Employing in Oman: What You Need to Know
Oman’s Labor Law is stipulated by the Royal Decree 35/2003, and is issued by the Sultanate of Oman regarding all laws pertaining to Labor and employment-related issues. Employment laws in Oman and any amendments are implemented through royal decrees and ministerial decisions, which reflects the constantly changing nature of laws governing employees and employers in Oman. For most types of workers Omani or non-Omani, the Omani Labor Law applies to all except for civil servants, military or domestic service employees.
Key Factors to Consider When Employing in Oman
Oman has implemented a policy of Omanization which regulates the employment of expatriate labor. Many systems and policies for employment in Oman places heavy restrictions on the number of foreign nationals employed, aiming to give priority for Omani workers, in addition to industry-specific quotas which require certain private sectors to have a significant proportion of Omani employees in the industry. Employers should be aware of these measures when employing in Oman.
The private sector is regulated by several sources of power, including the Constitution, Labor Law, Ministry of Manpower (Ministry of Labor) ministerial decisions, and the Social Insurance Law.
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Contracts
The rules governing the Omani employment contract is outlined in the Oman Labor Law issued in accordance with the Sultan’s Decree no.35/2003. The contract of employment must be written in Arabic, or a translation must be formalized and notarized in Arabic. A written contract is not required, although the employee should prove his rights that such an employment relation has been entered into by all means of evidence.
The employment contract must contain the following:
- Name of the employer, establishment and address of work
- Name of the worker, date of birth, qualifications, occupation, place of residence and nationality
- Nature and type of work
- Period of contract
- Basic salary and any allowances or advantages
- Suitable period of notice to terminate the contract
An additional legal requirement for a valid employment contract is to respect the Islamic religion, laws of the country, customs and social traditions in Oman. All prejudicial activity against the security of the country is unlawful.
Types of Employment Contracts
Fixed Contract
Fixed contracts are legally valid for a fixed duration and are more applicable for situations where the employee is hired for projects that require a specific period of time to complete. The fixed contract automatically terminates on the date of termination or expiry date, although may be considered as renewed with the same terms of both parties continue the employment arrangement as if it were still in place.
Indefinite Contract
Indefinite or unlimited contracts are agreed to be valid for an indefinite amount of time as long as both parties are continuing the employment arrangement. There is no expiration date for the indefinite contract, where termination requires given notice and a “reasonable and fair” cause to be provided if it is termination by the employer.
Employee Entitlements
| Information | Explanation |
|---|---|
| Statutory Working Hours ? | The Labor Law stipulates that a maximum of nine working hours per work day in a five work day week applies to all employees, giving 45 hours per week maximum. During the period of Ramadan, there is a 36 hours a week maximum for Muslim employees at a six hour working day. At least half an hour rest break from work must be given per day, and continuous work must not exceed six hours. In any given week, twenty four consecutive hours of rest is required. Any work exceeding the regular work hours must attract at least 25% surplus to their ordinary salary, or permission to take absence in lieu of those extra hours worked. |
| Paid Public Holidays ? | The employee is entitled to the gross salary payable for any holidays of festivals or occasions determined by the Minister as an official holiday in Oman. Any holiday dates coinciding with an employee’s annual leave day does not allow for any additional compensation. The employee may also be asked to work on an official holiday under certain circumstances, and is entitled to at least a 25% excess payment of his/her gross salary, or substitute a work day for a rest day.
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| Time Off Work ? | An employee is entitled to leave with gross salary for special circumstances, such as three days’ for marriage or a death in the family and fifteen days for religious pilgrimage or examinations. |
| Medical Leave ? | Sick leave is subject to the provisions of the Social Insurance Law, and must be proven with a valid medical certificate stating the reason for sickness or absence, referable to the Medical Committee. Sick leave may not exceed ten weeks per year. |
| Annual Leave Accrual Entitlement ? | The employee is entitled to an annual leave with basic salary remuneration for a period of fifteen days once he/she has completed a full year of continuous service with the employer, and is entitled to thirty days of paid annual leave per year for subsequent years. The employee’s annual leave may be scheduled by the employer according to work requirements, although may be delayed at the discretion of the employer for one year. Employees must take at least two weeks’ leave once every two years at the minimum. For any leave not taken by the employee, it may be compensated with the basic salary if agreed upon in writing. Employees who terminate their employment are also entitled to the basic salary of the remaining leave days if there are any outstanding annual leave days. In addition, all employees have the right to a four day emergency leave with gross salary during the year, with each leave not exceeding two days.
