Register company in Oman: Introduction
To register company in Oman is hassle-free if you are familiar with the entire incorporation process. With Tetra Consultants at the wheel, you will be able to dedicate your time and resources to other more important channels.
With our lean-and-mean mentality, you can rely on our team of experts to provide you a seamless experience throughout the whole company registration process in Oman. Our ultimate goal is for your business to be operationally ready within the stipulated time frame.
Our service package includes everything you will require for business setup in Oman:
- Register company in Oman with the Ministry of Commerce and Industry
- Local company secretary and registered address
- Corporate bank account opening
- Annual accounting and tax services
How long to register company in Oman and open a corporate bank account?
- Tetra Consultants will complete the process to register company in Oman through a seamless and fuss-free procedure.
- Upon receiving the required due diligence documents of the directors and shareholders, Tetra Consultants will conduct an Oman company registration search to check the availability of your preferred company name.
- The process to register company in Oman can be carried out remotely and you will not be required to travel to the country during the process.
- Within 6 weeks, you can expect to receive the documents of your new company including the certificate of formation, Memorandum and Articles of Association as well as the registry of directors and shareholders.
- After successful company formation, Tetra Consultants will assist to open a corporate bank account with a local bank or with an overseas global bank depending on your long-term goals and objectives. Opening a bank account in Oman for foreigners will usually take around 4 weeks to be completed.
- Consequently, you can expect to start operations and issue invoices with your new business within 10 weeks upon engaging Tetra Consultants.
- Tetra Consultants’ team of Chartered Accountants will ensure that your newly established company will continue to meet regulatory laws set by the local Tax Authority. This includes providing you with monthly bookkeeping, preparation of financial statements and annual tax return filings.
Can a foreigner register company in Oman?
- The government offers foreign investors several options on the different types of business entities to choose from for Oman company formation. Tetra Consultants will advise you on the steps and requirements for starting business in Oman.
- Generally, an Oman business can be wholly foreign-owned as long as they do not conduct business activities in the blacklist provided by the Ministry of Commerce and Industry. The blacklist includes activities in protected industries such as transportation, tailoring, vehicle repairs, salon services, fishing, retail sale of souvenirs, antiques, and paintings, etc.
- The registration fee and minimum capital requirement for a 100% foreign-owned company is higher than that of a standard company. For LLCs, the minimum amount is OMR 150,000 if the company is wholly foreign-owned.
- There are no requirements to have a local resident director or shareholder.
- When deciding the most suitable entity type, it is important to consider various factors that include but are not limited to availability of personal liability protection, tax ramifications, ownership and management flexibility as well as compliance requirements. Each business entity will come with its distinctive features.
- Before the start of the engagement, Tetra Consultants will fully understand your business before recommending the most optimum business entity.
- Some considerations we take into account include the type of business activity, tax obligations and nationalities of the shareholders and directors. Our consultants will also offer more information on the requirements imposed to set up these entities.
Types of entity structure to register company in Oman
Tetra Consultants will assist in recommending the most optimum business entity for your foreign company registration in Oman. There are 4 main types of company registration in Oman, namely the formation of the following business entities: Limited Liability Company, Limited Partnership, Branch Office and Representative Office.
Limited Liability Company (LLC)
- A LLC is the most common legal entity established in Oman.
- With a LLC, you can benefit from protection from liabilities and a regulated access to capital.
- Primarily adopted by large businesses, a LLC allows shares to be freely and easily transferable.
- Shareholders are protected according to the level of their contribution to the capital. With limited liability imposed on its shareholders, in any event of winding up, you will not have to worry about incurring the debts and obligations of your company.
- There are generally some restricted activities such as banking, insurance and investment operations that are not allowed to be practiced by a LLC.
- To incorporate your LLC in Oman, you must have minimally 2 or more limited partners. A foreign partner is only restricted to own a maximum of 70% of the capital of the company and can have interest in managing the day-to-day operations of the company.
- The minimum capital requirement expected of your LLC will depend on the nationality of your directors. For Omanis of Gulf Cooperation Council nationals, you can expect a minimum requirement of OMR 20,000. While for mixed shareholding with foreigners, you can expect a minimum requirement of OMR 150,000.
