Benefits and problems of registering a company in Oman

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  • Benefits and problems

    Benefits of Oman company registration

    Oman business registration advantage

    1. Our Clients will find it simple to establish their preferred corporate structure in Oman because:
      • Healy Consultants Group PLC will help our Client incorporate their businesses in Oman without them needing to travel to the country;
      • In 2020, for most industries, Oman allowed 100% foreign ownership for the first time. There is no longer any need for a costly Oman nominee shareholder;
      • That said, there remain advantages to having an Omani shareholder, especially one who knows the local market and has a network of good business contacts. Healy Consultants Group PLC offers professional passive nominee resident shareholder services where needed;
      • There is no minimum share capital requirement for an Omani company;
      • An Oman limited liability company requires only one shareholder and one director, and they can be any nationality and domicile;
      • Healy Consultants Group PLC is able to furnish our client with Oman company numbers within just four weeks.
    2. Our Clients can take advantage of tax advantages including:
      • Exemption from corporate income tax on the first US$78,000 (OR30,000) taxable income;
      • The Oman Free Zone tax holiday incentive offers complete exemption from all corporate taxes for up to 10 years for Free Zone registered businesses. See this webpage for more information;
      • Eligible industrial concerns can be exempt from corporate income tax for five years, and this can be renewed for an additional five years;
      • Oman imposes no sales or personal income tax for business owners and individuals;
      • There are no customs duties on the import of equipment and raw materials for manufacturing purposes.
    3. Our Clients looking to set up and trade in Oman can take advantage of other benefits, including:
      • The ability to obtain interest-free loans;
      • The availability of serviced plots provided by the government for industrial units;
      • The government accounts for a large proportion of spending in the country. Securing a government tender is potentially lucrative. Oman’s budget expenditure for 2020 is US$34.3 billion;
      • Eligible industries can secure discounted utilities.
    4. Because of the 2009 Oman-USA Free Trade Agreement, US investors:
      • Have the same legal rights as Omani nationals;
      • Pay no tariffs on Oman-US trade;
      • Can 100% own an Omani business with no sector/industry restrictions;
      • Oman is a party to the Hague Convention on Apostilles, which simplifies document certification.
    5. Oman has a future-oriented economy:
      • Due to continued liberalisation of regulations and steady economic growth, Healy Consultants Group PLC predicts that, within 20 years, Oman will be where Dubai is today and early investors will have profited immensely;
      • Oman remains one of the world’s most competitive economies;
      • The country imposes no foreign currency controls. Businesses are free to repatriate profits and capital internationally, as required;
      • Oman has the world’s third-strongest currency;
      • There are fewer due diligence requirements placed on GCC nationals incorporating a company in Oman. In many cases, it is only necessary to produce copies of national ID cards;
      • Foreign investors can access tender bidding for government contracts through the Omani Ministry of Commerce portal. It is not necessary to do this through a local company. Should the foreign investor be awarded the tender, they need a local business entity, and will be granted a period of time to complete business setup and/or licensing;
      • Oman is strategically located on trading routes between Europe, Africa and Asia.

    Problems with Oman company registration

    1. Oman remains on the European Union’s (EU) tax haven blacklist, having failed to sign up to or implement exchange of information protocols with global tax authorities;
    2. Clients doing business in Oman are faced with operational cost-related challenges. For example:
      • A 10% withholding tax is imposed for dividends, interests and technical services fees paid to non-resident entities;
      • A 55% corporate tax rate is levied on companies selling petroleum;
      • Small business are subject to tax and are required to file annual returns;
      • Oman plans to introduce 5% VAT from early 2021;
    3. Government regulation challenges include:
      • Omanisation, in which companies are required to have between 15% to 60% of their workforce as Omani nationals. Finding suitably qualified Omani employees can be a challenge;
      • Because of Omanisation, it becomes harder to recruit foreign talent. Some industries therefore face skills shortages;
      • A branch office structure is limited only to companies that have secured a specific government tender. The branch office expires immediately after the end of the tender period;
      • Only foreign companies that have been incorporated for at least three years can be appointed as corporate shareholders. Proof of incorporation and latest audited financial statements must be submitted for approval;
      • Legislation favours Omani nationals.
    4. Investors interested in setting up a business in Oman may face market challenges because: i) it only has a population of five million ii) it neighbours much larger economies such as the UAE and Saudi Arabia with significant competition and iii) the country does not provide the same level of industrial subsidies to companies compared to other GCC states;
    5. Every Oman company must appoint an Omani Public Relations officer. Finding someone to fulfill this role can be very time consuming.
  • Best uses for an Oman company

    1. An Oman LLC is used by global Clients looking to enter the local oil and gas services industry, including upstream and downstream sectors, as well as mining and infrastructure development.

Contact us

For additional information on our business registration services in Oman, please contact our in-house country expert, Mr. Petar Chakarov, directly:
client relationship officer - Petar
  • Mr. Petar Chakarov
  • Client Engagements Manager
  • Contact me!