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| Maternity Leave in Oman ? | The employee, upon presenting a valid medical certificate showing delivery date, is entitled to six weeks’ leave before and after delivery.
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| Employment Termination in Oman ? | Termination of employment and the provision of a notice period are explicitly covered in the Omani Labor Law for unlimited period contracts, which is thirty days’ written notice for employees receiving monthly salaries, and fifteen days for any other arrangements unless specified in the contract. Failure to provide a notice period will require the compensating party to pay the gross salary the notice period. |
Employment Termination
| Information | Explanation |
|---|---|
| Resignation / End of Service Payment ? |
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| Severance / Redundancy Pay ? | Termination of a fixed contract prior to the expiry date is generally not allowed until the project has been completed, except for the cases of grave violation of conduct outlined in Articles 40 and 41 of the Labor Law for employers and employees respectively. In these situations, a notice period is not required. The following applies to those who are not under the provisions of the Social Insurance Law, which are typically non-Omani employees. Upon termination of the employment relationship that are not due to a violation of conduct under Articles 40 and 41 of the Labor Code, the employer is obliged to pay the employee an end of service gratuity based on the employee’s basic salary, equivalent to fifteen days’ salary for each year of service for the first three years, and a one month salary for each year for the following years. For employers registered with the Public Authority of Social Insurance, the Omani employees are entitled to the pension fund if the total contributions made by the employer exceed the gratuity payment. |
| Termination of Employment ? | Termination of employment and the provision of a notice period are explicitly covered in the Omani Labor Law for unlimited period contracts, which is thirty days’ written notice for employees receiving monthly salaries, and fifteen days for any other arrangements unless specified in the contract. Failure to provide a notice period will require the compensating party to pay the gross salary the notice period. Termination of a fixed contract prior to the expiry date is generally not allowed until the project has been completed, except for the cases of grave violation of conduct outlined in Articles 40 and 41 of the Labor Law for employers and employees respectively. In these situations, a notice period is not required.
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Probation
| Information | Explanation |
|---|---|
| Probation Period ? | Employees are subject to probation for a period of three months or less for those who receive monthly salaries, and a one month probation period for those who receive salaries at other intervals. If the probationary period is successfully passed, it will be counted in the period of service. A seven day notice may be provided from any party to the other to indicate the termination of the contract during the probationary period. An employer terminating the employee during his/her probation period must provide substantive, detailed reasoning in the form of a dismissal letter if terminating during the probation period. |
Pension
| Information | Explanation |
|---|---|
| Pension ? | The Omani Social Security System covers all Omani citizens between the age of 15 and 59 who have a permanent job contract and are employed in the private sector. |
| Pension Requirements ? | Workers who come from another Gulf Cooperation Council (GCC) country are also covered by the scheme. The employee has 6.5% of their basic salary deducted, while the employer contributes an additional 9.5% to the government’s social security scheme. The employer must also contribute an additional 2% to the employee’s pension fund and an additional 1% as contributions to work-related injuries. The fund covers disability benefits, work accidents and occupational diseases among other benefits. Once a male employee reaches 60 or a female worker reaching 55, they are entitled to an old-age pension. It must be noted that these state pension schemes do not apply to foreign employees. The Omani Social Security System does not cover paid sick leave or maternity benefits. It is recommended that foreign workers arrange a private pension plan with the employer, join any corporate pension plans, or continue contributing to the state pension plan in the home country. |
GEO Solutions or DIY Employment in Oman?
Companies entering Oman must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities. A GEO or Omanese Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have an Omanese entity established that can run payroll.
A DIY approach will typically be delayed until there is a properly incorporated company ready to run payroll and may be a costly option. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.
