Oman corporate banking options in 2023
For over a decade Healy Consultants Group has been offering quality corporate banking options in Oman for our multinational Clients. Dealing with Omani banks can be challenging and time consuming. Our goal is to shelter our Client from any unnecessary administrative burdens, and ensure our Client does not need to travel to Oman to open the account.
About Oman's banking system
- In our experience foreign bank signatories do not normally have to travel to Oman to open a corporate bank account. Our team will work with the Client and bank to complete KYC formalities remotely. The exception to this is if the bank perceives the business to be high risk. In this case, our Client will be asked to attend a one-hour face to face meeting with the bank;
- The banking system is stable and well regulated. That said, in March 2020 ratings agency Moody’s downgraded several banks to reflect the Omani government’s ‘weakening capacity to support local banks as well as the weakening standalone credit profiles of some banks’;
- The local business banking market is much smaller than neighbouring Dubai. There are fewer quality corporate banking options for international business people;
- There are seven local banks (including BankMuscat, Bank Dhofar and National Bank of Oman), nine foreign commercial banks (including Standard Chartered and HSBC) and two sharia-compliant banks. All have their national headquarters in Muscat. These banks all offer i) multicurrency accounts ii) internet and telephone banking iii) checking and savings accounts iv) debit and credit cards v) fixed-term deposits and vi) wealth management;
- Since February 2020, Oman remains on the European Union list of non-co-operative jurisdictions for tax purposes because its banks and tax authorities refuse to share information about account holders and bank signatories with foreign governments;
- Lending rates have risen steadily over the past four years, standing at 5.5% in February 2020.
Healy Consultants' Oman corporate banking services
- Healy Consultants can open a corporate bank account for a new Oman company, and secure Internet banking approval, without our Client traveling to Oman. Our fee for this service is US$4,950. Our Client should also budget for additional costs to legalise due diligence documents at their local Omani embassy and the Ministry of Foreign Affairs in Muscat;
- Our Client should expect to receive corporate bank account numbers in 12 weeks. This long lead time is because it is likely the bank will ask for more due diligence from the bank signatory;
- Because banks enjoy ultimate power of approval over corporate account applications, guaranteed success is outside our control. What is inside our control is the preparation and submission of a high-quality bank application that maximises the likelihood of approval. If required, we will also attend a mandatory bank interview in Muscat on behalf of our Client;
- Once our Client’s preferred bank approves the account, the banking officer will i) email the corporate account numbers directly to our Client and ii) within two weeks courier the Internet banking token to our Client.
- Oman is a notoriously hard place to get credit, despite several banks offering i) bank guarantees ii) standing letters of credit iii) import and export documentary credit and iv) customer guarantees;
- SME financing is limited. Oman’s risk averse banks shy away from financing start-ups, though the government has introduced two loan programs to promote SME investments;
- Investors in industrial projects can access a Ministry of Commerce and Industry (MOCI) funding scheme. Borrowing rates are four per cent annually, and repayment terms are generous. Loan value will match equity contributions in the Muscat area, or 1.25 times for other locations. Projects with a high percentage of local content or employing large numbers of Omanis are given priority;
- Loans of up to OMR1 million (US$2.6 million) are available from Oman Development Bank (ODB) for agriculture, fisheries, petroleum, mining, and services projects.
- ODB also offers an SME loan guarantee program in partnership with commercial banks, interest subsidies, and attractive export financing rates.
Foreign exchange controls
- The Omani riyal (OMR) is pegged to the US dollar. The exchange rate has been locked at ORM1 to S$2.60 since 1986;
- There are no exchange controls and no restriction on the repatriation of capital from the country;
- There are no limits on fund inflows/outflows for profits, debt service, capital gains and returns on intellectual property or imported inputs (except for foreign bank branch dividends).