Accounting and legal

Accounting and tax

Oman accounting tax legal and compliance servicesHealy Consultants Compliance Department assists our Clients efficiently and completely discharge their annual Oman accounting and auditing obligations. This is what our Clients need to know:

  1. Oman companies are taxed at a flat 12% for both domestic and international income streams. There are no personal income taxes;
  2. Branch companies are taxed at 30% for profits above US$260,000;
  3. There are no taxes on i) dividends ii) interest or iii) VAT. Royalties for foreign companies without local partner are withheld at 10%. Capital gains are treated as standard income and are taxed at the flat 12%;
  4. Employer contributions for social security are 10.5% for Oman nationals covering social security and health care. Omani citizens must contribute 6.5% of their monthly salary for social security;
  5. There is a 3% municipality stamp tax on acquisition of commercial and residential property;
  6. Only oil, gas and petrochemical companies are required to pay taxes of 55% of profits;
  7. Oman companies are required to file audited financial for income tax declaration within three months of the end of the accounting year. Taxes must be paid within three months from the date of this filing;
  8. An Oman LLC can enjoy tax exemption if incorporated within in one of the two Omani free trade zones. If in an FTZ, an export-oriented company is indefinitely exempted from all local, state and federal taxes;
  9. There is a 5% customs duty on most commercially imported items into Oman. All goods imported into Oman for commercial use require customs clearance through the Directorate General of Customs which may only be obtained upon payment of 5% duty. If an importer fails to settle the duty, the customs authorities are empowered to sell the goods to recover the due amount;
  10. Oman has Double Taxation Avoidance Agreements (DTA) with 28 countries including: Algeria, Brunei, China, Canada, Croatia, France, India, Iran, Italy, Korea, Lebanon, Mauritius, Moldova, Morocco, Netherlands, Pakistan, Seychelles, Singapore, South Africa, Sudan, Syria, Thailand, Tunisia, Turkey, UK, Uzbekistan, Vietnam, Yemen and a free trade agreement with the USA;
  11. Healy Consultants Compliance Department assists our Clients to efficiently and completely discharge the annual accounting and auditing obligations of their Omani company through the following: i) documenting and implementing accounting procedures ii) implementing financial accounting software and source for Oman accountants and iii) preparing forecasts, budgets and sensitivity analysis to better manage financial obligations and ease the process of reporting to the Oman accounting authorities.
  12. In accordance with The Law of income tax in Oman via Sultani Decree No. 47 of 1981 each Omani entity must register for corporate tax at the Ministry of Finance in Oman. at the Healy Consultants will be happy to assist you with tax and VAT registration for a one time fee of US$750;
  13. For an active trading company, these accounting and tax fees are an estimate of Healy Consultants fees to efficiently and effectively discharge your annual company accounting and tax obligations. Following receipt of a set of draft accounting numbers from your company, Healy Consultants will more accurately advise accounting and tax fees. For a dormant company, Healy Consultants fees are only €950;
  14. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Legal and compliance

  1. The Commercial Code of Oman (“The Code”) was established in 1974 and covers establishment, structure and governance of private business in Oman;
  2. According to the Commercial Code, an Oman company must have at least one director and two shareholders;
  3. The legal framework of Oman is a dual acting system which comprises of mainly Islamic Shari’a and aspects of absolute hereditary monarchy. The cornerstone of the system is the “Basic Statue of Oman” (1996). The Shari’a courts hold precedence, especially in matters involving Muslims;
  4. In accordance with the The Commercial Companies Law no. 4/1974, each Oman LLC must have at least one individual shareholder ordinarily resident in Oman, holding at least 30% of the company shares. If our Client requires nominee services, Healy Consultants will be pleased to assist. Our fee for corporate nominee shareholder amounts to US$1,800 per annum. Our fee for a non-resident individual nominee director or shareholder amounts to US$3,600 per annum. Our fee for a country resident director or shareholder amounts to US$14,600 per annum;
  5. It is compulsory for every Oman LLC to appoint a Public Relations Officer (PRO) in Oman. To minimize complexity and costs, Healy Consultants recommends our Client appoint an existing Oman staff member already in Oman. Monthly responsibilities of the PRO include i) liaison with Ministry of Manpower Oman; ii) applying for business visas and iii) planning, developing and implementing PR strategies;
  6. Oman company directors are appointed, replaced and dismissed by the shareholders. Only the directors have the power to manage the day-to-day operations of the company. The identities of shareholders and directors are on the public registrar of companies at the Ministry of Commerce and Industry;
  7. The Memorandum of Association is a contract between the shareholders and comprises i) company activities ii) registered office address iii) shareholder and director details iv) share capital v) profit distribution method;
  8. Each Oman entities must appoint a manager. The manager is appointed by the memorandum of association (MOA) or by a separate management contract. Unless otherwise stated in the MOA, the company manager shall enjoy full powers of administration, and his acts shall be binding to the company, provided that it is supported with stating the capacity he enjoys;
  9. Every companies must lodge an annual audited financial accounts confirming relevant details of the company for the public register including names and addresses of all directors, address of principal place of business, details of shareholders and their shareholdings and an estimate of annual taxable profits;
  10. All business activities conducted in Oman receive government approvals and permits and licenses. There is an obligation to register particular products with the government, including food, medical equipment, cosmetics, medicine;
  11. Oman is a full member of i) the World Intellectual Property Organization (WIPO) (1997) ii) World Trade Organization (WTO) (2000) iii) the Paris Convention iv) the Patent Cooperation Treaty (PCT) v) the WIPO Copyright Treaty vi) the WIPO Performances and Phonograms Treaty (WPPT), vii) the Rome Convention, and viii) the Gulf Cooperation Council (1980);
  12. Foreign entrepreneurs may only conduct business in Oman after it is licensed to so by the MOCI’s Foreign Capital Investment Committee (unless exempted for doing government contracts). The MOCI is the statutory body that regulates and controls the licensing procedures for all Oman business entities. Every Oman entities must apply for one of the following licenses:
    • A trade license for buying and selling of goods including wholesale or retail trade enterprises, contractors, hotels, transport and storing establishments etc;
    • An industrial license to discover natural resources or transform raw materials into manufactured products;
    • A commercial or professional license to practice any profession such as engineering consultancy, auditing and accounting, business set up, medical and educational services.

  13. The Ministry of Commerce and Industry (MOCI) does not permit two different classified business activities under one license e.g. trading and manufacturing;
  14. Each time a change occurs in the particulars of the company or to its officers, the change must be lodged with the Oman companies registry;
  15. The process of deregistering a company is dictated by the government. This process will take a minimum of six months. Healy Consultants fee to project manage company de-registration is US$1,450. During this six months period it is mandatory to maintain a resident company secretary and a legal registered office.

Recruitment

  1. Recruitment of foreign labour requires the employer to justify the hiring of the foreign worker in place of an Oman national. The foreign employee is expected, but not required, to have professional and educational qualifications relevant to the position;
  2. When employing local or foreign workers, employers must make sure to stay compliant with the 2003 Oman Labour Law, the main set of laws governing labour in Oman. The current labour laws most resemble the English system of labour laws, in terms of employer responsibilities;
  3. Companies located outside the free zones are required to hire at least 30% Omani nationals;
  4. Recruitment of foreign labour requires the company to apply for an expatriate quota. Applications require the company to give evidence that the skills and competencies required for the job are in short supply or not available locally;
  5. Employers in Oman are required to contribute towards their employees Retirement Savings Account, with the minimum rate being 10.5% of the employees compensation.

Contact us

For additional information on our accounting and legal services in Oman, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Petar Chakarov, directly:
client relationship officer - Petar