Business Setup in Oman : Oman, has been a favourite choice for investment by international investors for a long time now. It is unique in that it shares borders with 5 other countries, namely, Yemen, Iran, Saudi Arabia, Pakistan, and the UAE. It is an Arab country and its capital is Muscat. Geographically, it falls to the south-east end of the Arabian Peninsula. Its present population is around 4.7 billion. The regime in Oman is a monarchy and quite open to promotion of business and commerce for the development of the country. The World Bank has ranked it 71st in the Ease of Doing Business in 2018.The country’s economy has been growing year on year. By 2040, we can expect Oman’s economy to grow by around 10%. Are you interested to set up your business in Oman? If that is so, then you have come to the correct place. Here we share with your information on the many advantages of Oman as a hub of investment. Take a look at just some of the points given below and any doubts remaining in your mind will surely vanish.

The Ninth Five-Year Development Plan (2016-2020)

Vision 2020 aims at building a strong economy for the future by promoting business incorporation, developing human resource, diversification of the economy and accelerating privatisation. So, the Ninth Five Year plan (2016-2020) gives a lot of importance to the completion of projects set up through Public Private Partnerships.

Entrepreneurship & Start-Ups

International initiatives in dialogue, networking and trade agreements have expanded the potential for foreign investments in Oman. This helps even small and medium industries, start-ups in Oman to benefit from it. The government of Oman aims to build a smart-city that will support the entrepreneurs. The country has also taken initiative to educate and skill professional in the energy sector by starting the first ever oil and gas institute in Oman. Many more such forward thinking ideas expected to be implemented.

Company Formation & Ownership in Oman

There are 3 major options for company formation in Oman as per Omani Law: Open Joint Stock Company, Closed Joint Stock Company and Limited Liability Company (LLC). From among the three options these, an LLC is the most preferred type of company formed in Oman. Here, the ownership of a foreign investor is 70%, and in certain special cases, it can be extended further, even to 100%.

No Personal Tax

Oman comes as a tax-free zone. That’s right, one doesn't need to pay multiple taxes like income tax on one’s business profits or any individual income tax. There is only, a flat 15% corporate tax to be paid for companies. Goods movement across the Gulf Cooperation Council (GCC) is free from customs duties. The taxation system has definitely been an incentive that attracts investment opportunities in Omani market.

Vision 2040

The oil and gas industry is said to be the backbone of Omani economy. So, this sector is quite well developed., Many initiatives have been proposed to develop the other sectors like infrastructure, tourism, technology, hotel, transport, manufacturing, mining and perfume industry. Also, Muscat could serve as a bridge for trade between Asia and Africa. This initiative foresees– Oman’s vision 2040 forecasts an increase of 31 billion riyals by 2040 leading to substantial growth.

Exporting Non-Oil Products

As per reports from Oman’s business news , there is an upsurge of 28% in exports from Oman in 2017-2018. Expanding the export of non-oil products is a priority for the Omani government. This creates a huge opportunity for sectors like fishing, manufacturing, pharmaceutical, mineral mining, etc.

Multisector Projects Started

The country is working towards the completion of various projects in different sectors for the expansion of the economy. Salalah LPG Project, Mina Sultan Qaboos Waterfront Project, and Extension of Muscat International Airport are ongoing projects, to name a few. These projects are expected to act as a catalyst to the development of Oman’s economy that is growing by leaps and bounds.

Multiple Advantages

Whether it is infrastructure, connectivity, security of life, property rights, or international network, the steps initiated by the Ministry of Foreign Affairs and Commerce in Oman have created a favourable environment for entrepreneurs interested in investment opportunities, to implement their business plans, and successfully move towards economic empowerment. Hence, one can see that Oman is a suitable destination to set up a new business. The government supports investors and encourages them to invest in national as well as international projects, thereby offering a chance to be a valuable contributor in global economy. Business Setup Worldwide is a platform that can facilitate in establish your business in Oman. Our business support services include company registration, accounting, bookkeeping, tax advisory and intellectual property protection. For more details, do contact us. We would be happy help you set up establishment and be a part of your success story. You will also be interested on:

• Salalah Free Zone Oman
• Oman Special Economic Zone of Duqm
• Oman Mainland Company Formation
• Company Formation in Oman
• Business Setup Service in Oman

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The UAE government in April 2019 had introduced Economic Substance Rules. Companies, both free zone and onshore based ones carrying out relevant activities and registered within the country are active and investing in the country are to abide by the new laws. Rules had been introduced besides international scrutiny with regards to non-domiciled directors who were using business environment of UAE merely for tax purposes. But not every business is impacted by the rules. Rather, it is limited to those in the intellectual property, distribution, shipping & holding and finance companies and company headquarters. Check out what is stated by the rules and how it might affect your business.

