Foreign Ownership Rules and Legal Structures in Oman, 2025

Oman has become one of the most attractive destinations for global investors looking to expand into the Middle East. With its ongoing economic reforms, updated business regulations, and commitment to attracting foreign capital, the Sultanate is positioning itself as a modern investment hub. Understanding the foreign ownership rules in Oman and the available legal structures in 2025 is essential for entrepreneurs, investors, and corporations seeking long-term opportunities.

This guide explains in detail how foreigners can own businesses and property in Oman, the permitted legal structures, investment incentives, and the compliance obligations that businesses must follow in 2025.

Evolution of Foreign Ownership Laws in Oman

For many years, Oman restricted full foreign ownership, requiring local Omani partners in most companies. This limited the independence of international investors. However, with the introduction of the Foreign Capital Investment Law, the country opened the door to 100% foreign ownership in many sectors.

The reforms are part of Oman’s Vision 2040 strategy, which aims to diversify the economy beyond oil and gas. As of 2025, investors now have much more freedom to set up businesses, provided they comply with sector-specific guidelines and Omanization requirements.

What Foreign Investors Need to Know in 2025

Foreign investors should focus on three key areas when planning entry into Oman:

1. Sector Permissions: Some industries allow 100% foreign ownership, while others remain restricted.
   
2. Legal Structures: The choice of entity affects liability, taxation, and operational flexibility.
   
3. Labour & Omanization Rules: Employment of Omani nationals is mandatory under specific conditions.
   

This balance of liberalization and regulation ensures both investor confidence and national economic growth.

Legal Structures Available to Foreign Investors in Oman

Foreign investors can choose from several business structures depending on their size, goals, and sector of activity.

Limited Liability Company (LLC)

An LLC is the most common structure. As of 2025, foreigners can own 100% of an LLC in many sectors. LLCs require a minimum of two shareholders, although some exemptions allow single ownership under certain conditions. Liability is limited to the capital invested, making this structure attractive to small and medium businesses.

One Person Company (OPC)

The OPC allows a single shareholder, who may be a foreigner, to establish a company in Oman. This entity is suitable for consultants, freelancers, or small service providers.

Joint Stock Company (JSC)

A JSC is intended for larger businesses and can be either closed (CJSC) or public (PJSC). JSCs have higher capital requirements and stricter governance rules. They are typically used by large corporations, banks, or firms seeking to list on the Muscat Stock Exchange.

Branch of a Foreign Company

International companies may set up a branch in Oman if their activities align with their parent company. This structure enables foreign businesses to operate directly, though approval requirements are stricter.

Free Zone Entities

Oman’s free zones—such as Sohar, Duqm, and Salalah—offer 100% foreign ownership, tax exemptions, and streamlined licensing. They are particularly suitable for logistics, manufacturing, and export-oriented businesses.

Partnerships

Both general and limited partnerships are available. However, liability rules vary, and many foreign investors prefer LLCs due to limited liability protection.

Foreign Ownership of Property in Oman

One of the most asked questions is: Can a foreigner own property in Oman?

Yes, but only in designated areas. Foreigners are permitted to buy property in Integrated Tourism Complexes (ITCs) and other approved projects. Ownership outside these zones is generally restricted. Foreign investors can, however, lease or acquire long-term usufruct rights for up to 99 years in certain locations.

This system allows Oman to attract real estate investment while maintaining national land ownership protections.

Key Rules for Foreign Ownership in 2025

Oman’s updated framework emphasizes both openness and regulation. Important points include:

• 100% foreign ownership allowed in many business sectors.
  
• Negative list of restricted sectors still exists, covering industries like oil & gas exploration, defense, and media.
  
• Mandatory Omanization requires companies to employ local talent.
  
• Digital licensing allows faster and easier company registration through online portals.
  
• Real estate ownership restricted to government-approved developments for foreigners.
  

Omanization and Labour Compliance

Foreign ownership is permitted, but investors must respect Oman’s national employment policies.

