Here’s a practical guide from Enterprise Singapore on the nuts and bolts of setting up shop in Oman.
To do business in Oman, one of the first things is to decide is your business structure. There are a few options, with the most common being Limited Liability Company (LLC).
At least 30% of the share capital of an LLC must be owned by either an Omani national or a fully owned Omani entity.
Similar to an LLC, at least 30% Omani ownership is required for each JSC. However, incorporating a JSC is more complicated than incorporating an LLC as it requires additional information and approval from the Ministry of Commerce and Industry (MOCI).
Partnerships are firms created by two or more individuals. The partnerships can take several forms:
For non-Omani entities, a branch office may only be established if the foreign parent has a contract with either a government or a quasi-government body. The registration of the branch office remains valid for the duration of the contract.
A commercial representative office may only be used for the purposes of marketing and promotion of your products or services to retailers, not directly to customers. The commercial representative office may not sell products or services, or engage in other commercial activities.
A joint venture is an unincorporated business that does not have separate legal personality. It is formed by way of contract between two or more investors with the intention of working together in a common business venture. Although it is not treated as a separate legal entity, a joint venture must keep their own audited accounts and is taxed as a separate legal entity. A joint venture is less appealing as the shareholders are subject to unlimited joint and several liability.
The process of incorporating an LLC typically takes 4 – 8 weeks, from submission of the application to the review and approval by the MOCI.
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No, there are no restrictions.
At least 30% of the share capital of an LLC and a JSC must be owned by either an Omani national or a fully owned Omani entity.
2 Oxford Business Group, Summary of relevant laws and regulations for investors in Oman
The law requires any non-Gulf Cooperation Council (GCC) national, whether a natural or legal person, that desires to engage in business in Oman, or acquires an interest in the capital of an Omani company, to obtain a licence from the Ministry of Commerce and Industry (MOCI). A licence is granted if both:
Business activities such as real estate brokerage, employment placement services, investigation and security services, printing and publishing services, and radio and television transmission services are only allowed to be carried out by Omani nationals3.
You apply for licenses after setting up your company.
License renewals depend on your business entity and the type of license required.
Yes, you should display the business license prominently in Arabic.
Your LLC must notify the Ministry of Commerce and Industry (MOCI) and reflect on its updated commercial registration certificate (CR) the changes in:
You can issue your shares at any price.
No, there are no restrictions on capital repatriation.
It is not necessary. You can receive capital contribution in any of your company's bank accounts.
It depends on the bank and would take roughly 3-4 weeks, excluding the time taken to prepare the documents5.
No, you do not need to keep a minimum amount related to the share capital but your bank may require a minimum deposit in your account.
Companies pay an annual income tax of 15% on the net profit of the enterprise.
Yes, you may enjoy tax and other incentives if you incorporate in a Free Zone or a Special Economic Zone (SEZ).
There are no special grants for foreign-owned companies.
The tax year is the calendar year, which taxpayers generally are expected to use as their accounting year in drafting financial statements (a different accounting year is allowed if followed consistently). Upon setting up business, taxpayers may be able to use an opening account period of 12 months of a maximum period up to 18 month6.
For Singaporean firms in Oman, the withholding tax on dividends is 5%; interest is 7%; and royalties is 8%7.
Yes, dividends received by an Omani company from another Omani company are not taxable, but dividends received from a foreign company are subject to tax.
Yes, the Singapore-Oman Double Tax Avoidance agreement (DTA) provides relief from double taxation in the situation where income is subject to tax for both countries. Read more here.
Oman currently applies no property, value-added tax (VAT) or sales taxes. However, Oman government representatives have said that the state is looking to implement a 5% VAT regime from 1 September 2019.
6 Deloitte, International Tax: Oman Highlights 2019
The enhanced Oman Labour Law was introduced in 2012 to regulate employment relationships for private employees. These are the minimum employment conditions to be met are:
All Omani employees must be registered with the Public Authority for Social Insurance (PASI). PASI was formed as a social insurance to provide for Omani nationals in old age, disability, death or occupational injury or disease.
Under the Social Security Law, the employer must contribute 11.5% of the employee's gross salary – which includes 1% for occupational injuries and disease – to PASI, while the employee must contribute 7%.
Yes, you will have to apply for a labour clearance from the Ministry of Manpower before your Singaporean employees can start working in Oman.
The Ministry of Manpower has issued guidelines that require private companies operating in various sectors to employ a certain percentage of Omani nationals in their work force. The Omanisation percentage in various sectors changes regularly according to directives issued by the Ministry of Manpower. Certain specified categories of employment are reserved for Omani nationals.
If you wish to sell your goods in Oman without incorporating a company, then you may choose to appoint a commercial agent to distribute, market and promote the sale of your goods. However, you should seek legal advice before entering into an agency agreement. If an agency agreement is not with a registered agent in Oman and registered with the MOCI, you could find yourself without a right to legal recourse in the country.
8 ICLG.com, Oman: Employment & Labour Law 2019
Please note all information is based on online sources, and is provided in good faith for guidance and reference purposes only. It is accurate as of June 2019.