Corporate Law at Oman
Here’s an overview of Corporate Law in Oman, outlining the legal framework for establishing and operating companies there:
Corporate Law in Oman
1. Legal Framework
The primary law governing companies is the Omani Commercial Companies Law (Royal Decree No. 18/2019), which came into effect in August 2020.
This law replaced the old Commercial Companies Law (Royal Decree No. 4/74) to modernize and harmonize company legislation.
Other relevant laws include the Foreign Capital Investment Law and Securities Market Law.
2. Types of Companies in Oman
Limited Liability Company (LLC) (S.A.O.C. – Closed Joint Stock Company)
Public Joint Stock Company (PJSC) – for companies listed on the Muscat Securities Market
General Partnership
Limited Partnership
Sole Proprietorship Establishment
Branch of a Foreign Company
The most common form is the LLC, which requires at least two and a maximum of 50 shareholders.
3. Company Formation
Registration is done through the Ministry of Commerce, Industry, and Investment Promotion (MoCIIP).
Requirements include:
Minimum capital (varies by company type; LLC generally requires OMR 150,000 minimum capital for public companies).
Clear definition of company activities.
Submission of Articles of Association.
Foreign investors must obtain an investment license from the Oman Investment Authority (OIA) or its subsidiaries.
4. Ownership and Foreign Investment
Oman allows 100% foreign ownership in most sectors after the new Foreign Capital Investment Law.
Certain strategic sectors may still have restrictions or require local partners.
Previously, many companies required at least 30% Omani ownership, but reforms have eased this.
5. Governance
LLCs must have a manager or managing director.
Public Joint Stock Companies require a board of directors and must comply with stricter governance rules, including shareholders’ meetings and disclosure.
Companies must keep statutory books, prepare annual financial statements, and submit reports.
6. Taxation
Corporate income tax rate: Generally 15% (varies by sector, e.g., oil companies taxed at higher rates).
Value Added Tax (VAT) at 5% is applied on goods and services.
Free zones like Salalah Free Zone offer tax exemptions.
7. Mergers, Acquisitions, and Insolvency
Regulated under the Commercial Companies Law and specific regulations.
Insolvency law includes provisions for liquidation and bankruptcy.
Shareholder approval is typically required for mergers and major changes.
8. Compliance
Companies must comply with periodic filings, audits, and disclosure rules.
Directors and managers have fiduciary duties.
Penalties exist for non-compliance, including fines and business closure.
Summary
Oman’s corporate law system aims to encourage foreign investment while maintaining regulatory oversight and corporate governance standards. Recent reforms have made it easier for foreign investors to establish and fully own companies in Oman.
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