Oman is one of the most dynamic nations in the Middle East. It has accomplished surprising development in all the areas of the economy. The government is also encouraging foreign capital for the enhancement of the overall development of the country. One of the ways through which an investor can enter into the growing markets of Oman is by setting up a company in Oman. The country offers various entities through which a business can be formed.
Joint Stock Company is one of the largest forms of the entity in Oman. There are two main types of Joint Stock Companies. They are:
1. Public Joint Stock Company
It is also called SAOG and it offers its shares to the public and is listed on the Muscat Securities Market.
2. Closed Joint Stock Company
It is also called as SAOC which does not offer its shares to the public, and is required to have a minimum of three shareholders.
Features of a Joint Stock Company in Oman
- A SOAC requires to have a minimum of 3 shareholders and a capital of RO 150,000
- The SOAG requires to have a minimum of 5 directors and maximum 12 in the company and the SOAC must have a minimum of 3 directors and maximum 12 for their company
- The capital requirement for SOAG is RO 2 million and the founders are required to subscribe for between 30 and 60% of the capital
- The liability of each shareholder is only limited to the capital they have invested
How to Set Up a Joint Stock Company in Oman?
The process for establishing an SAOC or SAOG is similar to that of an LLC, but is longer and more document-intensive, especially for a SAOG. The foreign company must first apply for name reservation to the Commercial Registrar of the MCI. The next steps are as follows:
- An application must be submitted to the Director General of Commerce at the MOCI for issuance of an Administrative Decision with a set of documents
- After submitting the complete package with the required fees, the Director General of Commerce at the MOCI has 30 days to determine whether to approve the company’s formation. If approved, an Administrative Decision for registration of the company is issued
- The Director, during the course of time, may ask you to amend the proposed MOA or AOA and may request additional copies of all submitted documents
- Once an Administrative Decision approving the formation of the company is issued, the company’s founding members have 30 days to convene a Constitutive General Meeting (CGM)
- In the meeting, the member must prove all the actions taken by the founder prior to the registration date of the company like ratification of any agreements entered into on behalf of the company and approval of all pre-formation expenses incurred for the registration and formation of the company
- The CGM is additionally required to elect the members of the initial board of directors and to appoint its first auditors
- Lastly, the CGM should ensure, and declare, that all formalities and conditions for the formation of the company have been met
- The company must simultaneously fill the application form for commercial registration in Arabic and sign the same from the authorized signatories
- For a SAOG, a further complexity is the requirement of undertaking an initial public offering
Documents Required to Set Up a Joint Stock Company in Oman
- Covering letter in Arabic
- Final constitutive contract and Articles of Association
- Foreign shareholder documents (similar to those documents required for an LLC)
- Omani shareholder documents (similar to those documents required for an LLC)
- A bank certificate issued by a bank in Oman confirming that each of the founder shareholders has deposited their capital contributions with the bank in the name of the to-be-formed company
- Copies of identification documents of the founder shareholders, if natural persons
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