Oman has emerged as one of the most business-friendly destinations in the Middle East, offering foreign investors full ownership rights in various sectors. With pro-business policies, strong economic growth, and investor-friendly regulations, Oman has made it easier for international entrepreneurs to establish a 100% foreign ownership company in Oman.
This guide provides a detailed step-by-step process to help foreign investors set up their businesses in Oman, covering legal requirements, investment benefits, costs, and setup procedures. Additionally, it explains how UK, US, and German residents can navigate the registration process successfully.
Why Set Up a 100% Foreign Ownership Company in Oman?
Starting a 100% foreign ownership company in Oman offers several advantages that attract global investors.
No Local Partner Required
Previously, foreign investors needed an Omani sponsor to own 51% of the company, but recent reforms now allow full foreign ownership in most business sectors. The Foreign Capital Investment Law (FCIL) that came into effect in January 2020 removed the mandatory requirement for a 30% Omani, GCC or US national partner.
Historical Context – Major Policy Shift
Before the 2020 Foreign Investment Law, 100% foreign ownership was exclusively reserved for:
- Nationals of other GCC states
- US citizens or US-owned companies under the 2009 Oman-USA Free Trade Agreement
- Foreign companies with minimum investment of OMR 500,000 (approximately US$1.3 million)
- Foreign entrepreneurs restricted to trade within Omani Free Zones
The new FCIL completely transformed this by:
- Removing the OMR 150,000 minimum paid-up capital requirement (previously US$390,000)
- Allowing single shareholder LLCs (one-person company structure)
- Substantially reducing business activities closed to foreign investment
Business-Friendly Regulations
Oman’s Foreign Capital Investment Law encourages international investors by simplifying business registration, licensing, and taxation policies.
Equal Treatment with National Projects
Critical Legal Benefit: The FCIL provides that foreign investment projects have all incentives that ‘national projects’ enjoy under Omani law. This means foreign companies are placed on equal footing with local/Omani companies, including:
- Equal access to public tendering opportunities
- Favorable debt finance terms from domestic banking sector
- Potential preferential treatment through Cabinet resolutions
Import Rights Advantage
Major Operational Benefit: The FCIL expressly permits investment projects to import products without registering with the registry of importers. This eliminates the need for agents and distributors and reduces licensing complexities.
Free Trade Agreements
Oman has several free trade agreements (FTAs) with GCC countries, the United States, and Singapore, offering duty-free trade and export incentives.
Strategic Location & Growing Economy
Oman provides easy access to global markets in Asia, Africa, and the Middle East, making it an ideal destination for trade and commerce.
Tax Advantages
Oman offers a zero personal income tax policy and low corporate tax rates, making it one of the most cost-effective business hubs in the region.
Complete Transfer Rights
Foreign investors have complete rights to transfer money related to investment projects to or from Oman. They may also transfer ownership of investment projects, in whole or in part, to another foreign investor.
With these advantages, setting up a 100% foreign ownership company in Oman is an excellent opportunity for international entrepreneurs.
Types of Business Entities Allowed for Full Foreign Ownership
Foreign investors can establish different types of companies in Oman, depending on their business activities and investment goals.
Limited Liability Company (LLC)
An LLC is the most common structure for foreign businesses in Oman. It requires a minimum of one shareholder and allows 100% foreign ownership in most industries.
Free Zone Company
Businesses operating in Oman’s Free Zones enjoy benefits such as full profit repatriation, tax exemptions, and customs duty waivers.
Branch of a Foreign Company
International businesses can establish a branch office in Oman without a local sponsor. However, branches must only engage in activities approved by the Ministry of Commerce, Industry, and Investment Promotion (MOCIIP).
Representative Office
A representative office is an ideal choice for businesses looking to conduct market research without engaging in direct trade activities.
Choosing the right company structure ensures compliance with Omani business laws and maximizes operational benefits.
