How to establish a company in Sultanate of Oman Step-by-Step Legal Guide
(Episode 2) Ref 1
Permeable
In the first episode of the legal guide series on how to establish a company in the Sultanate of Oman, we discussed the importance of understanding the legal and regulatory framework for any entrepreneur or company seeking to establish a commercial presence in. Sultanate.
Key Legislation: Commercial Companies Law (RD 18/2019)
We have briefly explained the basic legislation governing the establishment of companies. It is the Commercial Companies Law promulgated by (Royal Decree number (18/2019) which specifies the permitted business structures and their requirements.
In addition, we noted that it is essential for foreign investors to comply with the regulations and rules issued by the Ministry of Commerce, Industry and Investment Promotion, the Capital Market Authority, and other regulatory bodies specialized in various sectors in order to establish a sound and robust business entity in the Sultanate.
On the other hand, we have explained that it is necessary to choose a legal structure when establishing a commercial entity, and we have stated that among these structures are the limited liability company and the one-person company, which leads us in our second episode to discuss the extent to which it is permissible to establish branch offices for foreign companies, as well as the opportunity to establish an entity in the Sultanate’s free zones, according
Branch Office:
Foreign companies may establish a branch in the Sultanate of Oman to execute government contracts or specific projects. A branch is not considered a separate legal entity from its parent company, which therefore bears unlimited liability for its operations.
Branches are limited to conducting the activities specified in their commercial registration and require a local service agent to facilitate government dealings. This structure does not require a minimum share capital.
Free Zone Entities:
The free zones in the Sultanate (including Salalah, Sohar, and Al-Mazyouna) offer specialized structures and significant incentives, including 100% foreign ownership, tax exemptions of up to 30 years, full repatriation of profits, and simplified import and export procedures.
These zones are ideal for companies focused on international trade, logistics, and manufacturing for export markets. Each free zone has its own regulatory authority and specific permitted activities.
Understanding the differences and variety of entities that may be established in the Sultanate can be somewhat complex, making it necessary for the legal representative handling investor requirements to ensure that the establishment of the commercial entity aligns with the investor’s intended objectives in Oman.
Therefore, we have decided to present a comparison of the main business structures that can be established in the Sultanate in the form of a table, as follows:
| Entity Type | Minimum Capital | Ownership Restrictions | Liability | Suitable For |
| LLC | OMR 20,000 | Up to 100% foreign allowed | Limited | Most business activities |
| SPC | None | 100% foreign allowed | Limited | Individual entrepreneurs |
| Branch Office | None | Requires government contract | Unlimited | Government projects |
| Free Zone | Varies by Zone | 100% Foreign Ownership Allowed | Limited | Export-oriented businesses |
To establish a commercial entity in the Sultanate, and before beginning the official registration process, investors must meet several basic conditions and prepare the necessary documents to complete the first step towards a sound legal establishment. We will discuss this in detail in the next episode, God willing. We hope you will stay tuned for the next episodes.