Why Oman Appeals to Foreign Investors
Oman is a stable Gulf monarchy diversifying away from oil, driving foreign investment through the Oman Vision 2040 programme into logistics, tourism, industry and IT.
- Full company ownership with no mandatory local partner — available on the mainland, not just in free zones.
- Strategic location outside the Strait of Hormuz — the port of Duqm and other deep-water ports provide direct access to the Indian Ocean, bypassing the strait’s shipping risks.
- Standard corporate tax rate of 15%, reducible to 3% for qualifying small and medium businesses.
- VAT of just 5% — one of the lowest rates in the world.
- A growing network of double taxation agreements with dozens of countries.
- Developed free zones offering tax holidays and customs benefits.
100% Company Ownership: What Changed and When
The key change many investors still aren’t aware of: since January 2020, following the Foreign Capital Investment Law (Royal Decree 50/2019), a foreigner can own 100% of a mainland Omani company — with no mandatory local partner. Before this reform, the standard requirement was a local partner holding at least 30%, which is why older materials and some websites still cite “up to 70% foreign ownership” — that information is outdated.
The reform also simplified the registration process and removed several previous barriers to foreign capital. That said, a “negative list” remains in force — a list of activities where restrictions apply or where participation by an Omani or GCC national is required:
- certain retail trading and brokerage/intermediary activities;
- air transport and inland waterway transport;
- certain broadcasting activities (TV and radio);
- a range of activities reserved for Omani nationals under the “Omanisation” policy.
A special case is legal services: in this sector, under Oman’s obligations to the US-Oman Free Trade Agreement, foreign participation is capped at 70%.
The full, current list of negative-list activities is published by the Ministry of Commerce, Industry and Investment Promotion (MOCIIP) — the exact status for a given activity code should be checked before registration.
Types of Companies You Can Register in Oman
- Limited Liability Company (LLC) — the most common vehicle for foreign business, 2 to 40 shareholders, permits 100% foreign ownership outside the negative list.
- Branch of a foreign company — registered under a parent company that has operated for at least 3 years, subject to a contract or project in Oman and MOCIIP approval.
- Representative office — cannot conduct commercial activity, used for marketing, market research and coordination with local partners.
- Joint venture — a contractual partnership with a local or foreign partner for a specific project.
- Free zone company — registered under the rules of a specific zone (Duqm, Salalah, Sohar, Al Mazunah and others), usually with 100% foreign ownership and customs benefits.
- Public joint stock company (SAOG) — a public form used for large projects and IPOs, requiring substantial share capital and a minimum number of shareholders.
- Closed joint stock company (SAOC) — a non-public joint stock form, minimum 3 shareholders.
Minimum Capital: the New Rules
Before the 2020 reform, foreign-owned companies were required to hold share capital of at least OMR 150,000 (about $390,000). The Foreign Capital Investment Law abolished this fixed minimum for foreign-owned companies on the mainland — today there is no statutory capital threshold for a foreign-owned LLC.
In practice, the capital figure declared at registration is still driven by the stated activity, the requirements of the relevant licensing authority, and the number of investor/employee visas the company plans to obtain — so a realistic starting capital for most service and trading companies still begins in the low thousands of dollars. In free zones, capital requirements are set by the individual zone authority and are often lower than on the mainland.
Joint stock companies (SAOG/SAOC) are a separate case — the Commercial Companies Law sets its own capital requirements for them (in particular, at least OMR 2,000,000 for a public SAOG), which the 2020 reform did not affect.
Oman’s Free Zones and Special Economic Zones
Important: incentive periods and terms differ between Oman’s free zones — they are not a single uniform package, as some overview articles suggest. Below is the data for each key zone individually, based on the official pages of the regulator OPAZ (Public Authority for Special Economic Zones and Free Zones).
|
Zone |
Tax holiday |
Key features |
|---|---|---|
|
SEZ Duqm |
up to 30 years, renewable for a further 30 years |
the country’s largest zone, deep-water port, industrial and logistics hub |
|
Salalah Free Zone |
30 years |
logistics and industry in the south, next to the port of Salalah, customs duty and VAT exemption within the zone |
|
Sohar Free Zone |
up to 25 years |
industry, petrochemicals, logistics next to the port of Sohar |
|
Al Mazunah Free Zone |
30 years |
cross-border trade with Yemen |
|
Knowledge Oasis Muscat |
exact official figures not published |
technology and IT hub; the only zone where several sources cite a paid-up capital requirement of ~OMR 20,000 |
|
Dhahirah and Rawdah (new zones, 2025) |
10 years by default (new law’s standard) |
established by Royal Decree 87/2025 and 88/2025, still at an early stage of development |
How this fits with the 2025 reform: Royal Decree 38/2025 (in force since 14 April 2025) created a unified regulator, OPAZ, and set a standard tax-exemption period of 10 years, renewable twice (up to 30 years for certain priority activities), for new residents registering under the new rules. At the same time, the law explicitly preserves previously granted incentives for companies registered before it came into force — which is why Duqm, Salalah, Sohar and Al Mazunah, as of 2026, continue to officially quote their historical 25–30-year terms (see table above). The exact way the new 10-year standard will apply to newly registered companies is expected to be clarified by the law’s executive regulations — so the applicable incentive period for a specific zone should be confirmed directly with that zone’s authority before registering.
