How to establish a company in Sultanate of Oman Step-by-Step Legal Guide
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In Episode Two of this legal guide series on how to establish a company in the Sultanate of Oman, we stopped at the point of discussing the variety of entities that can be formed in the Sultanate. We noted that choosing between the different entity types available in the Sultanate requires careful study by the investor so he can make the appropriate decision about which entity to form for conducting his commercial activities in Oman.
Given the importance of that step in creating a commercial entity in the Sultanate, we prepared a comparison of the main commercial structures that can be established in Oman in the form of a comparative table containing the basic data an investor needs when deciding which commercial structure to set up.
Continuing from the foregoing, it is necessary for the investor to understand the requirements he must satisfy and the documents he must provide to begin the process of establishing the desired commercial structure in the Sultanate.
Accordingly, in our third episode we address the pre-establishment and preparatory requirements, as follows:
Pre-establishment and preparatory requirements
Before beginning the official registration process, investors must satisfy several basic conditions and prepare the necessary documents. The first step includes reserving a trade name that has not been previously registered with the Ministry of Commerce, Industry and Investment Promotion. The proposed name must not duplicate existing registrations, must not contain offensive or misleading terms, and must not imply affiliation with government institutions without authorization. Names that include the words “Oman” or “Omani” require special approval.
Foreign investors must also determine capital requirements based on their chosen business structure and activity. Some entities, such as single proprietor companies and branch offices, do not impose a mandatory minimum capital.
Limited liability companies (LLCs) typically require a minimum capital — for entities fully owned by non-nationals this is usually OMR 20,000 (twenty thousand Omani Rials), whereas companies with Omani or GCC participation generally require a higher minimum, typically OMR 150,000 (one hundred fifty thousand Omani Rials). Certain regulated activities (for example banking and insurance) may require higher capital amounts.
Evidence of deposit of the capital into an Omani bank account must be provided at the time of registration. The document-preparation phase requires special attention because incomplete or inaccurate submissions are the main cause of registration delays.
The essential documents include the following:
- A memorandum and articles of association setting out the company’s objectives, shareholder structure, management provisions, and governance procedures (this requires careful drafting).
- Copies of passports and proof of residence for all shareholders and directors.
- Board resolutions or powers of attorney authorizing the incorporation.
- The registered lease contract for the company’s premises filed with the municipality.
- A business plan and feasibility study for certain regulated activities.
All documents originally written in foreign languages must be translated into Arabic by a certified legal translator and authenticated by the relevant authorities, such as embassies and the Ministry of Foreign Affairs.
Establishing a commercial entity in the Sultanate, before commencing the official registration process, requires investors to meet several basic conditions and prepare the necessary documentation to complete the incorporation and registration steps in a legally compliant manner. We intend to explain these steps in a detailed, step-by-step manner so readers can fully understand them; this will be covered, God willing, in the next episode. We hope you will join us in the upcoming episodes, God willing.