Outsourcing Employment Through a GEO Employer of Record Service
Using Shield GEO Employer of Record Services in Oman
Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Oman. For companies which intend to employ their staff directly through their incorporated Omani entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Oman.
As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Oman.
The Shield GEO solution is an attractive alternative where
the company is looking to employ staff quickly
the company doesn’t have an appropriately incorporated entity in Oman
the company wants to work within a defined budget
the company wants to limit its initial commitment in Oman
the company needs help with tax, employment, immigration and payroll compliance in Oman
Shield GEO can contract directly with the company to employ and payroll their staff in Oman. Shield GEO supplies local employment contracts for the staff which ensure that local statutory requirements are met covering issues such as termination, probation periods, leave entitlements and statutory benefits. Shield GEO is able to advise companies how to cover local employment regulations whilst still providing consistent global employment policies. Understand more about outsourced employment through Shield GEO.
Payroll
| Payroll | Oman |
|---|---|
| Management Fee for Employer of Record Services / Monthly Payroll Costs | Please contact us for a quote |
| Notes | Shield GEO pays the employee on a monthly basis, typically on the last working day of the month although we can adapt to your preferred schedule. Income tax and social security (where applicable) are deducted at source and paid to the local tax authorities. |
| Currency ? | Omani Rial (OMR) |
| Tax Returns Supplied | Yes |
| Employers Social Security and statutory contributions |
Companies are required to pay 11.5% of the employee’s gross salary as social security contributions including a 1% payment for work related injuries. The withholding obligation lies with the employer. The social security system of Oman is under a unified system of insurance protection coverage for Gulf Cooperation Council (GCC) members that cover workers in all GCC countries. |
| Employees Social Security and statutory contributions |
Employees who are Omani nationals are subject to social security contributions, levied at 18.5% of the employee’s gross salary. Only 7% of this contribution is payable by the employee. Employees who are foreign nationals are not subject to social security payments. |
Payroll and Tax in Oman
| Information | Explanation |
|---|---|
| Remote Payroll ? | A remote payroll in Oman is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Oman. This applies to both local and foreign employees. One option for a non-resident company to payroll its employees (local and foreign) in Oman is to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf. |
| Local Payroll Administration ? | In some cases, a company will register their business in Oman under one of the forms available but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider. |
| Internal Payroll ? | Larger companies with a commitment to Oman may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete the incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Omani payroll and can fulfil all tax, withholding tax and payroll requirements. This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Oman employment laws. |
| Fully Outsourced Payroll & Employment ? | Companies can outsource the employment and payroll of their staff in Oman to a GEO, like Shield GEO. This is possible for both foreign workers and Oman nationals. This is the easiest, fastest and safest way to payroll staff in Oman. Shield GEO manages all aspects of payroll for workers in Oman, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client. Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips. Read more about outsourced payroll and employment through Shield GEO. |
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Tax Figures
| Information | Explanation | ||
|---|---|---|---|
| Corporate Income Tax ? | Corporate taxation in Oman does not define residency as the determinant of corporate taxes. If a foreign company has provided services in Oman for 90 days or more in a 12 month period, or has a dependent agent in Oman, it is considered a permanent establishment and is subject to corporate taxation for the Oman-source income. Corporate Income Tax is 12% applying to all businesses, branches and permanent establishments of any foreign company with taxable income exceeding OMR 30,000. Exclusions apply to petroleum industries. |
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| Income Tax Rate ? |
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| Payroll Tax ? | There is no payroll tax in Oman. |
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| Sales Tax ? | There is no sales tax in Oman. |
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| Withholding Tax ? | Oman does not levy withholding taxes on dividends or interest. There is a 10% withholding tax applied at source to payments for royalties and management fees. This tax applies to companies without a permanent establishment in Oman. |
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| Other Tax ? | Customs Duty: A customs duty of 5% of cost, insurance and freight value applies to most non-GCC source goods. Stamp Duty: A stamp duty of 3% applies to the transfer of land and property. Municipal Taxes: Local taxes are levied for certain activities like hotel income, property rents and leisure income. |
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| Time to prepare and Pay Taxes ? | 68 hours |
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| Time required to start a Business ? | 6 days |
Immigration and Work Permits in Oman
The procedure for sponsoring a foreign worker to work in an Omani company rests mostly on the employer, who must obtain several documents if they are to remain an employee for an extended duration. The employer must acquire an employment visa for entry into Oman, a resident card to remain in the country and a residence permit. In Oman, all these documents apply to employees who are between the age of 21 and 60 who have received a job offer from an Omani company. The employer becomes the visa sponsor and will usually obtain the necessary visas and permits from the Ministry of Manpower.
