Set up a company in Oman.
The strategically distinct GCC option: outside the Strait of Hormuz, deep-water ports on the Indian Ocean, 100% foreign ownership since 2020, and the lowest implemented VAT rate in the GCC. The first GCC state to commit to personal income tax (5% from 2028). Coordinated through senior local Omani counsel.
To set up a company in Oman, you choose a legal structure (most commonly an LLC — Sharikat That Mas’uliyya Mahdudah, equivalent to a UK Ltd or German GmbH), prepare the Articles of Association, register with the Ministry of Commerce, Industry and Investment Promotion (MOCIIP) via the Invest Easy portal, obtain the Commercial Registration (CR), open a bank account in Omani Rials, and register with the Oman Tax Authority and Public Authority for Social Insurance (PASI).
Since the 2020 FDI Law reforms, 100% foreign ownership is permitted in most sectors — a meaningful change from the previous Omani-partner requirement. Standard formation takes 3 to 6 weeks. CIT is 15% on taxable income above OMR 30,000 (reduced to 3% for qualifying SMEs). VAT is 5%, the lowest implemented rate in the GCC.
From 1 January 2028, Oman becomes the first GCC state to impose a broad 5% personal income tax on high earners (Royal Decree 56/2025) — threshold approximately OMR 30,000/year for foreigners. Grant & Graham coordinates the engagement through senior Omani legal and accounting counsel.
15% CIT, 5% VAT. 3% for SMEs. PIT from 2028.
Oman’s tax structure is the most reform-oriented in the GCC. Standard CIT 15% on profits above OMR 30,000. A genuine 3% reduced rate for qualifying SMEs registered with the Public Authority for SME Development. VAT 5% — the lowest implemented rate in the GCC. DMTT 15% for large MNEs from 2025. And from January 2028, Oman becomes the first GCC state to introduce broad personal income tax (5% flat) under Royal Decree 56/2025. A clear fiscal signal — and one that matters for your expat compensation planning.
Other notable items: DMTT 15% from 1 January 2025 for MNEs with global revenue ≥€750m (OECD Pillar Two). Oil & gas concessions taxed at 15–55% under separate agreements. WHT 10% on royalties, IP, software/SaaS, and other services to foreign suppliers without PE in Oman. OMR pegged to USD at OMR 0.385 since 1986 — one of the world’s highest-valued currencies. ~40 double taxation treaties. PASI social insurance: 12.5% employer / 8% employee for Omani nationals (foreign workers not in PASI). Wages Protection System mandates salary payment via Omani bank transfer in OMR.
Nine reasons businesses choose Oman.
Oman is the GCC’s most strategically distinctive option — outside the Strait of Hormuz, on the Indian Ocean, with the GCC’s most ambitious reform agenda and a 3% SME tax rate that competitors don’t match. Less flashy than the UAE; more open than Kuwait; quieter than Saudi.
Outside the Strait of Hormuz
Oman’s coastline is on the Arabian Sea and Indian Ocean — not in the Persian Gulf. Sohar Port, Salalah Port, and Port of Duqm bypass the Strait of Hormuz chokepoint entirely. A material logistics and geopolitical advantage versus other GCC ports for India, East Africa, and global shipping routes.
100% foreign ownership since 2020
The 2020 FDI Law abolished the Omani-partner requirement in most sectors. 100% foreign ownership is now the default for non-restricted activities. Materially simpler structuring than Kuwait (49% default) or UAE mainland historically. Some sectors still reserved (defence, real-estate trading in certain areas).
3% SME tax rate
For SMEs registered with the Public Authority for SME Development — subject to revenue, capital, and employment conditions — the corporate tax rate drops to 3%. Among the most competitive SME rates in the region. A genuine structuring opportunity for early-stage and scaling businesses that qualify.
5% VAT — lowest in the GCC
Oman implemented VAT at 5% in April 2021 (Royal Decree 121/2020), the same headline rate as the UAE and Bahrain but lower than Saudi Arabia (15%). Combined with no payroll tax and no personal income tax until 2028, the effective consumption-tax environment is highly competitive.
Vision 2040 diversification
Oman’s Vision 2040 strategy commits to non-oil revenue reaching 15% of GDP by 2030 and 18% by 2040. Priority sectors: logistics, manufacturing, ICT, tourism, fisheries, renewable energy, mining. Substantial government contracting opportunities and substantial Free Zone investment.
Free zones and SEZs
Salalah Free Zone (logistics, manufacturing), Sohar Free Zone (heavy industry, petrochemicals), Al Mazunah Free Zone (Yemen border trade), Knowledge Oasis Muscat (ICT and innovation), and Duqm Special Economic Zone (the most ambitious — refining, logistics, manufacturing). Royal Decree 38/2025 modernised SEZ governance.
OMR stability
Omani Rial pegged to USD at OMR 0.385 since 1986. One of the world’s highest-valued currencies and one of the most stable. Materially lower FX risk than ILS, EGP, LBP or TRY. Wages Protection System ensures all salaries paid via Omani bank transfer in OMR.
Skilled workforce, working English
Strong technical, engineering, medical and financial-services pipelines. English is widely used in business. Omanisation (Omani-employment quota) requirements apply by sector. Cost of skilled labour is generally lower than UAE for comparable calibre — particularly in Sohar, Salalah and Duqm.
