Oman boasts a high level of economic freedom with a score of 61.0 and ranking 93rd freest in the 2018 Index. The country's strong economic environment makes it an attractive destination for foreign investors looking to establish a business. Business Setup in Oman is a straightforward and efficient process that can be completed entirely online, eliminating the need for in-person visits. Foreigners are allowed full ownership in most industries, eliminating the need for a nominee shareholder and reducing the overall cost of starting a business in Oman.
As a result, establishing a company in Oman presents an appealing opportunity for foreign investors. In this piece, Innovative Digital outlines 7 key advantages of establishing a company in Oman to help determine if it is the right choice for your business.
1. Strategic Location:
Oman's advantageous geographical position places it in close proximity to the key economic hubs of Asia, Europe, and North America. As a result of this strategic location, Oman has been able to export its non-oil products to approximately 176 countries. Consequently, the prime location of Oman presents lucrative business prospects that entice foreign investors to establish their companies within the country.
2. Pro-Business Environment:
The pro-business initiatives implemented by the government of Oman have successfully attracted foreign investors to establish their businesses in the country. These initiatives aim to create a business-friendly environment by offering various incentives such as tax exemptions, interest-free loans, free trade zones, and priority in the allocation of government land.
Oman provides a business-friendly environment with no restrictions on the repatriation of capital and profits. The corporate tax rate is also relatively low, standing at 15%. Additionally, there are several exemptions available for entrepreneurs. For instance, entrepreneurs setting up a company in Oman are exempted from corporate income tax on the first OMR 30,000. Free zone registered companies enjoy even more benefits, including exemption from corporate tax for up to 50 years, as well as customs duties on the import of equipment and raw materials for production purposes.
To facilitate international trade, Oman has established trade agreements with multiple countries. One notable example is the 2009 Oman-USA Free Trade agreement, which grants United States investors the same legal rights as Omani citizens. This agreement allows them to fully own businesses in Oman and exempts them from paying tariffs on Oman-US trade.
Oman offers a total of three zones and two specific economic zones, which provide additional advantages for foreign investors. These zones offer tax holidays, import duty waivers, exemption on initial share capital requirements, and 100% foreign ownership. As a result, foreign investors are highly encouraged to establish their companies in Oman.
3. Tax incentives due to the pandemic:
In response to the COVID-19 pandemic, the Oman government has implemented a range of tax incentives. The economic stimulus package, effective from March 9, 2021, includes a five-year tax exemption for businesses in key sectors such as manufacturing, agriculture, fishing, mining, tourism, logistics, and services to promote economic diversification.
Additionally, other tax measures have been introduced, including:
- Tax exemption for hotel establishments in 2020 and 2021.
- Waiver of penalties for tax payment installments in 2021.
- Suspension of withholding tax on dividends and interest for an extra five years from 2020.
- Carry forward of tax losses incurred in 2020 without limitations.
- Reduction of tax rate from 15% to 12% for small and medium-sized enterprises in 2020 and 2021.
- Tourism businesses exempted from tourism and municipal tax until the end of 2021.
- Provision of preliminary licenses for certain businesses to allow them to operate with temporary licenses before obtaining final approval.
- Permit for immediate hiring of three expatriates upon commercial registration issuance.
4. Natural Resources:
Oman's economy has greatly benefited from its abundant natural resources, particularly oil. The increase in oil exports has significantly boosted the country's economy, leading to budget surplus, trade surplus, and ample foreign reserves.
In addition to its natural wealth, Oman has been actively working on diversifying its economy by investing in the private sector and foreign enterprises. Furthermore, its industrial diversification has resulted in a strong supply chain that supports smooth business operations.
5. Availability of Workforce:
Oman boasts a population of around 4.3 million, with 1.7 million individuals actively employed. This indicates a significant pool of available workers. Additionally, the research and development sector in Oman exhibits considerable strength.
6. Good Relations with Other Countries:
The people of Oman are renowned for their generosity, tolerance, and friendliness, which contributes to the welcoming culture of the country. This not only attracts short-term visitors but also encourages businesses to establish themselves with the support of local communities. Omani culture places great importance on fostering strong bonds and relationships, both in social and professional settings. Therefore, it is advisable for foreigners to spend time with their Omani business counterparts and make a concerted effort to establish a positive rapport with them.
7. World-class Infrastructure:
Oman boasts a robust transportation system, thanks to significant investments made to enhance its railway. Moreover, the country is renowned for its top-notch infrastructure, featuring internationally acclaimed ports, airports, and roads. As a result, foreign investors are drawn to Oman's exceptional infrastructure and efficient transport network, which are synonymous with reliability and ease of access.
Conclusion:
Upon reading this article, you will have gained a clear understanding of the benefits associated with establishing a company in Oman. If you find yourself uncertain about the procedures involved in setting up a company in Oman, Innovative Digital can provide you with their professional services. With Innovative Digital as your trusted partner, the registration process for your Business Setup in Oman will be seamless and free of any complications. Our comprehensive service package encompasses strategic planning and consultation to help you choose the most suitable business entity, handling the entire registration process, acquiring the necessary licenses, opening a corporate bank account, and ensuring compliance with government regulations.
Feel free to reach out to us for more information on how to register a company in Oman. Our dedicated and experienced team will respond to your inquiry within the next 24 hours.
