Oman is becoming one of the most promising business destinations in the Middle East. With a stable economy, strategic location, and investor-friendly reforms, many entrepreneurs are eyeing company formation in Oman as their next big move. Whether you’re a startup, SME, or international investor, this guide walks you through everything you need to know about how to establish a company in Oman.
Why Start a Business in Oman?
Oman offers an ideal environment for businesses looking to expand in the GCC. The government is focused on economic diversification through Vision 2040, which opens doors for industries like tourism, manufacturing, logistics, IT, and renewable energy.
Some of the key reasons to start a business in Oman include:
- 100% foreign ownership allowed in most sectors
- Zero personal income tax
- Growing free zones like Salalah Free Zone, Duqm Special Economic Zone, and Knowledge Oasis Muscat
- A strategic location connecting Africa, Asia, and Europe
- Business-friendly policies for foreign investors
Types of Business Entities You Can Register in Oman
Before your Oman business setup, it’s essential to choose the right legal structure. Here are the main types of entities:
Limited Liability Company (LLC)
Most popular structure for both local and foreign investors. Requires at least two shareholders. Foreign investors can now own 100% of an LLC without an Omani partner in approved sectors.
Sole Proprietorship
Suitable for small businesses and freelancers. Can only be formed by Omani nationals or GCC citizens.
Joint Stock Company (SAOG or SAOC)
Ideal for large businesses. SAOG companies can offer shares to the public, while SAOC companies are privately held.
Branch Office
A foreign company can open a branch in Oman to conduct business identical to its parent company. Requires a government contract or special approval.
Representative Office
Used for market research and promotion. Cannot engage in commercial activities or generate revenue in Oman.
Free Zone Company (FZC)
Formed inside Oman’s free zones, offering tax incentives, 100% foreign ownership, and customs exemptions.
Legal Requirements for Company Formation in Oman
Starting a company in Oman involves complying with several legal and regulatory steps. These are governed by the Ministry of Commerce, Industry, and Investment Promotion (MoCIIP).
Some important legal requirements include:
- Selecting a unique trade name
- Drafting a Memorandum of Association (MOA)
- Registering with the MoCIIP
- Getting necessary licenses and approvals
- Complying with Omani Labour Law
- Meeting minimum capital requirements (if applicable)
For foreign investors, approvals from the Foreign Capital Investment Law may apply based on the activity.
Step-by-Step Process to Establish a Company in Oman
Here’s a simplified breakdown of the steps to start your business in Oman:
Decide on the Business Activity
Make sure your proposed activity is allowed in Oman. Some industries may be restricted or require special permits.
Reserve a Trade Name
You must select and register a unique trade name with the MoCIIP.
Draft and Notarize MOA
Draft the company’s Memorandum of Association. It must be notarized by the Omani authorities.
Register the Company
Submit the application along with MOA, lease agreement, and ID copies. The MoCIIP will issue the Commercial Registration Certificate (CR).
Get Necessary Licenses
Depending on your business type, you’ll need to obtain licenses from relevant authorities like municipality, environment, or health department.
Open a Bank Account
Open a corporate bank account in Oman to deposit the capital (if required) and begin transactions.
Register with the Tax Authority
Get a Tax Identification Number (TIN) from the Oman Tax Authority.
Hire Employees and Register with ROP
Register your employees and company with the Royal Oman Police for labor and immigration purposes.
Required Documents for Company Registration in Oman
To complete your Oman company registration, you’ll need to prepare and submit several documents:
- Passport copies of shareholders
- Copy of trade name reservation
- Lease agreement for office premises
- Memorandum of Association (MOA)
- Shareholder resolution (if corporate shareholder)
- Board decision (for branch setup)
- Business plan (in some sectors)
- Power of Attorney (if using a legal representative)
- Approvals from regulatory bodies (if applicable)
All documents in foreign languages must be translated into Arabic and attested by the Omani Embassy.
Licensing and Permits Needed to Operate in Oman
Your business may need one or more of the following licenses depending on your activity:
Commercial License
Issued by the MoCIIP for general business activities.
Municipal License
Required for operating within a specific municipality.