• At least one Omani national must be employed within the first year of operations for fully foreign-owned companies.
  
• Certain job categories are reserved for Omani citizens only.
  
• Employers must comply with the Oman Labour Law, which regulates contracts, end-of-service benefits, termination conditions, and social insurance contributions.
  

Important Labour Law Articles Relevant to Foreign Investors

Foreign investors in Oman must be aware of key provisions within the Labour Law that affect employment, termination, and employee rights. Articles such as 39, 40, 43, and 77 outline gratuity, dismissal conditions, contract termination, and legal consistency—ensuring both employers and employees operate under fair regulations.

Article 39

Provides the formula for end-of-service gratuity for workers not covered by the social insurance system.

Article 40

Outlines conditions under which an employer may dismiss an employee without prior notice, such as misconduct or fraud.

Article 43

Defines when employment contracts can be terminated, including expiry, resignation, or employer dismissal.

Article 77

Forms part of Oman’s legal foundation, ensuring laws and regulations are applied consistently across the Sultanate.

Benefits of Investing in Oman

Oman has become one of the most attractive destinations for foreign investors in recent years. Its strategic policies, geographical advantages, and investor-friendly regulations make it a natural choice for businesses looking to expand into the Middle East. The benefits of investing in Oman are diverse and long-term, offering opportunities across multiple industries.

Strategic Location Between Asia, Africa, and Europe

Oman’s geographic position is one of its biggest strengths. The country sits at the crossroads of Asia, Africa, and Europe, making it a gateway for international trade. With access to major global shipping lanes through ports such as Sohar, Duqm, and Salalah, Oman is positioned as a logistics and distribution powerhouse. This location reduces transportation time, lowers costs for exporters, and helps businesses access markets in three continents simultaneously.

Political Stability and Business-Friendly Reforms

A stable political environment is a major reason investors choose Oman. The government has consistently worked to provide a safe, transparent, and reliable business climate. Recent business-friendly reforms—such as liberalizing foreign ownership rules and modernizing company laws—have made it easier for international investors to establish and expand operations. The stability also fosters long-term growth and reduces risks often associated with emerging markets.

Attractive Tax Incentives, Especially in Free Zones

Oman’s tax incentives are among the most competitive in the region. Free zones offer benefits such as 100% foreign ownership, tax holidays, customs exemptions, and profit repatriation without restrictions. These advantages reduce operational costs and improve profitability for businesses. For many global companies, Oman’s free zones act as cost-efficient hubs to manage regional operations and exports.

Strong Infrastructure Supporting Key Industries

The government has invested heavily in world-class infrastructure to support logistics, manufacturing, energy, and technology. From modern highways and airports to advanced seaports and industrial zones, Oman provides everything needed to support large-scale industrial and commercial operations. This infrastructure not only enhances efficiency but also attracts companies looking to set up manufacturing plants, logistics centers, and technology hubs.

Growing Middle Class Driving Demand

Another strong advantage is Oman’s growing middle class, which is creating consistent demand for products and services. Sectors such as retail, healthcare, and education are seeing significant growth as disposable incomes rise. This domestic demand, combined with Oman’s regional trade advantages, provides businesses with both local and international growth opportunities. For foreign investors, this translates into long-term profitability and stability.

Challenges for Foreign Investors

While Oman presents exciting opportunities, international investors must also recognize the obstacles that may affect their journey. The challenges for foreign investors in Oman require careful planning and strategic solutions to ensure long-term success.

Adapting to Omanization Requirements

One of the most significant challenges is complying with Omanization policies. The government mandates companies to employ a certain percentage of Omani nationals, depending on the sector. For foreign-owned businesses, this can mean adjusting recruitment strategies, investing in training programs, and balancing local hiring with specialized foreign talent. Although it strengthens the local workforce, it can also increase operating costs for new investors.

Navigating Restricted Sectors

Despite liberal reforms, some industries remain under restrictions for foreign ownership in Oman. Key sectors like defense, natural resources, and certain media activities require Omani participation or complete local ownership. For foreign investors, this means conducting thorough research before entry and sometimes forming partnerships with Omani stakeholders. Choosing the wrong sector without understanding restrictions can lead to wasted resources and delays.

