Local license in Oman
As part of a plan to improve its economy, Oman announced in 2020 a new law called the Foreign Capital Investment Law (FCIL). This law lets companies that are owned by foreigners operate in Oman. The minimum share capital requirement was also taken away by the new FCIL.
To start a limited liability company, foreign companies and people must have an Omani national partner with at least a 30% stake in 37 protected sectors. Most of the time, these aren’t things that foreign investors are very interested in. GCC nationals or companies do not require a local national as a partner. Also, US citizens don’t have to follow the rule because the US and Oman have a free trade agreement.
Oman has been working very hard to make it easier to start a business. Online, a business can be registered with the Ministry of Commerce and Industry (MOCI). After registering, you can send in more paperwork, which can take between four and six weeks to finish. We can take care of all the paperwork and formalities, so you can focus on growing your business.
You will be Interested on : Business Setup & Company Registration Service Company in Oman
Understand Local Rules for Businesses in Oman
Before putting money into Oman, every foreign investor should understand a few rules and laws. Here are the important parts:
- Employment law. Companies that do business in Oman must follow RD No. 35 of 2003. A foreign worker can’t be hired in Oman without first getting permission from the Ministry of Manpower and a work permit. Since the 1970s, Oman has had a very active program to make people more like the locals. For each sector, the Ministry of Manpower sets Omanization quotas. It is important to know if your type of business is subject to a quota. Omani citizens have to pay 17.5% of their income into social security, but foreign workers don’t have to do this.
- Taxation. Businesses in Oman that make more than 100,000 OMR pay a 15% tax. When it comes to taxing income from selling oil, there are special rules. Rates can be as high as 55%. Most goods from outside the GCC have a customs duty of 5%, but there are exceptions for medical supplies and other essential items. Most goods and services sold in Oman must have a VAT rate of 5% added to them.
- Property ownership. Royal Decree 5/1980 says who can own land in Oman. This says that, unless something else is said, all land in Oman belongs to the state. Most of the time, foreign companies don’t own land outright. Instead, they have limited leases on it.
Keep reading : Business Setup Process in Oman
Benefits of Getting a Local Business License in Oman
Incorporation of Physical Presence Needs
There are many reasons to get a local license. Here are a few of the most important ones:
- Tax residency. Anyone who has a local license can apply for tax resident status in Oman.
- Local tenders. Businesses with local business licenses are often the only ones who can bid on government contracts. You will be able to bid on tenders that will help your business grow and make you money. A lot of the money that is spent in the country comes from the government.
- Future-proof your business. Many entrepreneurs start their businesses in free zones because they think that is the only type of license that will give them full ownership. However, the law has been changed so that a local license can also give you full ownership.
- Free trade with the USA. Because the US and Oman have a special free trade agreement, there are no tariffs on trade between the two countries.