An Employer of Record Solution can help eliminate the administrative burden, requiring just a 15 to 30 minute commitment from the company every month to gather payroll input.
Use your own company?
Process of sponsoring worker:
1. Procuring a Labor License
The first step of the sponsorship process is for the employer to obtain a Labor License from the Ministry of Manpower to be able to bring a foreign employee under employment. The employer submits a procurement application form to be submitted to the specialized directorate in the Ministry of Manpower.
The Labor License provides Labor Clearance for the employer to hire expatriates. A successful application must meet several requirements:
- The company is compliant with Omanization rules, where the maximum quota for foreign employees in that sector has not been reached.
- The total number of requested staff to be foreign nationals is appropriate for the operations of the company
- The requested expatriate staff have the appropriate certifications
The Ministry of Manpower will require documentation to provide clearance. Once the Labor Clearance status has been obtained, the employer is legally allowed to hire the specified foreign employees.
Employer Documentation Required
- Omanization plan, describing all positions that will be filed by Omani nationals at certain times
- List of desired expatriate employees, disclosing positions and genders
- Copies of all passports of foreign employees
- Attested copies of relevant certificates of qualification for employees
- Attestation of transcripts from educational institutions
- Attestation by Ministry of Foreign Affairs in the employee’s home country
- Attestation by the Oman Embassy in the employee’s home country
Time: Labor Clearance may take up to two years. For medium and large-sized employers with a good reputation and track record, they may apply for a green card to reduce the Labor Clearance process to as short as 6 months.
Cost: OMR 201 per position applied. Service fees vary depending on company and industry.
2. Job offer to the employee
The employer in Oman sends a letter of invitation to all employees who satisfy the conditions and quotas for the Labor Clearance.
3. Issuance of employment visa
The employer must obtain individual employment visas for each expatriate to be sponsored. The employer must submit an employment visa application to the Immigration Department of the Royal Oman Police, and may be conducted through a one-stop shop.
Certain requirements must be met by the employee for a valid visa application, which include:
- The employee must be between 21 and 60 years old
- The person must be of the same sex as stated in the labor permit
- The occupation and position must be identical to the one stated in the labor permit
- Some nationalities require special permits
- Foreign nationals from certain countries require a medical certificate
A medical certificate may be required by foreigners in certain countries, who must go to an approved clinic in the home country for a physical medical fitness test to confirm they are fit to work in Oman. This includes medical fitness certificates for all dependents who will accompany to employee. The certificate must be attested by the Ministry of Health and submitted to the employer before the visa application.
Employer Documentation Required
- A copy of each employee’s passport with at least six months’ validity
- A copy of the Labor License issued by the Ministry of Manpower for each application form
- The letter of invitation or job offer from a registered company in the Sultanate
- An attested medical certificate issued by an approved clinic for employees in certain countries (India, Pakistan, Philippines, Bangladesh, etc.)
- Two recent passport photographs
- Any relevant proof of qualifications or education
Cost: OMR 20 + OMR 201 under the Labor License
4. Issuance of residence card
Once the employment visa is cleared for the employee, the expatriate must obtain a residence card to legally reside in Oman for the duration of employment. This is done when the foreign employee reaches Oman.
The employee, upon arrival, must travel to the Civil Status Department of the Royal Oman Police to obtain the residence card within 30 days of entry. The employee will undergo a blood test at a medical center and guided for fingerprinting. Once the data has been collected, the Directorate General of Civil Status will issue the resident card to the employee, which is valid for two years.
Employee Documentation Required
- Two recent passport photographs
- Original passport
- Copy of the passport
Cost: OMR 10 for processing the medical test.
