Setting Up A Business In Oman

1. 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.

2. 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...