Oman: Setting Up A Business In Oman

Last Updated: 20 March 2018
Article by Catherine Jaskiewicz

A. Setting-up a presence in Oman

The Sultanate's political stability and modern trading system, makes Oman one of the most attractive hubs in the Middle East for international businesses. Setting up a business in Oman can be a cumbersome procedure and it is advisable to involve a locally practicing attorney in the establishment process, as the majority of the documents requested by the Omani governmental authorities are required to be drafted in Arabic. This poses a challenge for business owners who have do not speak Arabic fluently. Generally, the process of setting up a business is not a particularly lengthy one, if the local regulations are adhered to and the client submits apostilled or legalized copies of the required documents from its country of origin/registration.

B. Choosing the appropriate legal structure for the business activity that you wish to carry out in the Sultanate

As it is obligatory for any company doing business in the Sultanate to have a legal presence in Oman, the first step for any potential business owner should be  to carefully review all of the available legal structures for foreign investments in Oman to determine the most appropriate legal form for the Oman based subsidiary of the client. We will focus on the most popular business models for joint foreign and Oman investments in the Sultanate including engaging a local agent, establishing a branch office, and setting up Limited Liability Company.

1. Commercial Agency

Article 1 of the Oman Commercial Agencies Law (issued by Royal Decree No. 26/1977, as amended) defines a Commercial Agency as "any agreement whereby a manufacturer or supplier outside Oman assigns one or more merchants or commercial companies in Oman to sell, promote or distribute goods and products or supply services whether in his capacity as an agent, representative or intermediary for the product of the original supplier who has no legal presence in Oman, against a profit or commission." Effective representation by an agent has both practical and commercial benefits. Companies operating as agents must (i) be registered in the commercial register and with the Oman Chamber of Commerce and Industry (ii) list conducting of commercial agency activities amongst their business objectives and (iii) have an Oman shareholding of minimum 30% (in accordance with the Commercial Agencies Law the minimum national shareholding is fixed  at 51%, however the Ministry of Commerce and Industry have introduced a policy allowing Omani companies with foreign shareholding of up to 70% to act as local agents).

In general, appointing a local agent is a rather straightforward process. It requires the signing of a commercial agency agreement (which may have a non-exclusive character) between the parties, and subsequently, the agent registering the agreement with the Ministry of Commerce and Industry. Also, following the amendments to the law introduced by Royal Decree No. 34/2014 the agency agreement between the principal and agent can clearly provide for the conditions for termination of such contract, as opposed to the previous wording of the law which allowed a foreign principal to terminate the agency agreement without having to pay a compensation only if the registered local agent was in breach of the agency agreement.

2. Branch office of a foreign company

To start with, it's important to note that only foreign companies performing a contract for the government entity of Oman are allowed to register a branch office in the Sultanate. Establishing a legal presence through a branch is an attractive model as there are no minimum share capital requirements, a branch may be fully owned by the foreign mother company (i.e. the foreign company reserves a sole control over the entity that receives payments under the governmental contract) and the administrative set-up process is considerably easier and more expeditious than forming a company in Oman.

On the other hand, a branch office lifespan is duration of the government contract under which the client is providing services in Oman, and a branch commercial registration will expire with the main contract completion or termination; naturally the registration period may be extended, dependent on the foreign company securing a new government contract prior to the expiration of the contract under which the branch was established. Additionally, a branch will have a limited scope of services it can perform in the Sultanate, narrowed to the services listed under the government contract itself and will not be allowed to service the private-sector. The latter is derived from the fact that, for liability purposes, a branch office is not considered to be a separate legal entity from the foreign mother company.

3. Limited liability company

A limited liability company (an LLC) is most often chosen by foreign investors due to a fact that it may continue to exist indefinitely, service both private and government clients, as well as having a shorter registration process, and costing less to establishing comparison to other entity that a foreign company may form with a local partner, i.e., a joint stock company (which is required under Oman law for conducting business in certain fields, e.g., insurance or investment companies). Notably, LLCs are not required to be listed on the Muscat Securities Market in Oman and they must comply with less procedural, disclosure and corporate governance requirements than joint stock companies. An LLC is formed by at least two and no more than forty natural or legal  persons, with the minimum registered capital of OMR 150,000 (approx. 390,000 US Dollars) for foreign ownership.

A foreign investor may own up to 70% of an LLC's equity, however, the allocation of the capital contribution and the distribution of profits may be altered in the shareholders agreement. Furthermore, the foreign shareholding ratio may be increased to 100% subject to the Oman Council of Ministers approval, usually dependent on the following factors: (i) the foreign investor can demonstrate that the entity is in need of expertise which is not readily available in Oman; or (ii) the foreign investor is participating in the development of the economy by investing substantial capital in the country.

Importantly, an Omani limited liability company may be fully owned by GCC or American (assuming the LLC is covered under the US-Oman Free Trade Agreement) natural persons or corporate entities, and the minimum registered capital of OMR 20,000 (approx. 52,000 US Dollars), typically reserved for the fully Omani owned local companies.

C. Hiring national workforce

The state of Oman has rigid restrictions on the number of foreign nationals permitted to work within its borders, especially if there are Omani citizens available to fulfill these roles. Foreign nationals hoping to work in Oman require an employment visa, to obtain such, a foreign national must be aged between 21 to  60 and the employer must secure a labour permit issued by the Oman Ministry of Manpower (Ministry of Labour) for each foreign employee.

Since 1988 the Ministry of Manpower has espoused a policy commonly referred to as "Omanisation" which is essentially a set of guidelines specifying the quotas of Omani nationals required to be employed by private companies operating in various sectors (and as a percentage of the overall work force). The "Omanisation" percentages are updated from time to time based on further directives issued by the Ministry of Manpower, certain specified categories of employment are reserved exclusively for Omani nationals. "Omanisation" can be a hurdle for multi-nationals and foreign companies looking to establish a business presence in Oman, as the inability to attract and retain the requisite numbers of Omani nationals can have adverse consequences. Recently, the Ministry of Manpower issued a Ministerial Decision No. 38/2018, which imposed a six-months' ban on hiring expat employees in eighty-seven different occupations, falling under the sectors of information systems, sales, marketing, administration, insurance, media, airports, engineering, technical professions, and human resources.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions