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Company Formation in Oman

Overview :

Oman is a middle-income economy that is heavily dependent on dwindling oil resources. Because of declining reserves and a rapidly growing labour force, Muscat has actively pursued a development plan that focuses on diversification, industrialization, and privatization, with the objective of reducing the oil sector’s contribution to GDP to 9% by 2020 and creating more jobs to employ the rising numbers of Omanis entering the workforce.

Tourism and gas-based industries are key components of the government’s diversification strategy. By using enhanced oil recovery techniques, Oman succeeded in increasing oil production, giving the country more time to diversify, and the increase in global oil prices through 2011 provided the government greater financial resources to invest in non-oil sectors.

Advantages of incorporating business in Oman :-
  • Available land and premises at highly competitive prices.
  • Highly developed infrastructure and transport.
  • Trained and competitively priced workforce.
  • A multicultural and multilingual workforce.
  • High level of managerial and professional skills.
  • Excellent business support services and local business partnerships.
  • International sea ports; Mina Sultan Qaboos – a major freight terminal; Salalah Port – one of the Middle    East’s largest container ports.
  • See International Airport offers direct daily flights to destinations in the Middle East, the Indian sub-continent, Europe, the Far East, Africa and the US.
  • Fast and easy access to emerging markets in the Middle East, Asia and Africa.
  • Assistance with promoting and marketing products.
  • A pro-business-oriented government.
  • Growth in inward investment.
  • WTO Member.
Tax Regime in Oman :

There is no personal income / wealth tax in Oman.

Stamp duty – Stamp duty applies only to the acquisition of real estate at the rate of 3% of the sales value.

Social security contributions – Omani private sector employees who are between 15 and 59 years of age must contribute 6.5% of their monthly salary for social security purposes (old age, disability and death).

Capital acquisitions tax – No
Real property tax – No
Inheritance/estate tax – No
Net wealth/net worth tax – No
Capital gains – No
Capital Duty – No

As from 1 January 2010, a flat 12% tax rate applies to all businesses in Oman, including branches and PEs of foreign companies. Branches and PEs were previously subject to progressive tax rates between 5% to 30%.

Types of entities

Joint stock Company :

is formed by three or more individual or entities, whose liability is limited to the nominal value of their shares in the company’s capital. If a minimum of 40% of a company’s shares are issued for public subscription it is considered as a general joint stock company (SAOG). The minimum capital required in RO 2 million (US $ 5.2 million); otherwise it is considered as closed joint stock company (SAOC) and the minimum capital required is RO 500,000 (US $ 1.3 million)

Limited Liability Company (LLC) :

is a private company formed by minimum of two and a maximum of 40 natural or legal persons, whose liability is the nominal value of their shares in the company’s capital. The minimum capital for an LLC wholly owned by Omani national is RO 20,000 (US $ 52,000) and RO 150,000 (US $ 390,000) with foreign participation.

Holding company:

is a joint stock company or LLC that holds at least 51% of the shares of another company and has financial and administrative control. The capital of the holding company shall not be less than RO 2 million (US $ 5.2 million).

The other forms of business entities are general partnerships, formed by two or more individuals or entities and limited partnerships, which are formed by one or more general partners and sole proprietorships.

Time period:-

It usually takes 8-10 days to form a company in Oman.