Limited Partnership
- One can form a limited partnership with 1 or more general partners who shall be jointly and severally liable for its debts as well as 1 or more limited partners whose liability will be limited to the extent of their capital contributions.
- In a limited partnership, a general partner will be granted the privilege of managerial rights while limited partners are not permitted to manage the company.
- Generally, to form a limited partnership in Oman, you will require minimally that your general partner is an Oman or Gulf Cooperation Council national.
- Foreigners are only permitted to be silent partners who hold no position in management. There is no minimum capital amount mandated to form a limited partnership.
Branch Office
- A branch office is an extension to its foreign parent company and is permitted to perform or conduct trade activities as per set out or predetermined by its foreign company.
- As such, it does not have a legal identity distinct from its parent company. Therefore, all debts and obligations incurred by the branch will be borne by the parent company.
- Typically, a branch is also set up for the purpose of consolidating the financial outcome of its parent company.
- To set up, it is required that the foreign company owns a contract with 1 of the government entities or a state-sponsored company.
- There are no minimum capital criteria imposed to set up.
Representative Office
- Similar to a branch office, a representative office can also be 100% foreign-owned and controlled.
- However, an exception that applies to a representative office is that it is restricted from making sales locally and is confined to being primarily used to spread and promote materials regarding its parent company.
- A representative office is best advised to be used for the purpose of conducting market research.
- There are not many requirements imposed to set up a representative office. You can expect no minimum paid-up share capital. However, minimally, there should be a manager available to manage the office.
How to register company in Oman?
Step 1: Choosing an optimum business structure to register company in Oman
- Prior to company registration in Oman, it is essential to choose the correct type of company.
- Based on your business structure and long-term goals, Tetra Consultants will advise you on the most optimum business entity, paid up capital, corporate structure and business licenses such as the municipality license if applicable.
- Generally, Tetra Consultants would recommend LLC company registration in Oman as it is the most common legal entity in the country and can be incorporated by a single shareholder.
Step 2: Reservation of company name
- Tetra Consultants will search and complete company name registration in Oman through the Commercial Registry of the Ministry of Commerce and Industry.
Step 3: Preparation and submission of relevant documents to register company in Oman
- Tetra Consultants will assist you in preparing the documents necessary to register company in Oman with the local company registration authority. These documents include a draft of the Memorandum and Articles of Association, business plan and other incorporation documents.
- Generally, the Constitutive Documents have to be written in the Arabic Language. Therefore, Tetra Consultants will engage the help of a professional translator to ensure that your documents are properly translated.
- Upon successful registration of your company, Tetra Consultants will courier the Certificate of Incorporation, Memorandum and Articles of Association and other corporate documents to your preferred address. Your Oman company registration number can be found on the Certificate of Incorporation.
Step 4: Tax Registration and other relevant registration
- Once the Certificate of Incorporation has been acquired, our team will follow up in enrolling with the Tax Department at the Ministry of Finance.
- Following which, we will also carry out registration of your business with the local Royal Police, Muscat Municipality and Ministry of Manpower accordingly.
Step 5: Creation of company seal
- All companies in Oman require a company seal that is issued by the authorized signatory of the company. You will need to first obtain and submit documents such as a Chamber of Commerce and Industry Affiliation certificate, authorized signatory form and a certificate of initial capital deposit. Tetra Consultants will assist you to fulfill these obligations as well as to design and order a company seal from a third-party supplier.
Step 6: Corporate bank account opening after you register company in Oman
- Depending on your business structure, the documents required to open a corporate bank account will be slightly different.
- Tetra Consultants will help in consolidating the documents and opening a corporate bank account with a reputable bank of your choice.
- Typically, the directors and shareholders are not required to travel to the jurisdiction to open a bank account. However, if travel is required, we will have a representative accompany you to the bank meeting.
Post-Incorporation Process
Once the process to register company in Oman is concluded, there are several post-incorporation procedures that must be completed to comply with the country’s laws and regulations. Here are some of the primary post-incorporation procedures for a company registered in Oman:
- Obtaining a Tax Card: Within 30 days of registration, companies in Oman must obtain a Tax Card from the Tax Authority. The Tax Card is crucial for opening bank accounts, signing contracts, and filing tax returns.
