According to the commercial law of Oman. All types of entities, even branches, representative offices of international companies require formal registration for a commercial license. It allows investors to perform initial tasks related to the establishment of a company, such as leasing commercial space, banking, engaging with vendors, securing a commercial name and many more.
Classification of Companies in Oman
A Company’s infrastructure is one of the most important things that needs to be stable in order to move forward at the initial stage of any company’s incorporation.
An entrepreneur looking to set up a business in Oman can choose from any of the following structures:
Limited Liability Company
A limited liability company (LLC) is one where each shareholder’s liability is limited to one’s share of the capital. An LLC company in Oman is required to have a minimum of 2 shareholders and 1 director. The minimum capital is required to start an LLC company in Oman. An Omani LLC is the most commonly preferred company type by foreigners wanting to set up a business in Oman.
Private Joint Stock Company
A joint-stock company the shares of which are not available for trading publicly is a private joint-stock company. A private joint-stock company in Oman requires a minimum of 3 shareholders (one of whom should be an Omani citizen holding at least 30% of the total shares) and a minimum share capital of OR 50,000 (about 130,000 USD).
Public Joint Stock Company
A joint-stock company is one of the capitals of which is distributed as stocks. The shares of a public joint-stock company in Oman can be traded publicly. The minimum share capital required to start such a company is OR 150,000. A joint-stock company may not be incorporated without the approval of the Ministry of Commerce and Industry and the issuance of a license testifying that.
Limited Partnership
A limited partnership in Oman can be formed by 2 or more members. It requires at least 1 general partner and 1 limited partner to be registered. The general partner, who must be an Omani national, is liable for the debts and obligations of the partnership without limitation in liability. The limited partner bears limited liability, and is liable for the company’s debts and obligations only to the extent of one’s capital contribution.
Commercial Agency
A commercial agency in Oman is a company which is assigned to promote or distribute products or services of a foreign entity in the Sultanate. The primary function of such a company is to export goods and services to Oman by a foreign business. In a commercial agency in Oman, the role of a commercial agent can be assigned only to an Omani national registered with the Omani Chamber of Commerce or a local entity having at least 51% local shareholding.
Branch Office
A branch office in Oman can be set up by a foreign company looking to open an establishment in the Sultanate. For forming a branch, a local agent to sponsor Omani visas and licenses is required. The branch is also required to obtain an approval from the Ministry of Commerce and Industry (MOCI). Since a branch is not considered a legal entity separate from its parent company, the latter is liable for its activities and obligations.
Representative Office
A representative office can be started purely for market research or promotion purposes. It is not allowed to carry out commercial or business-related activities. A representative office in Oman is required to have at least 1 appointed individual who is a resident of Oman.
