Setup Business in Oman with 100% foreign ownership: Under Foreign Capital Investment Law that has been introduced recently on 7th January, 2020, Oman companies can now enjoy 100% foreign ownership, except few services and trades in the Sultanate. There are about 37 commercial activities that have been prohibited for 100% foreign ownership. It includes transportation, photocopying & translation services, laundry, tailoring, automotive and vehicle repairs, selling of drinking water, recruitment & manpower services, salon & hairdressing services, fishing, taxi operation, rehab homes for orphans, disabled and the elderly. This blacklisted area only share a small part of the Omani Sultanate economy. A legal expert based in Muscat is of the opinion that the new law introduced by the Royal Decree 50/2019 (FCIL), new sectors are promised for 100% foreign investments.
Addleshaw Goddard Oman, Corporate Law specialists and Head of Corporate Oliver Stevens (Pictured) said, “Significant steps have been taken by the MOCI (Commerce & Industry Ministry) to modernize the new FCIL, so as to facilitate smooth, investment friendly regulatory authority in Oman. We are informed that the law allows all companies that are established in Oman with 100% foreign ownership, besides those practicing activities mentioned within the recently circulated ‘blacklist’.
He further added, “The blacklist specifies 37 activities not including segments which previously were stringent in Oman ownership requirements like restaurants, gas, oil and defence.
Emphasizing upon the significance of the new statute towards fulfilling Oman’s ambitions to boost foreign investment inflow, he noted that Oman market on introduction of the FCIL will only be placed in a much stronger position. Now, foreign investors are welcomed openly and there is a robust regulatory framework to conduct business.” He also pointed out that minimum share capital is not stipulated by the FCIL. “In what is believed to be a significant impact upon Oman’s foreign investment landscape, previous practices needing companies having 1+ foreign shareholders to own RO 150,000 (approx. $390,000) minimum starting share capital has been relaxed. It is essential to note that registration fees for such companies are higher at the Ministry than what they were previously and begins at RO 3,000 (approx. $7,800), subjected to increase, which again depends upon the new company’s proposed share capital.
Stevens further added, “As Executive Regulations get issued later this year, further clarity can be had pertaining to the specific provisions made in the new law.”
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The well-established infrastructure, high security, commercial connectivity, international networking stages and property rights promoted by the Oman Foreign Ministry provide a favorable environment for entrepreneurs to seize investment opportunities and transform business ideas. Start up in Oman has turned out to be a good opportunity. There are numerous reasons to start a business in Oman, some are listed below:
- No personal tax
- Strategic Business Location
- Emerging Business in the Non-Oil Sector
- Rapid development economy
- Government support for new business
- Availability of natural resources
Process to Start a Business in Oman
Those who want to start a business in Oman should consider the below mentioned consideration. Just follow the below points to easily start a business in Oman.- You must have atleast 2 stakeholders
- A registered office address along with one director
- Minimum OMR 15,000 required for startup
What is the Process of Registering a Business
Company configuration is the process by which a physical platform is provided for a business entity. There are certain steps you must follow to start the process. After deciding to set up a business in Oman, the following are the steps involved in establishing a corporation and establishing a corporation.Documentation
This is the first step where all necessary documentation must be submitted to start the integration process. Here is the list of required documents:- Memorandum and Association Articles
- Certificate of Visa and Passport Tax Registration for Shareholders
- Shareholder ID
- First Deposit Certificate Company Registration Form
- Chamber of Commerce and Industry Affiliation Certificate
Open a capital account
Once the documents are submitted, it is necessary to open a capital account to deposit the initial corporate expenses.Incorporation
This step includes submitting a requirement.- Legal startup form
- Municipal approval
- A capital deed
Post-Establishment Process
Apply for a visa
The next step in the incorporation process is to apply for visa services to all employees. In a word with your visa consultant, you can get access to visa services faster.Employee Registration
Employees should be recognized as part of the business, and registering an employee under the company name is mandatory.Switch bank account
In order to successfully conduct business transactions, you need to convert your business capital account into a current account. The Oman market has come a long way in the last decade when it comes to entrepreneurs. If you are one among those who are planning for a startup in Oman, follow the above mentioned step to peruse your dream. You will also be interested on:- Salalah Free Zone Oman
- Oman Special Economic Zone of Duqm
- Oman Mainland Company Formation
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Starting a Business in Oman, like other GCC countries involves certain steps that need to be cleared appropriately. Let’s start by taking a look at the basic requirements before turning on to the specific processes.
