Company Liquidation

Oman Company Closure

Starting a business is a major undertaking, but knowing how to properly close it is just as important. Whether your company has reached the end of its lifecycle, faced financial challenges, or undergone strategic shifts, understanding how to close a company in Oman is crucial to protect all stakeholders from future liabilities and ensure compliance with local regulations.

The most common method for closing a business in Oman is liquidation. It’s a clearly defined process but requires careful attention to detail to ensure debts are settled and all obligations are met.

Outlined below are the two types of company liquidation and the steps involved to close an Oman company, so you can navigate the process smoothly and avoid potential legal complications.

Types of Liquidation

Voluntary liquidation is when the company’s owners or shareholders decide to close the business. This could be due to financial losses, completion of the company’s objectives or simply to wind up the operations. In this case the process is initiated by the company and a liquidator is appointed to close the company.

Mandatory liquidation is when the court steps in to close a company, usually because it has become insolvent and unable to pay its debts. In this case creditors or even the company itself can petition the court for liquidation and the court will appoint a liquidator.

Steps for Liquidation in Oman

Regardless of the type of liquidation, the process involves the following steps:

Board Resolution and Shareholder Approval
For voluntary liquidation the company’s board of directors must first pass a resolution to liquidate the company. This is then approved by the shareholders. For mandatory liquidation this step is replaced by a court order for liquidation.
Appointing a Liquidator
Once liquidation is decided a liquidator is appointed to manage the process. This person or entity will manage the company’s assets, pay off any debts and distribute the remaining funds to the shareholders. For mandatory liquidation the court appoints the liquidator.
Public Announcement and Creditor Notification
A public notice must be published in the Official Gazette and two local newspapers stating that the company is being liquidated. Creditors have a specific time frame—usually 45 days—to file their claims.
Assets and Liabilities Assessment
The liquidator will assess the company’s financial situation which includes identifying all assets and liabilities. This ensures all debts are accounted for and company assets are valued for distribution.
Debt Settlement
The company’s debts must be settled first. The liquidator will use the company’s assets to pay the creditors, employees and other stakeholders. Once the debts are paid the remaining assets can be distributed to the shareholders.
Tax Clearance
The liquidator must obtain tax clearance from the Oman Tax Authority (OTA) to ensure that all corporate taxes, such as income tax, VAT (if applicable), and any other tax liabilities, are settled before the company can be fully closed. This step is crucial to ensure that there are no outstanding tax obligations, which could otherwise delay the process.
Cancellation of Commercial Registration
Once the debts are paid and tax obligations are cleared, the liquidator will submit a report to the Ministry of Commerce and Industry (MOCI) in Oman to cancel the company’s commercial registration.
Final Audit and MOCI Approval
The liquidator will then prepare a final audit report and submit it to the MOCI for approval. Once the MOCI approves the report the company is officially closed.
Official Gazette Announcement
Finally the completion of the liquidation is announced in the Official Gazette as a formal record of the company’s closure.

How Can Sovereign PPG Help?

Closing a company in Oman can be a complicated process, but Sovereign PPG makes it straightforward. Our experienced team has deep knowledge of local regulations and strong relationships with key government authorities, ensuring a smooth and compliant liquidation process. From appointing a liquidator to managing legal and financial obligations, we guide you every step of the way.

If you need assistance with liquidating your company in Oman or any other related onshore or offshore company closure, restructuring, or corporate services matter in Oman, the UAE, or the wider GCC region, please get in touch with us at +971 4456 1761 or email oman@SovereignGroup.com. Alternatively, you can complete the contact form below, and we will be happy to assist you.