Industrial License
Granted by the Ministry of Commerce and Industry for manufacturing-related businesses.
Environmental Permit
Issued by the Environment Authority for businesses impacting natural resources.
Tourism License
For hotels, travel agencies, or tour operators – issued by Ministry of Heritage and Tourism.
Professional License
Needed for professional services like consultancy, legal, or engineering.
Operating without the proper licenses may result in penalties or closure of your business.
Cost of Setting Up a Company in Oman
The cost of company formation in Oman depends on the business structure, sector, and location. On average:
- LLC setup: OMR 3,000 to OMR 5,000 (USD 7,800 to USD 13,000)
- Branch Office: Around OMR 2,000 (USD 5,200)
- Free Zone company: OMR 1,500 to OMR 3,000 (USD 3,900 to USD 7,800)
- License fees: Vary by activity
- Office rent: Depends on the region and space size
You should also factor in legal fees, consultancy charges, and visa costs.
Choosing the Right Location for Your Business in Oman
Choosing the best location depends on your business goals:
Muscat
Oman’s capital and the hub for financial services, trade, and government relations.
Salalah
Great for logistics and export-based businesses. Home to Salalah Free Zone.
Duqm
A fast-growing area ideal for industrial, oil & gas, and logistics sectors.
Sohar
Industrial zone with strong access to ports and manufacturing hubs.
If you’re looking for tax incentives and customs-free imports, setting up in a Free Zone is a smart choice.
Opening a Corporate Bank Account in Oman
Once your business is registered, you can open a corporate bank account. Major banks in Oman include:
- Bank Muscat
- Bank Dhofar
- Oman Arab Bank
- HSBC Oman
- Sohar International
Requirements generally include:
- Commercial Registration (CR)
- Shareholder documents
- Company MOA
- Proof of address
- Board resolution (if applicable)
Some banks may require a minimum deposit, especially for foreign-owned businesses.
Taxation and Compliance for Businesses in Oman
Oman offers a simple and competitive tax environment:
- No personal income tax
- Corporate income tax is 15% for most businesses
- Free Zone companies may receive tax holidays up to 25 years
- VAT (Value Added Tax) at 5% on goods and services
Your company must register with the Oman Tax Authority and file annual tax returns. Keep in mind:
- Maintain audited financial statements
- Comply with labor laws for employment and visa rules
- Renew your licenses and CR annually
- Withholding tax of 10% may apply on certain payments to non-residents
To avoid penalties, stay updated with Oman’s evolving tax and regulatory changes.
Conclusion
Company registration in Oman has become easier and more welcoming for international investors. From 100% foreign ownership to free zones and sector-friendly policies, Oman gives businesses a strong foundation to grow in the GCC.
Whether you’re starting a limited liability company, branch, or free zone business, make sure to follow all legal requirements, pick the right business location, and work with trusted local advisors for a smooth setup.
FAQs
Can foreigners own 100% of a company in Oman?
Yes, foreign investors can own 100% of an LLC in most sectors under the Foreign Capital Investment Law.
How long does it take to register a company in Oman?
The full process takes 7 to 15 working days, depending on your structure and document readiness.
Is it mandatory to have an office in Oman?
Yes, physical office space or a virtual office in free zones is required to obtain commercial registration.
Can I start an online business in Oman?
Yes, e-commerce licenses are available, especially in Muscat and the free zones.
What are the top free zones in Oman?
Salalah Free Zone, Duqm SEZ, Sohar Free Zone, and Knowledge Oasis Muscat are top choices.
Is Oman a good place to start a small business?
Yes, especially in sectors like IT, logistics, tourism, and education, Oman offers great potential.
Do I need a local partner in Oman?
Not anymore. Foreigners can now own full shares in many business sectors.
What taxes do businesses pay in Oman?
Only 15% corporate income tax and 5% VAT. No personal income tax applies.
What is the minimum capital for LLC in Oman?
Oman no longer enforces a minimum capital requirement, but it is recommended to have OMR 150,000 for credibility.
Can I open a bank account before registration?
No. You need the Commercial Registration (CR) and other documents to open a corporate bank account.
