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company registration in oman

Register Company in Oman

Innovative Digital provide comprehensive assistance to clients looking to establish a company in Oman. Our services encompass company registration in Oman, setting up corporate bank accounts, and managing accounting and tax requirements. Innovative Digital offers a complete solution for those seeking to initiate a business in Oman.

Register company in Oman: Introduction

If you are well-versed in the process of incorporating a company, registering a company in Oman can be a hassle-free task. However, with Innovative Digital leading the way, you can entrust us with the responsibility, allowing you to focus your time and resources on more crucial aspects.

Our team of experts adopts a lean-and-mean approach, ensuring a smooth and seamless experience throughout the entire company registration process in Oman. Our primary objective is to ensure that your business is operationally prepared within the designated timeframe.

Our comprehensive service package encompasses all the necessary requirements for Business Setup in Oman, including:

1. Registering your company with the Ministry of Commerce and Industry in Oman.
2. Providing a local company secretary and a registered address.
3. Assisting with the opening of a corporate bank account.
4. Offering annual accounting and tax services.

By availing our services, you can rest assured that all your business setup needs in Oman will be taken care of efficiently and effectively.

How long to register company in Oman and open a corporate bank account?

  • Innovative Digital guarantees a smooth and hassle-free process for registering your company in Oman. Once we receive the necessary due diligence documents from the directors and shareholders, we will conduct a thorough search to ensure that your preferred company name is available.

  • The entire company registration process in Oman can be completed remotely, eliminating the need for you to travel to the country. Within a period of 6 weeks, you can expect to receive all the relevant documents for your new company, including the certificate of formation, Memorandum and Articles of Association, as well as the registry of directors and shareholders.

  • Upon successful company formation, Innovative Digital will provide assistance in opening a corporate bank account. Depending on your long-term goals and objectives, we can help you open an account with a local bank or an overseas global bank. The process of opening a bank account for foreigners in Oman typically takes around 4 weeks to complete.

  • As a result, you can anticipate commencing your business operations and issuing invoices within 10 weeks of engaging Innovative Digital. Our team of Chartered Accountants will ensure that your newly established company remains compliant with the regulatory laws set by the local Tax Authority. This includes providing monthly bookkeeping services, preparing financial statements, and filing annual tax returns.

Can a foreigner register company in Oman?

  • The government provides foreign investors with a range of choices for the types of business entities available for Oman company formation. Innovative Digital is ready to guide you through the necessary steps and requirements for establishing a Business Setup in Oman.

  • In general, a foreign-owned business in Oman can be fully owned by foreigners as long as they do not engage in activities listed in the blacklist by the Ministry of Commerce and Industry. The blacklist covers industries like transportation, tailoring, vehicle repairs, salon services, fishing, retail sale of souvenirs, antiques, and paintings.

  • The registration fee and minimum capital needed for a 100% foreign-owned company are higher compared to a standard company. For LLCs, the minimum capital required is OMR 150,000 if the company is fully foreign-owned.

  • There is no mandatory requirement for a local resident director or shareholder.

  • When selecting the most appropriate entity type, it is crucial to consider factors such as personal liability protection, tax implications, ownership and management flexibility, and compliance requirements. Each business entity has its unique characteristics.

  • Before commencing the process, Innovative Digital will thoroughly assess your business to recommend the most suitable business entity.

  • Factors we consider include the nature of the business activity, tax responsibilities, and the nationalities of shareholders and directors. Our consultants will also provide detailed information on the prerequisites for establishing these entities.

Types of entity structure to register company in Oman

Innovative Digital is here to provide expert guidance in selecting the most suitable business entity for registering your foreign company in Oman. In Oman, there are four primary types of company registration options available, which include the establishment of a Limited Liability Company, Limited Partnership, Branch Office, and Representative Office.

Limited Liability Company (LLC)

  • A Limited Liability Company (LLC) is the most common legal entity established in Oman.

  • By forming an LLC, you can enjoy protection from liabilities and have a regulated access to capital.

  • Primarily favored by large businesses, an LLC allows for easy transfer of shares.

  • Shareholders are safeguarded based on their capital contribution. With limited liability for shareholders, you won't be held responsible for the debts and obligations of the company in case of liquidation.

  • Certain activities like banking, insurance, and investment operations are restricted for LLCs.

  • To set up an LLC in Oman, you need at least 2 limited partners. A foreign partner can own a maximum of 70% of the company's capital and can participate in managing day-to-day operations.

