doing business in oman april 2008. 14 april 2008doing business in omanpage 2 index of topics ►...

Doing business in Oman

April 2008

14 April 2008 Doing Business in Oman

Index of topics

► Business climate ► Legal system► Business structures► Tax system► Free Zones and Industrial Estates► Labour► Commercial issues► International Agreements and Treaties


Business Climate

► Business friendly government► A robust legal system► A vibrant capital market► The second best performing Arab Economy (out of 40)► The most peaceful country in the Middle East (out of 18)


Legal system

► Primary court► Appeals court► The Supreme court


Regulated industries

► Sector Law (Electricity and Water)► Banking► Insurance► Mining► Tourism► Privatisation► Telecom Regulatory Authority


GCC Privileges

► GCC nationals are treated at par with Omani nationals► GCC common market from 1 January 2008► GCC customs union already in force► GCC nationals ownership of real estate


Business structures

Short term► Branches of foreign companies ► Joint ventures

Long term► Limited Liability Companies (LLC)► Public Joint Stock companies (SAOG)► Closed Joint Stock companies (SAOC)► Commercial Representative Offices


Business structures (contd.)

Branch of a foreign company► 100% foreign ownership► A Contract with the Government or quasi Government

organisation is a pre-requisite► Registration is valid for the contract duration► Continuity of a branch operation is not guaranteed► Tax rates range from 5% to 30%► Branch of a GCC registered company is taxed at 12%

( not for Free Trade Zone entities) ► Effective tax rates may be higher due to related party

disallowances



Joint ventures► Not a legal entity► Taxable entity► Not a consortium► Share of profits is not taxable for partners► Usually contract specific► Liability of partners is unlimited



Mixed companies - LLC► Up to 70% foreign ownership is available ► No requirement for a sponsor► Limited liability of shareholders► Minimum capital of RO 150 K► Company is managed by a manager► Shareholder relationships are flexible ► No external reporting is required► Tax rate applicable is 12% on taxable income in excess of

RO 30,000► Dividend received by shareholders is not taxable



Mixed companies - Public Joint Stock Companies (SAOG)► Minimum capital of RO 2,000 K ► SAOGs are preferred for privatisation projects► Managed by a board of directors► High level of transparency and disclosures► Transferability of shares► Tax rate applicable is 12% on taxable income in excess of

RO 30,000



Mixed companies - Closed Joint Stock Companies (SAOC)► Minimum capital of RO 500 K ► Shares are not required to be offered to public► Managed by a board of directors► Exit option► Regulated by the CMA


Commercial Representative Offices

► Registrations are allowed► Specific functions – Mainly promotion/liaison► Imports/ Exports/ Sales – not allowed


100% Foreign Owned Companies

► FCIL permits 100% foreign owned entity► Special approval from the Council of Ministers is

necessary► The minimum capital is RO 500K► A number of companies have been already registered


Omani tax system

► Corporate tax is payable by all entities► No personal taxation► Customs duty @ 5%► Social security for Omani employees ► Vocational training levy - RO 100 per employee► No sales tax or VAT► No stamp duties► A new Tax Law is expected► Introduction of VAT ?


Omani tax system (contd.)

Corporate tax

Current tax rates

Min Max .► Any company registered in Oman 12% 12%► Branches of GCC companies 12%

12%► Branches of other foreign companies 5%

30%► Final WHT on certain types of payments 10% 10%


Omani tax system (contd.)

Tax exemptions

5 years tax exemption for:► companies registered in Oman ► engaged in activities such as:

► Industrial, Fishing and Fish processing, Exports► Agriculture, Tourism, Public utility► Education, Hospitals, Airlines, Shipping

► A further renewal of 5 years is possible► Losses during tax exemption period are allowed to be

carried forward in specific circumstances


Land Ownership

► Generally limited to Omanis► GCC nationals – under certain circumstances► Foreigners – in Integrated Tourism complexes


Intellectual Property related laws

► Trade marks law► Patents law► Copyrights law


International Agreements and Treaties

The Sultanate of Oman has entered into Double Tax Treaty (DTT) agreements with a number of countries.

There are also a number of Investment Protection Agreements with several countries.

A Free Trade Agreement has been signed with the USA

Thank you all

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