CRITICAL: Activities Prohibited for Foreign Investment
IMPORTANT RESTRICTION: The following activities are completely closed to foreign investment in Oman:
Service Industries
- Services of photocopying and typing of documents
- Translation and interpretation activities
- Transactions clearance
Tailoring and Clothing
- Tailoring of Arabic menswear (menswear tailoring shops)
- Tailoring of non-Arab menswear
- Tailoring of Arabic and non-Arab women’s clothes
- Tailoring of sportswear
- Tailoring of military uniforms
- Manufacture of Omani kimmah
- Manufacture of women’s Abaia (gown)
Automotive Services
- Electrical repairs of motor vehicle and recharging of batteries
- Repair and clean of vehicle radiators
- Wheel balance
- Service stations of washing and lubrication of motor vehicle
- Change oils of motor vehicle
- Repair of motor vehicle air conditioner
- Repair of exhaust sound for motor vehicle
- Washing and polishing of motor vehicle
- Tyre and tube repair
Transportation and Logistics
- Transport and sale of drinking water
- Taxi operation
Employment Services
- Labour recruitment offices
- Employment placement offices
- Driving training
Personal Care Services
- Laundering of all kinds of clothing (including fur) and textiles
- Ironing of clothing
- Laundry steam (dry wash)
- Hair trimming and cutting, hairdressing, shaving and beard trimming for men
- Hairdressing and other beauty treatment for women
- Hair trimming and cutting, hairdressing for children
Fishing Activities
- Marine fishing
- Freshwater fish fishing
Specialized Care Facilities
- Education for handicapped
- Homes for the elderly
- Orphanages
- Rehabilitation centres
- Specialized rehabilitation centres
Real Estate Ownership Restrictions
CRITICAL LIMITATION: Oman bans non-Omani ownership of real estate and land in various governorates and in other areas the government deems necessary to restrict.
Step-by-Step Process to Start a 100% Foreign Ownership Company in Oman
Setting up a 100% foreign ownership company in Oman involves selecting a business activity, choosing a legal structure, registering a trade name, obtaining government approvals, securing office space, and applying for a business license. Following these steps ensures compliance with Omani business laws and a smooth registration process.
Step 1: Choose a Business Activity
The first step is selecting an appropriate business activity from the list approved by MOCIIP. Popular industries include:
- Trading & import/export
- IT & technology
- Manufacturing
- Financial services
- Consultancy & professional services
IMPORTANT: Ensure your chosen activity is not on the prohibited list mentioned above.
Step 2: Select a Business Structure
Investors must determine the best legal structure for their company, such as LLC, Free Zone Company, or Branch Office.
Step 3: Register a Trade Name
The company’s trade name must be unique and approved by MOCIIP. It should not contain religious or political references and must be available for registration.
Step 4: Prepare Legal Documents
Foreign investors must submit the following mandatory documents:
- Passport copies of all shareholders
- Company incorporation documents
- Memorandum of Association (MoA)
- Lease agreement for office space
- Business plan outlining investment activities
- Short economic feasibility study (required under FCIL)
NEW REQUIREMENT: The FCIL requires new foreign investors to provide a short economic feasibility study of the business they expect to carry out in Oman to provide comfort to the Government that the business activity is viable and beneficial to the Omani economy.
Step 5: Obtain Necessary Approvals
Certain industries require additional approvals from government agencies such as:
- Ministry of Environment – For manufacturing businesses
- Oman Chamber of Commerce – For trading companies
- Central Bank of Oman – For financial institutions
APPROVAL PROCESS: Currently, the Ministry of Commerce and Industry approves foreign shareholdings in new LLCs on a case-by-case basis pending a ministerial decision on a clear legal regulatory framework.
TIMELINE COMMITMENT: The FCIL requires the licensing body to simplify the licensing process and commit to specific timelines for issuing approvals.
Step 6: Secure an Office Location
A physical office or virtual address is mandatory for business registration in Oman.
Step 7: Receive the Business License
Once all approvals are secured, the business license is issued, and the company is legally authorized to operate.
Step 8: Open a Corporate Bank Account
A corporate bank account is essential for financial transactions. Investors must provide company registration documents and shareholder details.
Step 9: Omanization Compliance
MANDATORY REQUIREMENT: Companies that are 100% owned by foreign investors must hire at least one Omani national. If not already done, proceed to hire such an individual to ensure compliance with Omanization requirements.
How UK, US, and German Residents Can Start a 100% Foreign Ownership Company in Oman
Entrepreneurs from the UK, US, and Germany can establish a 100% foreign ownership company in Oman by following the legal procedures set by MOCIIP. They benefit from trade agreements, tax incentives, and simplified business registration processes, making it easier to enter Oman’s growing business market.
UK Investors
UK citizens benefit from Oman-UK trade agreements, which allow easy company registration and import/export incentives. The Oman British Business Council (OBBC) assists UK investors with legal processes.
US Investors
The Oman-US Free Trade Agreement simplifies company formation for US citizens. American investors enjoy zero customs duties on trade and full business ownership rights.