Requirements to Register a Company in Oman
- A minimum capital requirement of OMR 150,000
- At least 2 Shareholders
- A registered office address
- One or more Directors of any nationality
Company Registration Process in Oman
The business ensemble is given a physical platform by the company formation process. The company Formation process involves certain steps which are to be followed for the incorporation and the post-incorporation process to set up a business entity in Oman.INCORPORATION PROCESS
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Documentation
- Shareholders identity card
- Shareholders visa and passport
- Articles and memorandum for Association
- Tax Registration Certificate
- Certificates from Chamber of Commerce and Industry Affiliation
- Field company Registration form
- Initial deposit certificate
- Opening a Capital Account
-
Incorporation
- Approval from municipality
- Legalized opening forms
- Certificate of share capital
POST-INCORPORATION PROCESS
The post-incorporation process involves the following steps-
Application for Visa
-
Registration of Employees
-
Bank Account Conversion
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Oman is a prime location and a future link between Asia and Africa. As such, starting a business here seems ideal, especially with the business-friendly atmosphere and the government’s initiatives in many sectors to bring in more investors.
To start a business in Oman, you should research thoroughly about the country, the city where you wish to operate and the viability of the business solution.
Start a new Business in Oman
Research on the type of company
There are three main types of business models that you can choose. You can start an LLC with a local investor as a sponsor, or you can start your company in a free-zone. You can also open a branch of a foreign company in Oman.Select location
Select the location of the business carefully. The site will impact footfalls, rent and sales. Free zones will give you more benefits on tax, but your business might be better suited to be in an area where you will get better traffic.Get your documentation ready
Make a Memorandum and Articles of Association, get all the required documentation ready, open a bank account, have the investors visa and gather other required permits.Reserve your company name
Ministry of Commerce and Industry operates under the Omani law and maintains a list of names for the business. Register your unique name with the MCI, according to the naming conventions of the Omani Law.Start the incorporation process
Once all your documentation is ready, submit the company opening forms, bank certificates and other necessary documents to the Ministry of Commerce and Industry for approval.Register with the Oman Chamber of commerce and Industry
Every business also needs to register itself with the Oman Chamber of Commerce and Industry (OCCI). They will give approval for your business to operate under the regulation of the Omani Law, and for compliance with commercial rules.Managing Bank account
You should open a bank account initially to deposit the capital for investment. This bank account can be later converted into a current account once your business get all the necessary permission to operate.Getting a visa for employees
Oman allows you to sponsor the visa for some of your employees to manage your business in the country. Make sure that the employee is registered under your business to get the visa. 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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Opening up a Branch office in Oman: As a country, the Sultanate of Oman is advancing vigorously into a great business hub spreaded its shadows in a large commercial spectrum. This Omani government leads the Sultanate by its concentration towards industrialism, diversity and privatization with the concept of Vision 2020 for creating better opportunities in employability sectors to take up the arms of young Omanis. Thus establishment of a company in this sultanate became easier than early process because it lets international investors and other business owners to operate their firm in several ways. Investors all over the world are benefitting from the Vision 2020 to widen their company.
Although there are many methods, an investor can enter into the market of Oman. One such good door is establishing a branch office. The foreign company's branch office set foot into a contract with quasi government or the government entity sanctions to operate as a branch in Oman.
Go through this article to understand what exactly a branch office is about.
Know what a Branch office is !
You may know what a branch office is. A company's office located in some other place from the main office location is known as Branch office. It is simply an outlet of a company except the headquartered company. When a business needs to spread its out stretch to other location sticked to its main root company, your option is to set up an extended office called Branch.An introduction of opening a Branch office in the Sultanate of Oman.
A branch office activity is equal to the headquarters activity. There is no permission to do any activity without approval from the main office. It lives in Oman upto a contract period of time tied up with the government of Oman or a Quasi government entity. Once the contract duration completes, the validity of this registration also completes. Branch office has to register with the Ministry of Commerce - Oman.Needed documents to open a Branch office
- Incorporation certificate from the main office to branch incorporating country.
- Memorandum of Association Certificate.
- Establishment of company certificate.
- Main office authority to the branch stating its responsibility of whatever happens to its branch office.
- ID copies of proposed manager or managing authorized signatories.
- Agreement copy signed for entering into Omani government that mentions the date of starting and expiring.
Registration process of branch office
- Your branch has to be registered with the Omani government entity.
- Submit your request to the investor Service Department.
- Draft and submit Memorandum of Association along with all the supporting documents.
- It generates an application number to note it down.
- Once you get approved, collect your certificate and pay the required fee.
- License will be issued from the Ministry of Commerce.
- Get required permissions from Municipality, Oman police department, Manpower and Industrial ministry.