- Registering for Social Security: Within 15 days of starting their employment, companies in Oman must register their employees with the Public Authority for Social Insurance (PASI). Employers are responsible for contributing to the social security fund on behalf of their employees.
- Registering for Value Added Tax (VAT): Companies in Oman must register for VAT if their annual turnover exceeds OMR 38,500 (approximately USD 100,000). The VAT registration process involves obtaining a VAT registration number and submitting periodic VAT returns.
- Obtaining Licenses and Permits: Depending on the nature of the business, companies in Oman may need additional licenses and permits to operate. For example, a construction company may require a building permit from the Ministry of Housing and Urban Planning.
- Maintaining Company Records: Companies in Oman must maintain accurate and up-to-date records of their financial transactions, including invoices, receipts, and contracts.
Accounting and tax obligations
- Many international clients engage Tetra Consultants for Oman accounting and tax services. By outsourcing your accounting and tax obligations to Tetra Consultants, you can be confident that you will be in the best hands. Our team of consultants will ensure that your firm’s financial statements, corporate tax returns and audits are timely completed without the need for you to travel.
- Additionally, outsourcing your accounting and tax needs to Tetra Consultants will allow you to reduce overhead costs while being ensured of timely reporting and filings.
- Before the start of the engagement, our accounting team will also keep you updated of all the required deadlines and expectations. Thereafter, we will prepare all required filings in advance to ensure that the stipulated deadlines are met.
Annual reporting requirements
- The financial fiscal year in Oman runs according to the calendar year. Newly established companies can either opt for an opening period of 12 months or a maximum period of up to 18 months instead.
- Within 6 months after the end of the financial year ending, Omani companies are required to file an annual income tax return accompanied by its audited financial statements and any tax due.
- The local laws also mandate that accounting records have to be maintained for safekeeping for minimally 10 years prior to the end of the accounting period.
- All companies should generally adopt the International Financial Reporting Standards when preparing financial statements. The documents should include statements of the financial position, income, changes in equity and cash flows.
- It is also required that the financial report is minimally submitted in Arabic language. As such, Tetra Consultants will also appoint a professional translator to ensure that your report will meet all requirements set.
Corporate income tax
- In general, all Oman companies are required to pay a Corporate Income Tax rate of 15%. Only oil companies will face a corporate tax rate of up to 55%.
- Small and medium-sized enterprises may be eligible for a reduced Corporate Income Tax rate of 3%. To be eligible, your small or medium-sized enterprise should have:
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- An authorized share capital not exceeding OMR 50,000
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- A gross income totalling less than OMR 100,000;
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- Less than 15 employees; and
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- Not be involved in any transport, extraction of natural resources, banking, insurance or financial services business activities.
Dividend distribution tax
- If you are looking to distribute dividends to non-residents, you can expect to be subjected to no withholding tax. However, a 10% withholding tax will be levied on the payments to foreign companies without a permanent establishment in the jurisdiction.
Capital gains tax
- Capital gains tax is levied at a 15% rate.
- Tetra Consultants will assist you in applying for these tax considerations.
Why register company in Oman?
Political
- In its efforts to boost the economy, the local government is constantly on the lookout to improve its diversification initiatives – this includes placing greater emphasis on tourism.
- While Qaboos’ ruling of Oman was robust with his role in managing domestic and foreign affairs, his ruling also came with much economic hardship and much political unhappiness.
- According to Transparency International’s 2020 Corruption Perceptions Index, the nation holds a position of 54th among 180 countries when it comes to the degree of public sector corruption.
Economic
- Oman holds excellent bilateral relations with the United States. Its relations also led to the establishment of a free-trade agreement that eliminates tariff barriers.
- American investors are treated as equal to a layman Omani investor, which allows them to similarly benefit from full foreign ownership and no capital limitation when doing business locally.
- The domestic economy has been substantiated by diversification and foreign investment through establishing multiple ports and free zones such as Sohar.
Social
- According to the Overseas Security Advisory Council, Oman is generally a safe country and is an important regional counterterrorism partner.