  • The minimum capital required for your LLC will vary based on the nationality of the directors. Omani or Gulf Cooperation Council nationals have a minimum requirement of OMR 20,000, while mixed shareholding with foreigners requires a minimum of OMR 150,000.

Limited Partnership

  • A limited partnership can be established by having one or more general partners who are fully liable for the debts, along with one or more limited partners whose liability is restricted to their capital contributions.

  • In a limited partnership structure, the general partner has the authority to manage the business, while limited partners do not have management responsibilities.

  • Typically, when setting up a limited partnership in Oman, it is necessary for the general partner to be a national of Oman or a member of the Gulf Cooperation Council.

  • Foreign individuals are allowed to participate as silent partners without involvement in the management of the business. There is no specific minimum capital requirement for forming a limited partnership.

Branch Office

  • A branch office serves as an extension of its foreign parent company and is authorized to engage in trade activities as outlined by the parent company. It does not possess a separate legal identity, meaning any debts or obligations are the responsibility of the parent company.

  • In addition to trade activities, a branch is commonly established to streamline the financial results of the parent company.

  • To establish a branch, the foreign company must have a contract with a government entity or state-sponsored company. There are no specific minimum capital requirements for the setup.

Representative Office

  • A representative office, much like a branch office, can be fully owned and controlled by foreigners.

  • Nonetheless, a key distinction is that a representative office is not permitted to engage in local sales activities, and is mainly intended for disseminating information and promoting the parent company's products or services.

  • It is recommended to utilize a representative office for market research purposes.

  • Setting up a representative office involves few requirements, with no specific minimum paid-up share capital needed. However, it is essential to have a designated manager in place to oversee operations.

How to register company in Oman?

Step 1: Choosing an optimum business structure to register company in Oman
Step 2: Reservation of company name
Step 3: Preparation and submission of relevant documents to register company in Oman
Step 4: Tax Registration and other relevant registration
Step 5: Creation of company seal 
Step 6: Corporate bank account opening after you register company in Oman

Step 1: Choosing an optimum business structure to register company in Oman

  • Before proceeding with the registration of your company in Oman, it is crucial to select the appropriate company type.

  • Depending on your business model and future objectives, Innovative Digital will guide you in determining the most suitable business entity, required paid-up capital, corporate framework, and necessary business permits like the municipality license if needed.

  • Typically, Innovative Digital would suggest opting for LLC company registration in Oman, as it is the prevalent legal structure in the nation and can be established with just one shareholder.

Step 2: Reservation of company name

  • Innovative Digital specializes in conducting thorough searches and facilitating the seamless registration of company names in Oman. Our team is well-versed in navigating the Commercial Registry of the Ministry of Commerce and Industry to ensure a smooth and efficient process for our clients.

Step 3: Preparation and submission of relevant documents to register company in Oman

  • Innovative Digital is ready to support you in the preparation of the necessary paperwork for registering a company in Oman with the local registration authority. These documents will consist of a draft of the Memorandum and Articles of Association, a business plan, and other essential incorporation papers.

  • Typically, the Constitutive Documents must be in Arabic. Hence, Innovative Digital will collaborate with a skilled translator to ensure accurate translation of your documents.

  • After the successful registration of your company, Innovative Digital will dispatch the Certificate of Incorporation, Memorandum and Articles of Association, and other relevant corporate documents to your chosen address. Your Oman company registration number will be indicated on the Certificate of Incorporation.

Step 4: Tax Registration and other relevant registration

  • After obtaining the Certificate of Incorporation, our team will proceed to register your business with the Tax Department at the Ministry of Finance.

  • Subsequently, we will also initiate the registration process with the local Royal Police, Muscat Municipality, and Ministry of Manpower as required.

Step 5: Creation of company seal 

  • In Oman, every company must have a company seal approved by the authorized signatory. To comply, you must gather and provide necessary documents like a Chamber of Commerce and Industry Affiliation certificate, authorized signatory form, and a certificate of initial capital deposit. Innovative Digital can help you meet these requirements and arrange for the creation and procurement of a company seal through an external supplier.

Step 6: Corporate bank account opening after you register company in Oman

  • The documents needed to open a corporate bank account may vary depending on the structure of your business. 

  • Innovative Digital can assist you in gathering the necessary documents and facilitate the process of opening a corporate bank account with a trusted bank of your preference. 

  • In most cases, there is no need for the directors and shareholders to personally visit the jurisdiction to open the account. However, if travel becomes necessary, our team will arrange for a representative to accompany you to the bank meeting.

