business units.
According to the World Bank, Oman is a high-income economy widely used to deal with international businesses.
The government of Oman has understood the benefits of shifting the focus towards the non-oil segments and have been taking numerous strategies to uplift the other divisions to attract a higher FDI in the nation.
Suppose you are a business investor who has been looking for an option to diversify the business or even incorporate a new entity. In that case, Oman is the perfect place that you can count.
In this guide, we will take you through all the essentials required to know before setting up a business in Oman.
The Sultanate has been implementing various strategies to uplift the non-oil segment and grow the FDI. As a result, over the decade, there has been a significant spike in the number of business entities incorporated in the nation.
Being a business investor, it is of utmost importance to have a complete idea of the economic condition of a nation. Therefore, a politically stabilized economy is highly preferred as it can guarantee success and international exposure in the long run.
Having a piece of knowledge on the economy gives the investor an upper hand to know the pros and cons, and then respective measures can be taken accordingly.
Here's a guide on The Rising Economic of Oman that will give you a complete idea of the PESTEL scenario you should know before investing.
Oman is profitable ground for multiple business owners and industries. Although the pandemic harmed almost all the nations, Oman has been taking measures to cope with the same smartly.
Right from a freelancer to a multi-millionaire, every business can find its ultimate destination in Oman. To know more, do have a look at a guide on the Top Business Opportunities in Oman, which is a must-read.
Company structure can be called a skeleton to be decided in the initial stage of company incorporation.
Any business investor needs to select a corporate structure depending on the availability of the capital and the number of shareholders who are ready to invest.
A business owner looking to set up a business in Oman can choose from any of the following structures:
A limited liability company (LLC) is one where each shareholder’s liability is limited to one’s share of the capital. An LLC company in Oman is required to have a minimum of 2 shareholders (at least one of whom must be a citizen of Oman, a Gulf Cooperation Council (GCC) state or the USA, and must own over 30% of the company’s shares) and 1 director. The minimum capital required to start an LLC company in Oman is OR 150,000 (approximately 390,000 USD). An Omani LLC is the most commonly preferred company type by foreigners wanting to set up a business in Oman.
A joint-stock company is one of the capitals of which is distributed as stocks. The shares of a public joint-stock company in Oman can be traded publicly. The minimum share capital required to start such a company is OR 150,000 (about 390,000 USD). A joint-stock company may not be incorporated without the approval of the Ministry of Commerce and Industry and the issuance of a license testifying that.
A joint-stock company the shares of which are not available for trading publicly is a private joint-stock company. A private joint-stock company in Oman requires a minimum of 3 shareholders (one of whom should be an Omani citizen holding at least 30% of the total shares) and a minimum share capital of OR 50,000 (about 130,000 USD).
A limited partnership in Oman can be formed by 2 or more members. It requires at least 1 general partner and 1 limited partner to be registered. The general partner, who must be an Omani national, is liable for the debts and obligations of the partnership without limitation in liability. The limited partner bears limited liability, and is liable for the company’s debts and obligations only to the extent of one’s capital contribution.
A commercial agency in Oman is a company which is assigned to promote or distribute products or services of a foreign entity in the Sultanate. The primary function of such a company is to export goods and services to Oman by a foreign business. In a commercial agency in Oman, the role of a commercial agent can be assigned only to an Omani national registered with the Omani Chamber of Commerce or a local entity having at least 51% local shareholding.
A branch office in Oman can be set up by a foreign company looking to open an establishment in the Sultanate. For forming a branch, a local agent to sponsor Omani visas and licenses is required. The branch is also required to obtain an approval from the Ministry of Commerce and Industry (MOCI). Since a branch is not considered a legal entity separate from its parent company, the latter is liable for its activities and obligations.
A representative office can be started purely for market research or promotion purposes. It is not allowed to carry out commercial or business-related activities. A representative office in Oman is required to have at least 1 appointed individual who is a resident of Oman.
Establishing a company in any foreign land involves huge investments that are to be borne by the shareholders of the business unit.
This might turn out to be difficult for a single or joint proprietorship at the initial stage. To leverage and widened the business opportunities, the Omani government has curated the free zones in Oman that are economical business establishment zones.
To date, there are five free zones in the nation that includes:
Deciding the trade name is one of the crucial stages that are to be cleared, and the name of any business stands as the face of the company. Therefore, one has to deal very careful while choosing the business name.