5. Obtaining a No Objection Certificate
For any circumstance that requires the employee to change jobs, terminate the employment contract prematurely or to have the contract expire, they will be required to leave the country for at least two years unless they obtain a No Objection Certificate (NOC), which is a document that states that both the sponsoring employer and the government of Oman have no issues with the employee working in the country.
The authorization process is lengthy and the NOC is not issued often. If it is authorized, it may be collected from the port of entry along with the visa.
6. The employee may commence work
Once the employment visa and residence card has been received by the employee, they may commence work with the employer in Oman.
Use the Shield GEO Employer of Record Solution?
Once you get in touch with us, one of our consultants will take all the work off your hands, coordinate with our local partners to get all the required permits organised, provide the processing time, costs, document-checklist and keep you informed through the process.
Need help employing in Oman? Get in touch!Types of visas in Oman
| Category | Description of Visa |
|---|---|
| Visit Visas | The visit visa is the most standard visa that allows basic entry into Oman. It is required that all foreign nationals must obtain a valid entry visa to enter Oman, unless they are from a Gulf Cooperation Council (GCC) country. Visit visas come in different forms, including business, tourist and family visit visas. All types of visit visas do not allow the employee to engage in business activities. Visit visas are valid for six months from the date of issuance, and the stay in Oman is limited to one month, except for family visit visas which permit stays of up to three months. This visa may be obtained at all ports of entry in Oman or from Omani diplomatic missions and commercial representation offices. These visas do not require to approval of the Directorate General of Passports and Residency in Muscat. It is not possible to extend the length of the visa. Fee: OMR 20 |
| Scientific Research visa | These visas are the same as the visit visa, and are issued to foreigners entering Oman for scientific research. They must be requested by the local specialized authorities. The scientific research visa permits the holder to stay in Oman for three months, and may be extended up to an additional two months. Fee: OMR 50 |
| Employment visa | Employers must obtain employment visas for any foreign employees aged 21 or older for entry into Oman. This is the standard visa for employers to sponsor a foreign national for work in Oman. The employment requires the approval of the Directorate General of Labor Affairs. The employment visa requires the employer to have labor clearance from the Ministry of Manpower. The employee must satisfy approval criteria to be eligible for an employment visa, including Omanization quotas for the minimum level of Omani nationals employed in the company. The duration of the employment visa is limited to two years from the date of entry. Even after entry, the employee is not allowed to work until all the necessary applications are processed, including the residence permit. Employees holding employment visas must not exit Oman for longer than six months, unless they are family members. Family members may apply for a family joining visa, allowing the employee’s family to reside in Oman but not work for the duration of employment. Fee: 20 OMR |
| Investors’ visas | Investor visas are intended for foreigners who intend to invest funds in Oman. This visa must be approved by the Ministry of Commerce and Industry. |
| Family Joining visa | This visa is granted to the wife of the foreign employee and any children under the age of 21. The approval process requires a certificate from the Ministry of Interior to confirm the status of marriage. It is at the discretion of the Ministry of Interior to grant the family visa. The family visa expires once the employee’s residence permit expires. Fee: OMR 20 |
Setting up a company in Oman
When setting up a company you may want to consider these factors:
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Business Factors
Oman is a member of the Arab League and part of the Gulf Cooperation Council (GCC). Businesses are governed by the Sultanate of Oman’s Commercial Law, which are similar in nature to other Middle Eastern countries. The country has engaged in sound economic policies to attract foreign investments in a wide variety of industries in the last few decades.
Although it may be attractive for foreign companies to invest into Oman in certain sectors, there are bureaucratic obstacles that exist such as difficulty of obtaining visa and permit clearances for foreign workers and the divide between government and the private sector. In particular, many international firms must face Oman’s policy of Omanization, which involves setting quotas for Omani nationals that must be filled for most industries.
The type of investment vehicle chosen by a foreign business depends on the industry or service, geographical market, and whether importing or manufacturing is involved. These factors must be considered, in addition to:
- The industry and type of business that will be conducted
- Nationality of the headquarters / individuals (s)
- Presence of existing trade agreements or relationships
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Location
Location will be another factor. Separate cities and regions may have different rules, costs and availability. Although Oman is a geographically small country, it is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants and others depending on your needs.