Free zone companies generally receive 100% foreign ownership, exemption from customs duty on imports/exports within the zone (the standard 5% rate applies only when goods enter Oman’s mainland market), and simplified visa procedures for staff. Banks, insurers, telecom operators and certain transport activities are excluded from this general regime.
Taxation in Oman
|
Tax |
Rate |
Comment |
|---|---|---|
|
Corporate tax (standard rate) |
15% |
On the profits of companies registered in Oman |
|
Corporate tax (reduced SME rate) |
3% |
Capital ≤ OMR 60,000, annual revenue ≤ OMR 150,000, average headcount ≤ 25; does not apply to banking, insurance, financial services, extraction of natural resources, or air/sea transport |
|
VAT |
5% |
In effect since April 2021 |
|
Customs duty |
5% |
On imports of most goods from outside the GCC |
|
Withholding tax |
10% |
On royalties, management and technical service fees, R&D and software-use fees paid to foreign companies with no permanent establishment in Oman |
|
Petroleum sector income tax |
up to 55% |
A separate regime for companies operating under production-sharing agreements in oil and gas — does not apply to ordinary trading and service companies |
An important clarification: withholding tax on dividends and interest has been suspended by royal directive since January 2023 — such payments are not currently subject to the 10% withholding tax. The 10% rate remains in place only for royalties, service fees, R&D and software-use fees paid to non-resident recipients.
There is no personal income tax in Oman — including on the salaries of foreign employees.
Local Hiring (Omanisation) Requirements
Oman runs an “Omanisation” policy — a gradual replacement of foreign labour with Omani nationals. Specific local-hiring quotas are set by the Ministry of Labour and vary by economic sector, activity type and company size — there is no single rate across all industries, so the exact percentage should be checked against the specific activity code when planning headcount. In free zones, local-hiring requirements are generally lighter than on the mainland, or absent altogether, depending on the individual zone’s rules.
Registering a Branch of a Foreign Company
Registering a branch is a workable option for companies that already have a contract or project in Oman, without creating a separate legal entity. Key requirements:
- the parent company must have been operating for at least 3 years;
- a signed contract or project in Oman is required;
- renting office premises in Oman is mandatory;
- approval from the Ministry of Commerce, Industry and Investment Promotion (MOCIIP) is required.
How Much Does It Cost to Open a Company in Oman
There is no single official price list for registration and licensing that applies uniformly to the mainland and every free zone — MOCIIP and the zone authorities quote an exact figure on request, for a specific activity. The ranges below are indicative market figures, not fixed tariffs.
|
Cost item |
OMR |
USD (approx.) |
|---|---|---|
|
Turnkey registration (MOCIIP government fees + commercial licence) |
1,000–2,500 |
$2,600–6,500 |
|
Opening a bank account |
up to 200 |
up to $500 |
|
Office rent (Muscat, Class B, ≈100 m²) |
200–450/month |
$520–1,170/month |
|
Investor/work visa |
50–300 |
$130–780 |
|
Other administrative costs (translations, notary, courier) |
500–1,000 |
$1,300–2,600 |
Important: the “turnkey registration” line combines the government fee with the cost of the service that obtains it — the actual split depends on the activity and the operator chosen; no separately published “licence only” tariff could be found, so we do not present one as a fixed figure.
|
Zone |
What drives cost |
Comment |
|---|---|---|
|
Sohar Free Zone |
warehouse/plot rent ≈ OMR 20–40 per m² per year |
priced per m² per year, not per office — the smallest “Business Support Services” format starts at 20 m² |
|
Duqm, Salalah, Al Mazunah |
public rental and licensing tariffs are not disclosed |
exact cost is quoted individually by the zone authority for a specific project |
|
Knowledge Oasis Muscat |
an additional paid-up capital of ≈ OMR 20,000 (~$52,000) is required |
the only zone with a separate capital requirement — do not confuse this with mainland registration, where there is no fixed minimum |
The key difference from the mainland: in the industry- and logistics-oriented zones (Duqm, Sohar), cost is driven primarily by the size of the warehouse or industrial plot rather than an “office” in the usual sense — none of Oman’s zones officially offers a small flexi-desk product comparable to some UAE free zones.
Note: there is no fixed minimum share capital today for a foreign-owned mainland LLC (see the section above) — the capital amount is set individually based on the activity and visa quota, not a single tariff. The exception is Knowledge Oasis Muscat, where several sources indicate a paid-up capital requirement remains in place (see table above).