Post-Incorporation Process

  • After completing the company registration process in Oman, there are various post-incorporation procedures that need to be carried out to adhere to the laws and regulations of the country. Below are some of the key post-incorporation procedures for a company that has been registered in Oman:

1. Acquiring a Tax Card: Companies in Oman are required to obtain a Tax Card from the Tax Authority within 30 days of registration. The Tax Card is essential for activities such as opening bank accounts, entering into contracts, and filing tax returns.

2. Enrolling for Social Security: Within 15 days of commencing employment, companies in Oman must enroll their employees with the Public Authority for Social Insurance (PASI). Employers have the responsibility of contributing to the social security fund on behalf of their employees.

3. Registering for Value Added Tax (VAT): If a company's annual turnover exceeds OMR 38,500 (approximately USD 100,000), it must register for VAT in Oman. The VAT registration process involves obtaining a VAT registration number and submitting regular VAT returns.

4. Securing Licenses and Permits: Depending on the nature of the business, companies in Oman may need additional licenses and permits to operate legally. For instance, a construction company might require a building permit from the Ministry of Housing and Urban Planning.

5. Maintaining Company Records: Companies in Oman must keep accurate and updated records of their financial transactions, which include invoices, receipts, and contracts.

Accounting and tax obligations

  • Many international clients choose Innovative Digital for their accounting and tax services in Oman. By entrusting your accounting and tax responsibilities to us, you can rest assured that you are in capable hands. Our team of experts will guarantee that your company's financial statements, corporate tax returns, and audits are completed promptly, eliminating the need for you to travel.

  • Moreover, by outsourcing your accounting and tax requirements to Innovative Digital, you can lower your overhead costs while still receiving timely and accurate reporting and filings.

  • Prior to commencing the partnership, our accounting team will keep you informed about all necessary deadlines and expectations. Subsequently, we will prepare all essential filings in advance to ensure that deadlines are met as required.

Annual reporting requirements

  • In Oman, the financial fiscal year aligns with the calendar year. Newly established companies have the option to choose a 12-month opening period or extend it to a maximum of 18 months.

  • Within 6 months after the conclusion of the financial year, Omani companies must submit an annual income tax return along with audited financial statements and any applicable taxes.

  • According to local laws, accounting records must be maintained for a minimum of 10 years prior to the end of the accounting period.

  • All companies are generally expected to follow the International Financial Reporting Standards when preparing their financial statements. These statements should include information on the financial position, income, changes in equity, and cash flows.

  • Additionally, it is mandatory for the financial report to be submitted in Arabic language. To ensure compliance with this requirement, TInnovative Digital will appoint a professional translator who will ensure that your report meets all the necessary criteria.

Corporate income tax

  • Generally, all companies in Oman are obligated to pay a Corporate Income Tax rate of 15%. However, oil companies will be subject to a higher corporate tax rate of up to 55%. 

  • On the other hand, small and medium-sized enterprises may qualify for a reduced Corporate Income Tax rate of 3%. To be eligible for this reduced rate, your small or medium-sized enterprise must meet the following criteria:
  • Have an authorized share capital that does not exceed OMR 50,000
  • Have a gross income that is less than OMR 100,000
  • Employ fewer than 15 individuals
  • Not be engaged in any transportation, natural resource extraction, banking, insurance, or financial services activities.

Dividend distribution tax

  • When distributing dividends to non-residents, there will be no withholding tax imposed. Nevertheless, a 10% withholding tax will apply to payments made to foreign companies that do not have a permanent establishment in the jurisdiction.

Capital gains tax

  • Innovative Digital can provide you with guidance and support in applying for the tax considerations related to capital gains, which are subject to a 15% tax rate.

Why register company in Oman?

Political

  • The local government is continuously seeking ways to enhance the economy, with a focus on strengthening diversification efforts, particularly in the tourism sector.

  • Despite his strong leadership in managing both domestic and foreign affairs, Qaboos' rule in Oman was marked by economic challenges and widespread political discontent.

  • Transparency International's 2020 Corruption Perceptions Index ranks the nation 54th out of 180 countries in terms of public sector corruption levels.

Economic

  • Oman has established strong bilateral ties with the United States, fostering excellent relations between the two nations. As a result of these relations, a free-trade agreement has been established, effectively removing tariff barriers.

  • In terms of business opportunities, American investors are granted equal treatment as Omani investors. This allows them to enjoy the same benefits of full foreign ownership and no capital limitations when conducting business within the country.