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Language
Arabic is the official language used in Oman. English, Baluchi, Urdu and some Indian dialects are spoken as well as secondary languages. English is generally taught at school from a young age and used widely in the business community, where business is conducted largely in Arabic, English or both.
The Sultanate of Oman has made significant progress towards economic growth and prosperity in the last 40 years, which makes Oman an increasingly favorable location for business investment. They country has in place strong incentive schemes to drive further investment into the country, ranging from subsidized interest rates, custom duty exemptions and income tax exemptions for a period of time. There has been a shift towards liberalizing the Foreign Business and Investment Law, allowing up to 70% of foreign equity ownership, and up to 100% for vital development projects to Oman.
Commercial entities should register with the Ministry of Commerce and Industry and the Chamber of Commerce and License of the municipality of incorporation before beginning business. Foreign companies and individual investors may establish operation in Oman through several main forms:
- Limited Liability Company
- Joint Stock Company
- Branch
- Commercial Agency
- Commercial Representative Office
Limited Liability Company
The Limited Liability Company (LLC) is the most common type of business entity used in Oman. The business operates under a company name and ownership of the company is in the form of shares in the capital of the company. Much like limited liability companies, the liability for each shareholder is limited to the portion of their own capital contributions. In the LLC the directors are personally responsible for the prudent management of the company, and are not required to be shareholders.
LLCs in Oman may not engage in banking, financial guarantees, or commercial aviation activities. They are required to withhold 10% of their net profits after tax as legal reserve. The annual shareholders meeting should be held within six months of the financial year end.
Liability
Liability of each shareholder is only limited to the capital they have invested in.
Minimum Ownership
At least one Omani partner with a minimum of 30% shareholding. Companies 100% owned by GCC shareholders do not require a local Omani partner.
Number of Founding Members
At least two shareholders, up to a maximum of 40.
Minimum Capital Requirements
OMR 150,000 for public joint stock companies or companies with foreign participation. OMR 50,000 for closed joint stock companies.
Procedure:
1. Initial capital deposit in bank
The capital of a LLC must be fully paid at the time of registration. The founding members must deposit the minimum required capital depending on their foreign shareholdings status.
2. Registration at the Commercial Registry of the Ministry of Commerce and Industry
The company must submit a name for approval to the Ministry of Commerce and Industry (MOCI) that has not been taken. Company names with certain words require a higher starting share capital, such as “Oman”. This is done online.
Once the name has been checked, the application form and the following documents must be submitted to the one-stop shop at MOCI:
- Copy of passport or identity cards of shareholders
- Copy of passport or identity cards of all intended authorized signatories
- Approved authorized signatory form, with names and sample signatures of each authorized signatory reproduced
- Standard company registration forms, including constitutive contract and articles of association
- Application for specific licenses depending on the company’s activities
- Certificate of initial capital deposit from bank
The one-stop shop includes the MOCI, Ministry of Civil Defense, Royal Oman Police, Muscat Municipality, Chamber of Commerce, Ministry of Regional Municipalities, Environment and Water Resources and the Ministry of Manpower. Registration is expedited through this method.
During registration with the MOCI, the fees differ depending on the grade of the company, ranging from Excellent grade to Fourth grade in descending order of startup capital.
The company must also obtain the license from the Municipality of Muscat through submitting the following documents at the one-stop shop:
- Company lease agreement
- Company statutes including memorandum and articles of incorporation
- Chamber of Commerce and Industry affiliation certificate
- Agency Certification if applicable
Time: 3 days
Cost:
- OMR 40 for 5 year business registration
- OMR 128 for Chamber of Commerce
- OMR 15 for registration with Muscat Municipality
3. Notification of the Tax Department of the Finance Ministry
The company must register at the Tax Department under the Income Tax Law. Registration involves submission of a completed Declaration of Business Particulars form.