- The official language adopted in the nation is Arabic. According to Education First’s 2020 English Proficiency Index, the nation is ranked 98th out of 100 when it comes to the population’s level of proficiency in English.
- Domestic ethnic tensions exist in the country and may undermine its harmony.
Technological
- Committed to innovation, the Oman Technology Fund aims to assist and develop the Information and Communications Technology sector.
- Other relevant efforts and programs rolled out by the state include The Government Innovation Initiative that was established to encourage greater innovation and creativity through adopting technologies in the government entities.
- The Royal Oman Police has activated and adopted the use of drones to combat the Coronavirus Disease 2019.
Legal
- In Oman, Islamic law is the source of its legislation. Nonetheless, the country constantly amends its law and regulations to provide a flexible and pro-business framework.
- The free zones geographically located in the nation are each considered as separate and distinct legal jurisdictions, each owning its own regulatory laws.
- Oman Labour Law mandates that employment contracts have to be executed in the Arabic language. As such, you may encounter difficulties if your business operations will be located in the nation.
Environmental
- Oman holds the highest standards when it comes to protecting the environment. With the publication of the document on the protection and development of the environment in the Arab world, the nation pledges to commit to a guide that proposes to safeguard the environment.
- In 2017, Oman announced its plans in building the first wind farm in Harweel in the Dhofar Governorate so as to contribute to the use of greater sustainable energy.
- The state-owned Petroleum Development has intentions of building more solar power projects in the nation to contribute to its energy use.
Find out more about how to register company in Oman
- Contact us to learn more about how to register company in Oman. Our dedicated and experienced team will revert within the next 24 hours and answer all your queries.
FAQ
What is the best business in Oman?
- Some profitable industries to consider are the agriculture industry and the technology industry. In an attempt to reduce the country’s reliance on oil exports, the local government has been emphasising on the expansion of non-oil sectors such as agriculture. It is relatively cheap to buy farming land in Oman and setting up an agriculture business locally may allow you to apply for grants or interest subsidies from banks.
- The IT and technology industry in Oman is another attractive industry to set up a company in as it is still growing and hence there are many business opportunities in this sector. The government has set up a Technology Fund to encourage entrepreneurs to incorporate IT and tech companies that have the potential to implement technical innovation ideas within the country. Hence, setting up a tech related business in the jurisdiction will give you access to greater investment capital and grants.
- Alternatively, business owners can consider setting up commodity stores in Oman. Companies that set up in free zones will be exempted from import duties, hence setting up a commodity store to sell imported goods may be profitable.
What is the minimum capital required for company registration in Oman?
- The minimum capital required for company registration in Oman varies depending on the type of company and its activities. A Limited Liability Company (LLC), which is the most common type of company in Oman, requires a minimum capital of OMR 20,000 (approximately USD 52,000), with at least 30% of the capital to be paid up at the time of registration. A Joint Stock Company (SAOG), a publicly traded company in Oman, requires a minimum capital of OMR 2,000,000 (approximately USD 5,200,000), with at least 25% of the capital to be paid up at the time of registration.
- It is important to note that these are just the minimum capital requirements, and companies may choose to invest more capital depending on their business needs and goals. The registration process and requirements may also vary depending on the type of company and its activities, so it is advisable to enlist guidance from Tetra Consultants’ team of business setup experts to ensure compliance with the regulations.
What is the main regulatory authority for company registration in Oman?
- The primary regulatory authority for company registration in Oman is the Ministry of Commerce, Industry, and Investment Promotion (MOCIIP). The MOCIIP oversees the registration of both new and existing companies in Oman. The ministry has several departments and agencies responsible for facilitating the registration process, such as the Department of Commercial Registration, the Directorate General of Investment Promotion, and the Public Authority for Investment Promotion and Export Development.
- The Department of Commercial Registration is responsible for registering businesses and issuing commercial licenses. It also maintains a commercial register that contains information about registered companies in Oman. The Directorate General of Investment Promotion is responsible for promoting foreign investment in Oman and facilitating the establishment of foreign companies in the country. On the other hand, the Public Authority for Investment Promotion and Export Development is responsible for promoting Omani products and services in international markets and attracting foreign investment to the country.
