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Set Up a Subsidiary in Oman

Set Up a Subsidiary in Oman

Opening a subsidiary in Oman involves establishing a separate legal entity that is controlled by a parent company. Our lawyers in Oman will present you with some key steps and considerations to keep in mind when opening a subsidiary in this country.

Requirements for setting up a subsidiary in Oman

All legal entities and individuals, including non-GCC (Gulf Cooperation Council) nationals, must adhere to Oman’s Foreign Capital and Investment Law, as per Royal Decree No 50/2019. This law requires that business activities be conducted through company types recognized by the Commercial Company Law, as per Royal Decree No 18/2019.

Non-GCC nationals must obtain a Ministry of Commerce and Industry license to open a subsidiary in Oman. Since 2020, it has been allowed for 100% mainland foreign ownership of limited liability companies in most business sectors, but it still requires approval from the Council of Ministers. This is also subject to certain conditions, including a minimum capital requirement of at least OMR500,000 and the company’s projects contributing to economic development. If a subsidiary in Oman is established as an LLC, it could potentially benefit from the change in regulation.

US companies have the opportunity to establish a subsidiary in Oman without the requirement of having a local Omani partner or sponsor. The ownership of the US company, as well as the ownership of its subsidiary in Oman, can consist entirely of US individuals or entities.

We can provide more details if you are interested in setting up a company in Oman, with 100% full foreign ownership.

Opening a subsidiary in the Omani Free Zones

Oman has established three free zones: Salalah Free Zone, Sohar Free Zone, Al Mazyunah Free Zone, and a special economic development zone at Duqm. These zones have their own regulatory laws and operate under specific rules and regulations that are different from those governing the rest of Oman. Our team can provide further guidance about company formation in Oman in these free zones.

Investors looking to open a subsidiary in the free zones in Oman can typically choose to set up a limited liability company with at least two shareholders.

Companies operating within these free zones in Oman are eligible for various incentives and facilities, including:

  • exemption from corporate taxes for up to 30 years;
  • no customs duty fees for goods and services;
  • permission for 100% foreign ownership;
  • unrestricted transfer of profit and invested capital;
  • low startup capital requirements.

Our accountants in Oman can help you with tax registration and compliance in these areas.

Why open a subsidiary in Oman

Setting up a subsidiary in Oman can be an attractive option for investors, for different reasons. Firstly, Oman’s strategic location in the Middle East makes it a gateway to the Gulf Cooperation Council (GCC) market. Establishing a subsidiary here can provide easier access to this regional market. There is also the option to open a branch in Oman to take advantage of this opportunity.

In recent years, Oman has been working to improve its business environment, including regulatory reforms to attract foreign investment and promote economic diversification. The Free Trade Agreement with the United States provides preferential access to these markets for US companies.

Additionally, here are some statistics about the country’s economy that can be of interest when opening a company or subsidiary in Oman:

  • In 2022, Oman had an average daily production of 1,064 million barrels of crude oil and condensates combined;
  • On average, Oman produced approximately 137.2 million cubic meters of natural gas per day in 2022;
  • In 2022, the total value of trading activities in Oman’s capital market amounted to OMR 23.7 billion;
  • Oman’s GDP was evaluated at over 114 billion dollars in 2022.

If you wish to learn more about opening a subsidiary, feel free to contact our lawyers in Oman for assistance.