Time: 1 day
Cost: no charge
4. Registering employees for social insurance
For every worker employed, a copy of the employment contract must be submitted to the Public Authority for Social Insurance for the employee’s social security registration purposes. The LLC must be obligated to the employee’s retirement benefits contributions to the Public Authority in accordance to the Social Security Law of Oman.
Time: 1 day
Cost: no charge
5. Make a company seal
The company seal or stamp must be issued by the registered authorized signatory of the LLC. The creation of the seal must be accompanied by an attested signature specimen confirming the issuer’s authority to obtain the stamp.
Time: 2 days
Cost: OMR 50
6. Post registration procedures
The following must be obtained after the formal incorporation process, which may vary depending on the intended business activities:
- Municipality license
- Tax registration
- Registration with the Royal Oman Police
- Registration with the Ministry of Manpower to apply for labor clearance and visas
- Import/export license if required
- Industrial, environmental and other permits
Joint Stock Company
Also known as a Closely Held Joint Stock Company (SAOC), it is equivalent to a public company in most countries. There are two primary forms of joint stock companies, where the company can be a private or publicly held joint stock company. The privately held joint stock company does not offer their shares for public subscription, while the publicly held joint stock company does offer shares to the public.
Also known as a Closely Held Joint Stock Company (SAOC), it is equivalent to a public company in most countries. There are two primary forms of joint stock companies, where the company can be a private or publicly held joint stock company. The privately held joint stock company does not offer their shares for public subscription, while the publicly held joint stock company does offer shares to the public.
Liability
Liability of each shareholder is only limited to the capital they have invested in.
Minimum Ownership
At least 30% of shareholdings owned by Omani nationals. Companies 100% owned by GCC shareholders do not require a local Omani partner.
Number of Founding Members
At least three shareholders.
Minimum Capital Requirements
OMR 500,000 for a privately held joint stock company. OMR 2 million for a publicly held joint stock company.
Procedure:
1. Initial capital deposit in bank
The capital of a LLC must be fully paid at the time of registration. The founding members must deposit the minimum required capital depending on their foreign shareholdings status.
2. Drafting Constitutional documents
The proposed constitutional documents of the company must be drafted and translated into Arabic if English. These include the memorandum and articles of association. The MOCI must review these documents and may negotiate the terms of the contracts.
3. Capital Market Authority registration procedures
A written application must be submitted to the Capital Market Authority (CMA) if the joint stock company is public. These include the following documents:
- Memorandum of Incorporation, articles of association and feasibility study
- Statement of Issuance Expenses
- Proposed bylaws of the company
- Bank certificate as proof of deposit
- Statement of the quota system
- Statement of appointing an advisor for issuing shares
4. Application for administrative decision
Approval must be obtained from the Director General of Commerce and also the CMA. The following documents are required for administrative approval:
- Covering letter in Arabic
- Final constitutive contract and articles of association
- Foreign shareholder documents
- Omani shareholder documents
5. Constitutive general meeting and board meeting
A general meeting is required for the election of the board of directors, and to formally approve contracts, articles of association and appointment of auditors. The appointment of authorized signatories, a chairman and a vice-chairman is required, who must approve the submission of the business application to the MOCI.
6. Registration at the Commercial Registry of the Ministry of Commerce and Industry
The company must submit a name for approval to the Ministry of Commerce and Industry (MOCI) that has not been taken. Company names with certain words require a higher starting share capital, such as “Oman”. This is done online.
Once the name has been checked, the application form and the following documents must be submitted to the one-stop shop at MOCI:
- Copy of passport or identity cards of shareholders
- Copy of passport or identity cards of all intended authorized signatories
- Approved authorized signatory form, with names and sample signatures of each authorized signatory reproduced
- Standard company registration forms, including constitutive contract and articles of association
- Application for specific licenses depending on the company’s activities
- Certificate of initial capital deposit from bank
The one-stop shop includes the MOCI, Ministry of Civil Defense, Royal Oman Police, Muscat Municipality, Chamber of Commerce, Ministry of Regional Municipalities, Environment and Water Resources and the Ministry of Manpower. Registration is expedited through this method.