  • Furthermore, Oman's domestic economy has been strengthened through diversification and foreign investment. This is evident in the establishment of various ports and free zones, including the notable Sohar.

Social

  • Oman is considered a secure country and plays a significant role as a regional ally in counterterrorism efforts, as stated by the Overseas Security Advisory Council.

  • Arabic is the official language of Oman. The 2020 English Proficiency Index by Education First ranks the nation 98th out of 100 in terms of English proficiency among its population.

  • Internal ethnic conflicts are present in the country and have the potential to disrupt its stability.

Technological

  • The Oman Technology Fund is dedicated to fostering innovation and supporting the growth of the Information and Communications Technology sector. In addition to this, the government has implemented The Government Innovation Initiative, which aims to promote innovation and creativity by incorporating technology in various government entities.

  • Furthermore, the Royal Oman Police has successfully implemented the use of drones to combat the Coronavirus Disease 2019, showcasing their commitment to utilizing advanced technology for the benefit of public health and safety.

Legal

  • Oman relies on Islamic law as the foundation of its legislation, but it consistently updates its laws and regulations to create a flexible and business-friendly environment.
  • The nation's free zones are geographically distinct and operate as separate legal jurisdictions, each with its own set of regulatory laws.
  • It is important to note that according to Oman Labour Law, employment contracts must be written in Arabic. This requirement may pose challenges if your business operations are based in the country.

Environmental

  • Oman is renowned for its unwavering commitment to environmental preservation. By releasing a comprehensive document on environmental protection and development in the Arab world, the country demonstrates its dedication to adhering to a guiding framework aimed at safeguarding the environment.

  • In 2017, Oman unveiled its ambitious initiative to construct the inaugural wind farm in Harweel, located in the Dhofar Governorate. This project serves as a significant step towards promoting the utilization of sustainable energy sources.

  • Furthermore, the state-owned Petroleum Development company has expressed its aspirations to embark on additional solar power ventures within the nation. These endeavors aim to further enhance Oman's energy consumption through the utilization of renewable resources.

Find out more about how to register company in Oman

Please get in touch with us for further information on the process of company registration in Oman. Our team of skilled professionals will respond within 24 hours to address any questions you may have.

FAQ

What is the best business setup in Oman?

  • Consider exploring the agriculture and technology industries in Oman as profitable sectors to invest in. The local government is focusing on expanding non-oil sectors like agriculture to reduce reliance on oil exports. Buying farming land in Oman is cost-effective, and starting an agriculture business locally may make you eligible for grants or interest subsidies from banks.

  • The IT and technology industry in Oman is also a promising sector to establish a company in, with numerous business opportunities due to its growth. The government has established a Technology Fund to support entrepreneurs in incorporating IT and tech companies that can introduce technical innovations in the country. Therefore, starting a tech-related business in Oman will provide access to increased investment capital and grants.

  • Alternatively, entrepreneurs can explore the option of setting up commodity stores in Oman. Companies operating in free zones are exempt from import duties, making it profitable to establish a commodity store for selling imported goods.

What is the minimum capital required for company registration in Oman?

  • The capital required for company registration in Oman varies depending on the type of company and its activities. For a Limited Liability Company (LLC), the most common type of company in Oman, a minimum capital of OMR 20,000 (approximately USD 52,000) is required, with at least 30% of the capital to be paid up at the time of registration. On the other hand, a Joint Stock Company (SAOG), which is 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 keep in mind that these are just the minimum capital requirements, and companies have the option to invest more capital based on their specific business needs and objectives. Additionally, the registration process and requirements may vary depending on the type of company and its activities. To ensure compliance with the regulations, it is recommended to seek guidance from Innovative Digital' team of business setup experts.

What is the main regulatory authority for company registration in Oman?

  • The Ministry of Commerce, Industry, and Investment Promotion (MOCIIP) in Oman is the key regulatory body overseeing company registration. It plays a crucial role in facilitating the registration process for both new and existing companies. Various departments and agencies under the ministry, such as the Department of Commercial Registration, the Directorate General of Investment Promotion, and the Public Authority for Investment Promotion and Export Development, are responsible for different aspects of the registration process.

  • The Department of Commercial Registration focuses on registering businesses and issuing commercial licenses, while also maintaining a commercial register with information on registered companies. The Directorate General of Investment Promotion promotes foreign investment in Oman and assists in establishing foreign companies in the country. On the other hand, the Public Authority for Investment Promotion and Export Development works towards promoting Omani products and services in international markets and attracting foreign investment.

