Oman is currently experiencing economic growth and is encouraging foreign businesses to invest in the country. In addition to already strong and well-developed industries like oil and tourism, the country is working to develop other industries, including mining, construction and infrastructure, import and export trade, agriculture. As technology has become a quintessential part of the modern life, major blue chip companies as well as knowledge and technology-driven SMEs and start-ups have been enjoying the benefits offered to the companies in the IT sector. Foreign citizens are able to open a business in Oman, although there are a number of requirements and limitations that must be considered.
By the Omani Law, foreign companies and individuals, except for GCC or US shareholders, are generally required to have an Omani partner (individual or company) with a minimum 30% shareholding in order to form an LLC. Minimum share capital of OMR 150,000 ($390,000) is no longer required to be deposited to register an LLC with foreign participation, however a part of this amount has to be available as a proof of funds.
Types of sponsorship
As mentioned above, there are two ways of partnerships: with the Omani individual or 100% Omani owned company.
Local sponsorship concept is not common outside of the GCC region and might potentially be frustrating for the foreign investor. We at PRO Partner Group totally understand clients concerns but through our secure and trusted nominee structure, we ensure your interests are fully protected in accordance with the law. When you partner with us, PRO Partner Group become the Omani 30% professional corporate partner in the LLC, taking away any pressure of independently finding a trustworthy local sponsor.
Individual sponsorship: Individual sponsor is an individual Omani national who is suggested to sponsor your business by holding 30% of shares in your company. He or she must be an Omani citizen over the age of 21, some activities require them to hold certain degree levels and have an experience in the same field as of the new company. Usually they are business professionals or government employees. Profits do not have to be shared to reflect the percentage shareholding, and in most instances, the local sponsor is paid a set annual fee in exchange for full power of attorney and control over the business activities.
Corporate Sponsorship: Without a doubt, one of the greatest advantages is that your corporate sponsor will never interfere with the business. Additionally, entrepreneurs maintain 100% of the financial benefits from the business along with full control. Corporate sponsorship deals provide entrepreneurs with more security. Dealing with individual sponsors can present ownership problems in the event that a partner passes away or retires early. One way that entrepreneurs opt to mitigate this risk is through ‘succession planning,’ or having a legally-binding plan in place. When working with a corporate entity, you don’t need to worry about succession planning.
Corporate sponsorship is similar to having an individual sponsor in that it affords you the same rights. However, the process is less risky as it is transparent from start to finish. It also provides you with the support of an entire corporate team, rather than just one individual.
Advantages of partnering with PRO Partner Group
Oman’s Ministry of Commerce and Industry will bring a new law into force as of January 2020, which aims to make Oman an attractive investment environment. The introduction of this law comes as a move to ensure the stability of foreign investment in the country. The new Law has several incentives and advantages for foreign investments so to encourage their flow and stability in the Sultanate, as they have an impact on economic development.