Business Setup in Oman : Oman is a rapidly growing economy with a lot of potential for foreign investors. The government has made it very easy for foreigners to start a business in Oman, and there are a number of business setup services available to help you get started.
Setting Up a Business in Oman with Different Entities
Should you run your business in Oman as a foreign company or as a limited liability company (LLC)? If this is your question, keep reading this blog post to find out.
The most common way to answer this question is to set up a LLC (limited liability company) with a GCC state national, an Omani, or an American as a passive shareholder. A 100% foreign-owned company, on the other hand, can be set up if certain government requirements are met or if the company is set up in one of the country’s free zones.
Why setup business in Oman ?
If you’re thinking about setting up a business in Oman, there are a number of business setup options that can help you. Black Swan can help you with everything from company registration to obtaining visas and business licenses in Oman.
Setting up a Company in Oman with a Local Entity
Setting up a company in Oman with a local entity is a good option for foreign investors who want to have a greater degree of control over their business. A local entity can provide valuable insights into the local market and help to navigate the complex Omani bureaucracy. Five different kinds of local entities exist are listed below :
In Oman, a sole proprietorship or one-person company can be started with just one director and no minimum amount of paid-up share capital. With a simple corporate structure, a one-person company is likely to become the most common type of business for foreigners.
A limited liability company is one in which the liability of each shareholder is limited to the amount of money they put into the company. In Oman, a limited liability company (LLC) needs at least two shareholders, and one of them should be a GCC national or an American who owns at least 30% of the company’s shares. An LLC also needs one director (who can be one of the shareholders as well).
Foreigners who want to start a business and own all of its shares must get permission from the Ministry of Commerce and Industry, which is the law in Oman. To get the approval, a company needs to submit a detailed business plan with information about the capital investment, how it will help the country’s economy, and how many local jobs it will create.
An Oman Free Zone Company can be set up if it meets three main requirements. It is 100% owned by a foreign company, it can do business with local customers, and it doesn’t need a minimum investment.
Free zones are usually recommended for manufacturing companies that want to use the country as a base to expand their operations in the Middle East.
A public joint stock company is a joint stock company whose shares can be bought and sold by anyone (SAOG). An SAOG needs a share capital of at least $400K USD*.
But a private stock company (SAOC), which is a joint stock company that doesn’t sell shares to the public, needs a minimum capital of OMR 50,000. Also, the company needs at least three shareholders, at least one of whom must be from Oman and hold 30% of all company shares.
Any joint-stock company, no matter what kind it is or how many foreigners are involved, must do the following two things: Must get permission from the Ministry of Commerce and Industry and have at least 400K USD* in capital.
An LP is a business that must be registered with at least one general partner and one limited partner. LP is a general partnership with some changes.
A limited partner is only responsible for the partnership’s debt up to the amount of money they put into it. A general partner, on the other hand, is responsible for the partnership’s debt up to the amount it invested. The Omani general partner is required to register the limited partnership with the Oman Commercial Register.
Starting a Business in Oman with a Foreign Entity
Starting a business in Oman with a foreign entity is a relatively straightforward process. The Omani government has made it easy for foreign investors to set up shop in the country, and there are a number of different business entities that foreign investors can choose from. Listed Below are are three kinds of foreign entities.
A branch of an international company that has signed a contract with the government or one of its agencies and is therefore allowed to register and run a foreign branch in Oman. A branch office in Oman also needs approval from the Oman Ministry of Commerce and Industry, and the license is only good for the length of the project.
Even though a foreign company owns and manages the Omani representative branch office, it is unable to conduct direct sales in Oman. An Omani representative office can only do two things: first, conduct market research; and second, promote the business of the parent company.
A foreign company that wants to do business in Oman but doesn’t want to set up a local branch or company can do business through local commercial agents instead.
The Oman Ministry of Commerce and Industry needs to be told about the deal with the local agency. On their Omani income, clients of commercial agencies still have to pay corporate income tax and file annual tax returns. Prices could go up or down. Please get in touch with us to let us know.
What are the foreign entities with which you can set up your business in Oman?
There are three types of foreign entities:
- Branch office
- Representative office
- Commercial Agency
Who can start a business with a commercial agency in Oman?
A foreign company that wants to do business in Oman but doesn’t want to set up a local branch or company can do business through local commercial agents instead.
What are the local entities with which you can set up your Omani business?
There are five types of local entities:
- Sole Proprietorship
- Limited Liability Company
- Free Zone Company
- Joint Stock Company
- Limited Partnership.
Why should an entrepreneur avail professional services?
For the following reasons, you should use professional services:
- The tasks are done more quickly.
- All of the records are kept in a professional way.
- The legal paperwork process has been taken care of.
- reduces the amount of work business owners and investors have to do.
- The best use can be made of the resources that are available.
What are the requirements for a wholly foreign-owned LLC in Oman?
The company must also have at least two shareholders and one director, as well as a minimum capital