  • In summary, the MOCIIP serves as the primary regulatory authority for company registration in Oman and plays a vital role in promoting investment in the country.

How much does it cost to start a business setup in Oman?

  • The incorporation of a foreign-owned Limited Liability Company requires a minimum shared capital of OMR 150,000. The engagement fees charged by Innovative Digital will vary based on the specific services requested. Our fees encompass government fees and will be explicitly outlined in our engagement letter before commencing the engagement. At Innovative Digital, we prioritize transparency with our esteemed clients, ensuring no concealed charges.

Is a company secretary necessary to incorporate a business in Oman?

  • No, it is not mandatory to have a company secretary. Nevertheless, Innovative Digital can offer you the support of a local secretary who will assist you with your annual tax filing and accounting obligations.

Do I need a resident director to incorporate a business in Oman?

  • No, it is not mandatory for a resident director to incorporate in Oman. The nationality of directors in an Oman business is not a requirement.

What are the minimum requirements to set up an LLC in Oman?

  • In order to establish an LLC in Oman, it is necessary to have a minimum of 2 shareholders and 1 director. The director and shareholder can be of any nationality, as there are no specific requirements in this regard. Additionally, the company must have a registered 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?

  • Prior to this, commercial companies were limited to 70% foreign ownership of share capital. However, with the implementation of the new Foreign Capital Investment Law in 2020, specific sectors now have the opportunity to have 100% foreign ownership.

  • Companies are eligible to apply for complete foreign ownership through the Oman Chamber of Commerce and Industry, as long as they do not engage in business activities listed on the blacklist issued by the Ministry of Commerce and Industry. The blacklist comprises activities in protected sectors like transportation, tailoring, vehicle repairs, salon services, fishing, retail sale of souvenirs, antiques, paintings, and more.

How many Free Zones are there in Oman?

  • Oman boasts three distinct Free Zones, namely the Salalah Free Zone, Sohar Free Zone, and Al Mazunah Free Zone. Additionally, the nation is home to two Special Economic Zones: the Duqm Special Economic Zone and Knowledge Oasis Muscat. Enterprises that establish themselves within these free zones can relish in the advantages of 100% foreign ownership, tax benefits, exemption from customs duties, and various other financial incentives.

Is there sales tax in Oman?

  • The Oman Tax Authority has recently introduced a 5% Value-Added Tax (VAT) on non-essential goods and services, effective from April 2021. Businesses with an annual value of supplies exceeding OMR 38,500 are obligated to register for VAT.

Is there personal income tax in Oman?

  • Oman does not impose personal income tax, meaning that income from capital gains, wealth, death, or property is not taxed. Nevertheless, non-resident individuals may face a 10% withholding tax on particular types of income.

How can I start an LLC in Oman?

  • To establish your LLC in Oman, it is required to have at least two limited partners. However, if you are a foreign partner, you are only allowed to own a maximum of 70% of the company's capital and can be involved in the day-to-day operations.

  • The minimum capital requirement for your LLC will vary depending on the nationality of your directors. For Omani or Gulf Cooperation Council nationals, the minimum requirement is OMR 20,000. On the other hand, if you have mixed shareholding with foreigners, the minimum requirement increases to OMR 150,000.

  • At Innovative Digital, we are here to guide you through the entire process of starting an LLC in Oman. Our team will assist you in preparing all the necessary documents for incorporation, including the draft of the Memorandum and Articles of Association, business plan, and other relevant incorporation documents.

  • Once your company is successfully registered, we will promptly send you the Certificate of Incorporation, Memorandum and Articles of Association, and other important corporate documents via courier to your preferred address.

  • Furthermore, Innovative Digital will provide support in tax registration, the creation of the company seal, and opening a business account with a reputable bank. We are committed to ensuring a smooth and efficient process for your LLC establishment in Oman.

How can I start a business setup in Oman free zone?

  • Once your company is registered with the Ministry of Commerce and Industry, you can move forward with establishing your business in a Free Zone under the jurisdiction of the local authority.

  • Innovative Digital offers a convenient and efficient solution for launching your company in an Oman Free Zone. Our comprehensive package covers company registration, appointment of a local resident director and company secretary, provision of a registered address, assistance with opening a business bank account, and ensuring compliance with annual accounting and tax requirements. Depending on the nature of your business operations, Innovative Digital will advise you on the most suitable Free Zone for your company setup.

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