German Investors
German entrepreneurs can leverage Oman’s strong business ties with Europe. The Oman-Germany Economic Forum provides guidance on company setup, taxation, and operational benefits.
For UK, US, and German investors, partnering with local business consultants ensures a hassle-free registration process.
Cost of Setting Up a 100% Foreign Ownership Company in Oman
The cost of business setup depends on the company type and industry. Below is an estimated cost breakdown:
| Expense Type | Estimated Cost (OMR) |
| Trade Name Registration | 50 – 100 |
| Business License Fee | 500 – 2,000 |
| Office Rent (Annual) | 2,500 – 10,000 |
| Visa Processing (Per Employee) | 500 – 1,500 |
| Bank Account Opening | Varies by Bank |
Professional Service Benchmark: The average professional service fees to set up a One-Person LLC Company under the new FIL amount to approximately US$38,119. These fees typically include:
- LLC company formation with a sole shareholder
- Assistance to locate physical office premises or engage a local P.O Box service
- Registration with the Tax Authority
- Multi-currency bank account opening (without travel) with a top-tier bank
Costs vary based on business structure and regulatory approvals.
Common Challenges & Solutions for Foreign Investors
Foreign investors setting up a 100% foreign ownership company in Oman may face challenges such as understanding legal requirements, obtaining approvals, and securing office space. These issues can be resolved by working with business consultants, ensuring proper documentation, and selecting the right business structure to comply with Omani regulations efficiently.
Understanding Business Laws
Navigating Omani business regulations can be complex. Hiring a business consultant ensures compliance.
Choosing the Right Business Structure
Investors often struggle with selecting the best company type. Consulting legal advisors can help make an informed decision.
Securing Government Approvals
Some industries require additional approvals, which may cause delays. Proper documentation and professional assistance speed up the process.
Prohibited Activities Verification
Ensuring your business activity is not on the negative investment list is crucial to avoid application rejection.
Omanization Compliance
Understanding and implementing local hiring requirements is essential for ongoing compliance.
Conclusion
Starting a 100% foreign ownership company in Oman is now easier than ever due to progressive investment policies and government support. With no local sponsor requirements, tax benefits, equal treatment with national projects, import rights advantages, and global trade access, Oman presents an excellent opportunity for international entrepreneurs.
The Foreign Capital Investment Law of January 2020 represents a fundamental shift from restrictive policies to a truly open investment environment. By removing capital requirements, local partner mandates, and expanding permitted activities, Oman has positioned itself as a premier business destination in the Middle East.
By following the legal steps, obtaining approvals, securing business licenses, and ensuring Omanization compliance, investors from the UK, US, and Germany can establish successful ventures in Oman. For seamless company registration, seeking professional guidance ensures compliance and efficiency.
Key Success Factors:
- Verify your business activity is permitted for 100% foreign ownership
- Prepare comprehensive feasibility study as required by FCIL
- Ensure Omanization compliance by hiring at least one Omani national
- Leverage import rights and equal treatment benefits
- Work with experienced business consultants for smooth registration
For expert assistance with company registration in Oman, working with business setup specialists guarantees a smooth and hassle-free experience.
Frequently Asked Questions (FAQs)
Can foreigners own 100% of a company in Oman?
Yes, Oman allows full foreign ownership in most industries under the Foreign Capital Investment Law that came into effect in January 2020.
Do I need an Omani partner to start a business?
No, foreign investors no longer require a local sponsor for most business activities. The 30% Omani partner requirement was removed in 2020.
What is the minimum investment required?
No minimum investment is required. The previous OMR 150,000 (US$390,000) minimum paid-up capital requirement was eliminated.
What is the best business structure for foreign investors?
A Limited Liability Company (LLC) is the most preferred structure due to its flexibility and legal benefits. It can be established with a single shareholder.
How long does it take to register a company in Oman?
On average, the business registration process takes 2 to 4 weeks, depending on approvals. The FCIL requires licensing bodies to commit to specific timelines.
What industries allow 100% foreign ownership in Oman?
Industries like technology, manufacturing, consultancy, trading, and financial services allow full foreign ownership. However, prohibited activities include tailoring, automotive services, personal care, and specialized care facilities.
Do I need to hire Omani nationals?
Yes, companies that are 100% foreign-owned must hire at least one Omani national to comply with Omanization requirements.
Can I own real estate in Oman?
No, Oman bans non-Omani ownership of real estate and land in various governorates.
What are the import advantages?
Foreign investment projects can import products without registering with the registry of importers, eliminating the need for local agents and distributors.