While registering a company name in Oman, one has to keep a check on the following:
The selected name shouldn't hurt any religious issue
Opening a business unit in Oman involves specific steps that are to be followed. Often a foreigner finds the task a complicated one if one is not well-versed with the legal proceedings that are to be carried out.
The ideal and affordable way that maximum investors use is to seek an expert's help. The core steps involve:
It stands to be of utmost importance to be very clear regarding the business idea that an individual holds. Clarity of the business idea will help perform the task on time and streamline the steps accordingly.
It is recommended to join hands with experts at the initial stage to get in touch with an expert to perform the legal actions.
Deciding a trading name sounds easy, yet there are strategies to be played around. A company name is nothing but the organization's face that the public will know later.
Make sure that the selected company's trade name doesn't sound offensive and hurt religious sentiments.
Submitting the business papers is another vital thing that completes the entire incorporation process. Presenting the definite set of documents and getting the approvals from the relevant authorities helps to gain the appropriate business license.
Every business industry needs to obtain a specific license to carry out the process at ease. A permit stands as a legal document that signifies that the business operations are carried out at ease.
A business entity must register with the tax authorities to comply with the tax proceedings. Therefore, a business owner must have a clear idea of the taxation part as it will help them comply with the audit and accounting processes at ease.
Designing a company seal is of utmost importance for any business entity to comply with the corporate proceedings as it is included in the company's letterhead and other documents.
The steps mentioned are to be followed accordingly, and to know more, here are more about 8 Steps to Start a Foreign Business in Oman
The bank account opening process is another focused area that one can't be overlooked. Every business unit needs to have a corporate bank account that stands distinct from an individual account.
Opening a corporate bank account turns out to be a beneficial move as it can help you to avail the following benefits:
If you hold a business unit in Oman or is looking to set up one, do read our latest blog on A Guide to Corporate Account Opening in Oman
Taxation is another dimension that no business entity can deny. Therefore, be it an individual or a corporate entity, complying with the taxation system is a must.
Oman is also a part of the GCC nations, and thus, the individuals are not subjected to pay tax. On 1st April 2021, the nation has introduced the VAT system like the other nations like Saudi Arabia, United Arab Emirates, Bahrain, etc. The corporate entities are liable to pay a VAT of 5%.
The activities that get covered under the VAT System in Oman include:
The following supplies shall be exempted from the taxable condition and controls determined by the regulations:
A 10% withholding tax gets applied to the following services in Oman:
To know more on the same, look at our guide: Tax Services in Oman that will highlight the essentials that you need to know further.
Currently, there are no separate stamp duties levied in Oman.
Another dimension that a business investor must know is regarding the Intellectual property services that get implied.
Any business has got a set of creations that need to be protected from competitors in the market.
Oman is a member of the World Intellectual Property Organization (WIPO), and thus, complying with the regulations of WIPO turns out to be a mandate.
The need for Intellectual Property Services in Oman has been increasing as the number of business entities has been rapidly spiking in the nation.
The three courts in Oman handle any dispute taking place in the nation:
Onboarding the right talent is one of the considerable skills that every business entity should have. The initial members of a business entity stand as the company's foundation pillars and define the business growth.
After your company has registered, you need to hold an investor visa to visit the nation. Simultaneously, the workforce that you hire needs to be provided with an employment visa.
Here's a guide on the Visa Services in Oman that you need to know more about the same in detail.
Thus, you have seen the core grounds that are to be considered to establish a business unit in Oman. Now, coming to the implementation part, if one is not well-versed with the legal proceedings, the entire process turns out to be challenging.
The ideal and profitable way to deal with the same is to join hands with a certified business consultant who has a piece of complete knowledge on the same. Getting in touch with an expert not only helps you to complete the task on time, but you can also utilize your available time and resources in the best possible way.
We are an experienced team of professionals helping business investors set up their business in the Middle-Eastern countries at ease.
Our expert's team is well-versed with the business setup process in Oman and can help you incorporate your business dream at ease.
With years of industry experience and knowledge, our business investors can help you by providing tailored solutions suiting your business needs in the following areas:
If you are keen on starting your business in Oman, discuss it with our business expert. Contact us today-we'd be glad to assist!