Understanding Cultural and Legal Differences

Doing business in Oman requires respect for cultural norms and legal frameworks. Business etiquette, negotiation styles, and contract enforcement may differ from Western or Asian markets. Foreign investors often face challenges in adapting to Arabic business culture, where building trust and personal relationships are as important as formal agreements. A lack of cultural understanding may cause misunderstandings, contract disputes, or slower deal-making.

Maintaining Compliance with Reporting and Renewal Obligations

Foreign businesses in Oman must follow strict compliance rules, including annual audits, license renewals, and reporting requirements. Failure to meet these obligations can lead to fines, license cancellations, or operational disruptions. For startups and SMEs, this can be overwhelming without local legal and accounting support. Staying compliant requires ongoing attention, proper documentation, and timely coordination with Omani authorities.

Proper planning and legal support help overcome these challenges.

Steps to Launch a Foreign-Owned Company in Oman

Setting up a business in Oman as a foreign investor is a straightforward process if you follow the right steps. The government has streamlined procedures through digital platforms and clear regulations, but investors must still meet specific requirements. Below are the steps to launch a foreign-owned company in Oman in 2025.

Step 1: Check if Your Business Sector Allows 100% Ownership

Before beginning the registration process, you must confirm whether your chosen business activity is on the permitted list for full foreign ownership. While most sectors are now open, a few industries remain restricted. Understanding these rules early prevents delays and ensures compliance with Omani laws.

Step 2: Select the Right Legal Structure

Choosing the correct legal structure in Oman determines how your business will operate. Options include:

• Limited Liability Company (LLC)
  
• One Person Company (OPC)
  
• Joint Stock Company (JSC)
  
• Branch of a Foreign Company
  
• Free Zone Entity
  

Each structure has its own requirements for shareholders, liability, and capital. Selecting the right one helps align your business model with long-term goals.

Step 3: Apply Through the Ministry of Commerce, Industry, and Investment Promotion (MoCIIP)

The MoCIIP is the primary authority for foreign business registration. Applications are now processed through the Invest Easy portal, which makes the process faster and more transparent. You will need to reserve your trade name, select your business activity, and obtain initial approvals.

Step 4: Submit Required Documents

To complete the application, you must submit the necessary paperwork, which usually includes:

• Passport copies of shareholders
  
• Business plan outlining operations
  
• Filled application forms
  
• Proof of registered office address
  

Providing accurate and complete documents ensures quick approval.

Step 5: Pay Fees and Obtain Your Trade License

Once approvals are granted, you must pay the registration and licensing fees. After payment, the trade license is issued, along with the company registration number, which legally authorizes you to operate in Oman.

Step 6: Register with the Ministry of Labour

Every foreign-owned company must register with the Ministry of Labour to open a labour file. This step allows the company to hire employees, apply for work permits, and comply with employment regulations. Without a labour file, you cannot employ staff or process visas.

Step 7: Hire Omanis as Per Omanization Rules

Oman requires companies with 100% foreign ownership to employ at least one Omani national within the first year of operations. Additional Omanization quotas may apply depending on your sector. Failing to comply can result in penalties or delays in renewing licenses.

Step 8: Maintain Compliance Through Annual Reporting and Audits

Once operational, your company must remain compliant by submitting annual financial reports, conducting audits, and renewing licenses on time. Regular compliance ensures smooth operations, protects your reputation, and prevents fines from regulatory authorities.

Conclusion

Oman’s foreign ownership rules in 2025 are among the most progressive in the Gulf region. With 100% foreign ownership permitted in many industries, flexible legal structures, and opportunities in real estate, the Sultanate has created a fertile ground for investors.

By understanding the legal framework, complying with Omanization, and choosing the right structure, foreign entrepreneurs can successfully launch and expand their businesses in Oman while benefiting from its strategic location and supportive business environment.

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