- Conclusively, the MOCIIP is the main regulatory authority for company registration in Oman and is essential in promoting investment in the country.
How much does it cost to start a business in Oman?
- The minimum shared capital necessary to incorporate a foreign-owned Limited Liability Company is OMR 150,000. As for Tetra Consultants’ engagement fees, this will depend on the exact services required from Tetra Consultants. Our fees are inclusive of government fees and all fees will be clearly stated in our engagement letter prior to the start of the engagement. Tetra Consultants believes in transparency with our valued clients and there are no hidden fees.
Is a company secretary necessary to incorporate a business in Oman?
- No, a company secretary is not necessary. However, Tetra Consultants will provide you with a local secretary to assist in the annual tax filing and accounting requirements.
Do I need a resident director to incorporate a business in Oman?
- No, a resident director is not required to incorporate in Oman. There is no nationality requirement for directors in an Oman business.
What are the minimum requirements to set up an LLC in Oman?
- To set up an LLC in Oman, you will need to have at least 2 shareholders and 1 director. There are no nationality requirements for the director or shareholder. Other requirements for company registration include having a listed address in Oman and a minimum paid-up capital of OMR 150,000 for foreign-owned companies.
What is the mandatory criteria for a fully-foreign owned business in Oman?
- Previously, foreign ownership was capped at 70% of share capital for commercial companies. Under the new Foreign Capital Investment Law in 2020, companies operating in specific sectors are allowed 100% foreign ownership.
- As long as companies do not conduct business activities on the blacklist released by the Ministry of Commerce and Industry, they can apply for approval to be wholly foreign-owned through the Oman Chamber of Commerce and Industry. The blacklist includes activities in protected industries such as transportation, tailoring, vehicle repairs, salon services, fishing, retail sale of souvenirs, antiques, and paintings, etc.
How many Free Zones are there in Oman?
- There are three Free Zones in Oman, namely the Salalah Free Zone, Sohar Free Zone and Al Mazunah Free Zone. The nation also has two Special Economic Zones: the Duqm Special Economic Zone and Knowledge Oasis Muscat. Businesses that set up in these free zones can enjoy 100% foreign ownership, tax benefits, exemption from customs duties and other monetary incentives.
Is there sales tax in Oman?
- Yes, the Oman Tax Authority has recently released a Value-Added Tax (VAT) of 5% in April 2021 for non-essential goods and services. Businesses that have an annual value of supplies of more than OMR 38,500 will be required to apply for VAT.
Is there personal income tax in Oman?
- No, there is no personal income tax in Oman. In other words, no tax will be levied on income from capital gains, wealth, death or property. However, non-resident individuals may be subjected to 10% withholding tax on certain specific incomes.
How can I start an LLC in Oman?
- To start your LLC in Oman, you must have minimally 2 or more limited partners. A foreign partner is only restricted to own a maximum of 70% of the capital of the company and can have interest in managing the day-to-day operations of the company.
- The minimum capital requirement expected of your LLC will depend on the nationality of your directors. For Omanis of Gulf Cooperation Council nationals, you can expect a minimum requirement of OMR 20,000. While for mixed shareholding with foreigners, you can expect a minimum requirement of OMR 150,000.
- Tetra Consultants will assist you with the process to start an LLC in Oman. We will assist you in preparing the documents necessary for incorporation with the local company registration authority. These documents include a draft of the Memorandum and Articles of Association, business plan and other incorporation documents.
- Upon successful registration of your company, Tetra Consultants will courier the Certificate of Incorporation, Memorandum and Articles of Association and other corporate documents to your preferred address.
- Tetra Consultants will then assist you with tax registration, the creation of the company seal and opening a business account with a reputable bank.
How can I start a business in Oman free zone?
- After incorporating your company with the Ministry of Commerce and Industry, you can proceed to setting up your company in a Free Zone with the local authority.
- Tetra Consultants provides you with a fast and simple way to set up your company in an Oman Free Zone through our package which includes business incorporation; provision of local resident director, provision of local company secretary and listed address; opening a business account with a reputable bank; and fulfilling annual accounting and tax obligations. Based on your company’s business activities, Tetra Consultants will also recommend you the best Free Zone to set up your company in.