The total cost of setting up a company in Oman depends on the activity, the chosen zone (mainland or a specific free zone), the number of visas, and whether a physical office or production site is required — an exact estimate is calculated individually for each project.
Step-by-Step Registration Procedure
- Choose the activity and the legal form of the company.
- Check the activity against restrictions on the foreign investment “negative list”.
- Reserve the company name via the Invest Easy / Oman Business Platform portal.
- Prepare the constitutional documents (memorandum of association, shareholders’ resolution, powers of attorney if needed).
- Submit the Commercial Registration application online.
- Obtain initial approval from MOCIIP.
- Rent office premises and obtain the lease agreement (a mandatory requirement for licensing).
- Obtain sector-specific approvals (if the activity requires a licence from a specialised body — e.g. healthcare, education, finance).
- Pay the government fees and obtain the commercial licence.
- Register with the Oman Tax Authority and, if the turnover threshold is exceeded, register for VAT.
- Open a corporate bank account.
- Arrange visas and work permits for foreign staff and the investor.
Required Documents
At the initial approval stage
- copies of shareholders’ passports;
- a business plan or a brief description of the planned activity;
- for corporate shareholders — constitutional documents and a certificate of incorporation from the country of registration, legalised and translated.
At the final registration stage
- the company’s memorandum of association;
- the office lease agreement;
- proof of share capital payment (if applicable to the chosen form);
- sector-specific licences/approvals (if required).
Double Taxation Agreements
According to the Oman Tax Authority, Oman currently has 39 double taxation agreements in force with other countries, and the network is still growing — for example, an agreement with Tanzania was signed in late 2024 and is in the process of entering into force. These agreements help avoid double taxation of profits, dividends and royalties between Oman and the investor’s country of residence.
Common Mistakes and Myths About Setting Up in Oman
- Myth: “a foreigner can own at most 70% of a company in Oman”. Since January 2020, 100% foreign ownership has been available on the mainland for most activities; the 70% cap today applies only to specific activities (such as legal services) and to certain items on the “negative list”.
- Clarification, not a myth: “Oman’s free zones offer 25–30-year tax holidays”. This remains true for the existing zones — Duqm (up to 30 years, renewable), Salalah and Al Mazunah (30 years), Sohar (up to 25 years) — which retain their historical incentive periods under grandfathering rules. But since April 2025 a unified law (Royal Decree 38/2025) has set a standard 10-year term, renewable twice, for new residents of the new zones (Dhahirah, Rawdah) and, presumably, for future registrations — the exact application to the existing zones is to be clarified by the law’s executive regulations.
- Myth: “the minimum LLC capital is a fixed amount from $3,000”. There is no formal statutory minimum capital for foreign-owned mainland LLCs today — the amount is set individually based on the activity and visa quota.
- Myth: “dividends and interest are subject to a 10% withholding tax”. This tax has been suspended since January 2023 — the 10% rate remains only for royalties, services, R&D and software-use fees paid to non-residents.
“The 2020 reform made Oman one of the few Gulf countries where you don’t need a local partner to own a mainland business. That is precisely why it’s important to verify the exact status of a specific activity against the negative list and the current thresholds for the reduced tax rate — these details often determine the final deal structure.”
How We Can Help
Dynasty Business Adviser provides end-to-end support for company registration in Oman:
- checking the activity against negative-list restrictions and selecting the optimal legal structure;
- registration on the mainland or in one of the free zones;
- obtaining sector-specific licences and approvals;
- opening a corporate bank account;
- arranging investor and work visas;
- ongoing tax and accounting support for your Omani company.
What to Do Next
If you are considering setting up a company in Oman, it makes sense to start by checking your activity against the “negative list” restrictions and choosing between mainland registration and one of the free zones — this determines the ownership structure, the tax regime, and the total project cost. The Dynasty Business Adviser team is ready to review your situation and propose the optimal structure.
Get a consultation
This material was prepared based on public sources: the Foreign Capital Investment Law (Royal Decree 50/2019), Royal Decree 38/2025 on Special Economic Zones and Free Zones, and Royal Decrees 87/2025 and 88/2025 establishing the Dhahirah and Rawdah zones; the official pages of the regulator OPAZ (Public Authority for Special Economic Zones and Free Zones) for the Duqm, Salalah, Sohar and Al Mazunah zones; data from the Oman Tax Authority and the Ministry of Commerce, Industry and Investment Promotion (MOCIIP); and PwC Worldwide Tax Summaries, EY and Dentons analyses of the 2025 reform. Cost data for licensing and rent in the free zones is indicative only, as no single official price list is publicly available. The information is current as of the publication date (updated 24.07.2026) and is subject to change — before making decisions, please confirm current rules with a Dynasty Business Adviser consultant.