Management structure

How the UAE company is owned and managed is considered critical while determining if changes are to be introduced. Companies essential fall under such rules do require someone to run the business, who should be an UAE resident. He/she is to be C-level executive, either senior management member or managing director. Regular meetings are to be held in UAE and as evidence written minutes’ are to be used and signed by directors. It is stated clearly within the registration. For UAE entrepreneurs, what it means? In case, the managing director of your company and yourself are based overseas, then appropriate action needs to be taken quickly. If there are no seniors residing in the UAE, then it becomes essential to appoint a senior manager here. Otherwise, there is risk of non-compliance (details provided below).

Income generation

It is necessary for affected businesses to ensure generation of company income is done in the UAE. This basically means, work performed, irrespective of client based needs to be completed by the business having physical presence in the UAE. Besides this, companies are also to ensure incurring of sizeable operating expenses in the UAE. For UAE entrepreneurs, what does this exactly mean? Main issue on surface is this: in case, if there is business registered here, then there is to be a working office, contributing actively towards the local economy via purchasing activities. For majority of the companies having office in any country, it is considered to be a fair standard expectation. There is not likely to be any issue, if the business is run in a manner to reflect day to day operations honestly.

Office space & staffing

Organizations operating in above mentioned sectors, according to Economic Substance Rules, are to prove having specific employees working in UAE office. Besides this, there also needs to be adequate office space, so as to accommodate these employees. According to another rule, companies are to own sufficient physical assets within the UAE. It can be contingent on business operations and hence, revenue. For UAE entrepreneurs, what does this exactly mean? When right company setup is concerned, there is essential a physical office address. Smaller businesses lying outside Economic Substance Rules may rent out P.O. Box address for business operation purpose in the UAE. But there will be required permanent address for affected companies. Getting qualified staff is easy in the UAE. There are people coming from across the globe to take full advantage of the tax-free status enjoyed in the nation, combined with favourable climate and high living standards. So, finding business management, operations, skilled finance, etc. is never a problem.

Reporting responsibilities

Affected companies are to provide declaration with the concerned authorities to comply with newly introduced rules stating relevant activities established by UAE government pertaining to original trade license. Failing to do so will result in facing penalties to about AED 50,000 including repeat offences that may incur much more harsh financial penalties, along with withdrawal or suspension of trade license of the non-compliant company. For UAE entrepreneurs, what does this exactly mean? How you operate the business is likely to be scrutinized in some manner, if Economic Substance Rules affect your company. But nature of requested information like details involving revenue, profits, registered address, number of employees is likely to be not much complex when compared to anything deemed essential by the licensing or tax authority anywhere across the globe.

Yet in litmus test phase

For Economic Substance Rules in the UAE, it is still year one. Hence, how effectively the regulations are to be upheld is to be seen in the near future. As commitment is made by the government for addressing concerns pertaining to shifting profits, similar to other recognized ‘offshore tax havens’ to prevent EU’s tax blacklisting, transparency is stated to be the only major issue faced here. If you are eager to set any type of business here within the UAE, then it is essential to understand in full the regulations and rules to be adhered to pertaining to the company type desired to be incorporated. There is plenty of advice readily available and it will be worth to discuss with an expert to know the obligations, if any present, behind opportunities planned to pursue. For UAE entrepreneurs, what does this exactly mean? Despite such regulatory developments taking place, if you plan to start any new business or relocate the existing one here, then you can enjoy tax-free corporate environment benefits among the world’s most preferred lifestyle and business destinations. With all things being taken into consideration, red tape (minimal) essential for setup here is likely to be worth the try. Business owners interested to work, live as well as invest legitimately in the UAE do not have to worry much.

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