How do I chose the Share Capital and Grade of company in Oman?

How do I chose the Share Capital and Grade of company in Oman?

Whilst registering a limited liability company (LLC) in Oman clients often enquire about the share capital requirements and the ‘grade of the company’ and how does the grade specified by the MOCI benefits the LLC in Oman.

The Ministry of Commerce and Industry (MOCI) specifies the following grades for an LLC in the Sultanate based on the company’s capital.

The grades for companies are as follows:

Whilst the minimum capital requirement of a wholly-owned Omani Company is RO 20,000, the MOCI grants an excellent grade company certain benefits over other grades.

*Please note that these capital requirements may be subject to change, please check with PPG team in Oman for updated information. 

100% Foreign Owned LLCs in Oman

As from January 2020, foreign citizens, companies and investors in Oman are now able to own 100% of their businesses in many industries in mainland Oman. Some activities in the mainland are still reserved for Omanis, and other activities still require a local Omani partner with a minority shareholding.

For more details on setting up a 100% foreign owned LLC in Oman see our detailed article below

Benefits of the various Company Grades in Oman

The benefits of an excellent grade company are based on the MOCI, Ministry of Manpower (MOM) and Tender Board practice and their internal policy and regulations. Therefore, there is no direct law or provision that defines the benefits and limitations applicable to the grades for companies.

The potential advantages for an excellent grade company as against lower grade companies are as follows:

1. An Omani company registered in the excellent grade category would be allowed to bid for any tenders produced by the Tender Board in Oman. Some tenders are restricted so as to only allow excellent grade companies to bid.
    
   
2. Excellent grade companies are granted larger quotas of foreign employees. MOM will expedite the process for granting expatriate employees clearances for companies in the excellent grade category.
   All other grades of company are also entitled to expatriate employee quotas, but they are not be granted the same special treatment that applies to excellent grade companies.
   
   Omanisation applies to all companies in Oman, the specific Omanisation requirements are in accordance with the commercial activity of the company and the job designations of the staff.
   
   
3. MOM has placed restrictions allowing foreign workers to take on certain categories of job title. Some of these decisions are only applicable to commercial entities registered as first, second, third or fourth grade companies and therefore excellent grade categories and branches of international companies can be exempt from these Omanisation requirements.

So there are significant benefit to being an excellent grade company in terms of expedition of applications – labour quotas, visas and clearances, as well as general benefits regarding the employment of expatriates and Omanisation.

The decision to increase the capital of a company to OMR 250,000 is a commercial decision and should be taken on the basis of the business and operations of a company as well as its capital requirements and its manpower requirements.

How can Sovereign PPG Help?

If you need assistance in setting up or restructuring your company in Oman, any other staffing, visa, local partner or PRO support matter in Oman, Abu Dhabi, Dubai, the wider UAE or Qatar, then please do get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi, email us at SovPPG@SovereignGroup.com or complete the contact form below and we will be delighted to assist you.