During registration with the MOCI, the fees differ depending on the grade of the company, ranging from Excellent grade to Fourth grade in descending order of startup capital.
The company must also obtain the license from the Municipality of Muscat through submitting the following documents at the one-stop shop:
- Company lease agreement
- Company statutes including memorandum and articles of incorporation
- Chamber of Commerce and Industry affiliation certificate
- Agency Certification if applicable
Time: 3 days
Cost:
- OMR 40 for 5 year business registration
- OMR 128 for Chamber of Commerce
- OMR 15 for registration with Muscat Municipality
7. Notification of the Tax Department of the Finance Ministry
The company must register at the Tax Department under the Income Tax Law. Registration involves submission of a completed Declaration of Business Particulars form.
Time: 1 day
Cost: no charge
8. Registering employees for social insurance
For every worker employed, a copy of the employment contract must be submitted to the Public Authority for Social Insurance for the employee’s social security registration purposes. The LLC must be obligated to the employee’s retirement benefits contributions to the Public Authority in accordance to the Social Security Law of Oman.
Time: 1 day
Cost: no charge
9. Make a company seal
The company seal or stamp must be issued by the registered authorized signatory of the LLC. The creation of the seal must be accompanied by an attested signature specimen confirming the issuer’s authority to obtain the stamp.
Time: 2 days
Cost: OMR 50
10. Post registration procedures
The following must be obtained after the formal incorporation process, which may vary depending on the intended business activities:
- Municipality license
- Tax registration
- Registration with the Royal Oman Police
- Registration with the Ministry of Manpower to apply for labor clearance and visas
- Import/export license if required
- Industrial, environmental and other permits
Branch
A foreign branch offers non-Omani corporate entities and individuals to conduct business in Oman with a limited legal presence. The branch office is essentially a footprint of the foreign company in Oman, which allows very limited activities to be conducted in Oman.
A foreign branch offers non-Omani corporate entities and individuals to conduct business in Oman with a limited legal presence. The branch office is essentially a footprint of the foreign company in Oman, which allows very limited activities to be conducted in Oman.
Commercial Agency
A Commercial Agency is any agreement whereby a merchant or a commercial company in the Sultanate is assigned to promote or distribute products or services of a foreign entity. Unless the foreign entity is conducting business in Oman under a government contract, an Omani agent is required to conduct business activities. The main purpose of a Commercial Agent is to export goods and services to Oman by a foreign business. This form of business entry does not establish a business presence. These Commercial Agencies are governed by the Commercial Code (Royal Decree 55/90).
Agents must be Omani citizens, and all agencies must be majority Omani-owned and controlled. The agent must be members of the Omani Chamber of Commerce and Industry. The commercial agency relationships between the agent and the foreign entity must be registered, along with the registration of a principal place of business in Oman.
Commercial agencies do not have to be exclusive. The foreign business may appoint more than one agent in Oman. Any commercial agency agreements must be in writing and certified and authenticated. They must include:
- Name of the agent and principal and their respective nationalities
- Products or services subject matter
- Term and the territory
The agency agreement is registered at the Commercial Agencies Register at the Ministry of Commerce and Industry (MOCI). Upon registration, the agreement may come in three forms:
- Contracts agency: Where the principal compensates the agent for promoting the service or products in Oman. The agent remains independent.
- Commission Agents: The agent contracts on their own behalf, while the principal is usually concealed.
- Brokers: The principal entrusts the agent to locate and identify possible buyers in return for a commission.
Commercial Representative Office
A commercial representative office is established if the primary purpose of establishing a legal presence in Oman for the foreign company is to conduct market research, advertising, marketing, promotional or administrative functions with other commercial entities in Oman. Representative offices are not allowed to engage in commercial activities that will generate any profits, while imports are restricted to samples used for promotional purposes.
Representative offices may only be established by companies that have a head office and at least three other branches in other countries. The representative office must be registered at the Commercial Register. They are not allowed to engage with customers, and only with potential importers of the product.
This form of business entry may be chosen due to the ease of setting up and the relatively lower risks as the foreign company establishes more contacts and know-how with Omani businesses and consumers.
- Oman Employer of Record Overview
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