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MAINLAND COMPANY
An LLC (Limited Liability Company) is the earliest and most commonly known structure in the global marketplace. LLCs are limited by their shares and are defined by the liabilities of the company. In order to form an LLC, a minimum of 2 to a maximum of 50 shareholders is necessary. In order to encompass such an ensemble, with regard to the UAE law, a UAE national (individual or corporate) should own 51% of the shares while the remaining 49% is allotted to the other expatriate shareholders of the company. The major benefit of Mainland companies is access to the UAE Market.Business Overview
Mainland companies are at ease of carrying out their business activities throughout the UAE market, either inside or outside, without limiting their access within the Free zone alone.Structure of Ownership
- The presence of a UAE National is mandatory in mainland licenses either as a National servicing Agent or a local partner
- In an LLC, 51% of the shares rest with the UAE National while only 49% is allotted to the expatriate partner.
- In the case of a professional license, 100% of the shares rest with the expatriate partner while a UAE National is appointed as a National Service agent.
Office Space
In the case of mainland license, a 140 square foot office is mandatory along with an Ejari (Dubai), or Tawtheeq (Abu Dhabi). Only after producing these documents to the Department of Economic Development, the license will be released.Visa Eligibility
Mainland ensembles don not have limitations. The MOL (Ministry of Labor) issues an Electronic Quota to every company highlighting their visa eligibility. This can be increased by increasing your office space, as you will be allocated 1 visa for an 80 square foot office space. In case of the presence of external staff like drivers, sales professionals, etc. a separate quota can be applied without affecting the office space quota.Approvals of Governing bodies
- It is mandatory in case of a mainland license to get approval from concerned departments like Dubai Municipality (DM), Department of Economic Development(DED), Ministry of interiors or Immigration (MOI), Ministry of Labor (MOL)
- Certain circumstances, the third party governing licenses are also needed depending on business activities. This includes KHDA (Knowledge and Human Development Authority) approval for education-related activities, DHA (Dubai Health Authority)/HAAD (Health Authority Abu Dhabi) for medical activities, Civil defense for security-related activities, Food Control Department of Municipality for a food-related license, RERA (Real Estate Regulation Authority) for real estate activities.
FREE ZONE COMPANY
Free zones are different from the mainland owing to the fact that it’s an isolated land or setting with different tax, import, and customs regime. The major advantage is that a free zone company does not have to give out the shares, the expatriate can own 100% of the shares.Business Overview
- Free zone companies are allowed to conduct businesses only in specific free zones or outside UAE but are not authorized to sell their products or provide services in the UAE mainland.
- Even though the local business is restricted for free zone companies, the distribution of products through a distributor having a mainland license is possible. This particular distributor can act as your local agent and charge a certain fee (lower than 5% on free zone invoices) to trade into the local market. The distributor is responsible for shipping the goods if not so, a 5% duty fee needs to be paid for goods leaving the free zone
- Marketing your company is also possible only inside the free zone, which may even be a face-to-face or business card handouts.
Structure of Ownership
A company in the free zone can be handled 100% by the expatriate without the need for a UAE National or a service agent.Office space
A free zone license can be procured with or without a physical office. The license holders are at ease to use a smart/Flexi office, but with due restrictions on visa allocation.Visa Eligibility
The visa allocation is limited in the case of free zone companies from 1-6 visa packages. In the case of more visa requirements, you will have to rent a physical space inside the free zone. Renting physical spaces inside the free zone is pricey due to the high demand for commercial space and limited supply.Approvals by Governing bodies
Approval from external authorities is usually not required by free zone authorities as free zone facilities are mainly for the import and export of goods. It is to be noted that no external approvals from governing bodies outside the free zone are entertained.Setup your Business Today!
Free Zones for industrial Setup in Oman : There are four free zones for industries in the Sultanate of Oman. Each zone focuses on the development of different business areas and investments. These zones permit all industrial activities like import of raw materials, processing, assembly and packaging, export of finished goods, storage and warehousing of products. The free zones are categorized based on the business areas they support. Select a zone based on your trade and business requirements. Listed below are the 4 free zones in Oman.
Al Mazunah Free Zone
Al Mazunah free zone is located near the Yemen border. This makes it a gateway to enter into the Republic of Yemen and East African countries, from the Gulf. This zone was established in 1999 and is a center for commercial, industrial and service sectors.Salalah Free Zone
This zone is known for its low cost of labor, utilities, and infrastructure. It provides solutions to businesses that want to expand into the Middle East, Africa Southern Europe, and Asia.Sohar Free Zone
This zone is one of the world’s fastest-growing ports. It is around 4500-hectare deep-sea port and deals with close to US $26 billion. This port is expected to take control of handling Oman’s National Food Reserve.Duqm SEZ
Duqm SEZ (Special Economic Zone) is soon to become one of the biggest economic zones, covering an area of close to 1745 square kilometers. This zone is further divided into 8 sub-zones to accommodate different types of investments such as industries, sea-port, dry-dock, tourism, fisheries to name a few. Now, let us look into the advantages of setting up a business in Oman. Contact Black Swan for Free Zone Company Setup in Oman You will also be interested on:- Salalah Free Zone Oman
- Oman Special Economic Zone of Duqm
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