India and East Africa gateway
Oman is historically India’s and East Africa’s strongest Arab partner — deep trade, financial, and labour-flow links. The CEPA-style India relationship and African Continental Free Trade Area (AfCFTA) connectivity make Oman an unusually effective base for Indian Ocean trade.
Six legal structures — one usually fits.
For most foreign investors, the LLC is the practical default. The SAOC (Closed Joint Stock) is used for larger investments. A Free Zone Company in Salalah, Sohar, or Duqm offers tax holidays for export-oriented or specialised activities.
Limited Liability Company
The standard structure for foreign investors. Minimum 2 partners; minimum capital varies by activity (typically OMR 20,000 fully paid). 100% foreign ownership permitted in most sectors since 2020 FDI Law. Audited annual accounts. The workhorse vehicle.
Free Zone Company
Operating in a designated Free Zone. CIT exemption up to 30 years (Duqm), 25 years (Salalah, Sohar). Zero customs duty on imports for re-export. 100% foreign ownership. No Omanisation requirement in some zones. Best for logistics, manufacturing, and export-oriented business.
Closed Joint Stock Company
Closed shareholding company. Minimum 3 shareholders. Minimum capital OMR 500,000. Used by larger investments, PE-backed structures, and businesses needing share-class flexibility. Subject to stricter governance and audit requirements than LLC.
Public Joint Stock Company
Public shareholding company. Listed on the Muscat Stock Exchange (MSX). Minimum capital OMR 2 million. Required for banks, insurers, and certain regulated entities. Heavier governance, disclosure, and audit obligations. Used by larger local groups and listed multinationals.
Branch
Operating branch of a foreign company. Can conduct commercial activities. Parent retains full liability. Generally limited to government-contract work (foreign companies with Omani government contracts). 15% CIT applies on Oman-source profits.
Representative Office
Liaison office of a foreign company — limited to marketing, research, and representation. Cannot generate revenue in Oman. Useful for market exploration before fuller commitment.
General Partnership
Two or more partners with unlimited joint and several liability. No minimum capital. Tax-transparent. Used in some Omani professional services contexts. Rarely the right choice for foreign investors.
Sole Proprietorship (Establishment)
Single owner, no separate legal personality, unlimited personal liability. Generally restricted to Omani nationals. Rarely the right structure for foreign investors.
Talk to us first
LLC for general trading and services. Free Zone for export, manufacturing, or logistics. SAOC for larger PE-backed investments. SME registration is the key qualifier for 3% tax. A 25-minute call clarifies it.
Book a call →From decision to live entity.
The end-to-end registration sequence for an Omani LLC — coordinated by Grant & Graham through senior Omani legal and accounting counsel.
Structure & location decision
Before incorporation: LLC mainland vs Free Zone (Sohar, Salalah, Duqm, Mazunah, KOM) vs SAOC. Mainland LLC for general trading and services serving the Omani market. Free Zone for export, manufacturing, or logistics with tax holidays. SME registration for the 3% CIT rate is a separate question worth scoping early.
Trade name reservation
Reserve the trade name via the Invest Easy portal at MOCIIP. Submit 2 to 3 alternatives in Arabic and English. Names must be unique and compliant with Omani naming regulations. Confirmation typically within 1 to 2 working days.
Invest Easy →Articles of Association & founder documentation
Draft the Articles of Association under the Commercial Companies Law (Royal Decree 18/2019). Define shareholders, share capital, business objects (specific MOCIIP activity codes), manager appointment, signatory authority. Apostilled good-standing certificate and constitutional documents required for foreign corporate shareholders.
Capital deposit at an Omani bank
Open a temporary capital account at an Omani bank (Bank Muscat, National Bank of Oman, Bank Dhofar, Oman Arab Bank, etc.) and deposit the minimum share capital (typically OMR 20,000 for LLC; OMR 500,000 for SAOC; OMR 2m for SAOG). Bank issues a capital deposit certificate, included in the MOCIIP filing pack.
MOCIIP registration & Commercial Registration (CR)
Submit the incorporation file via the Invest Easy portal. Commercial Registration (CR) certificate issued on approval. CR is the foundational identity document. Registration typically 1 to 2 weeks after a complete filing. Free Zone registrations run via the relevant Free Zone authority (Sohar, Salalah, Duqm, etc.) on broadly parallel timelines.
MOCIIP →Oman Chamber of Commerce (OCCI) membership
Membership of the Oman Chamber of Commerce and Industry is mandatory on CR issuance. The OCCI certificate is required for many subsequent licensing steps. Membership tier (excellent / first / second / third) determined by capital, activity, and employment level.
Oman Tax Authority & VAT registration
Register with the Oman Tax Authority to obtain the Tax Identification Number for CIT. VAT registration required if turnover exceeds OMR 38,500 (resident LLCs) or zero threshold (non-resident LLCs — appoint a Tax Representative). DMTT registration required for in-scope MNEs (global revenue ≥€750m).
PASI, Ministry of Labour & sector licences
Register with the Public Authority for Social Insurance (PASI) as an employer — mandatory before paying any Omani-national salaries. Contributions 12.5% employer / 8% employee on insurable salary (Omani nationals only). Ministry of Labour for work permits and visa allocation. Sector-specific licensing (CBO for finance, TRA for telecoms, Ministry of Health for pharma, MOTC for transport).
PASI →SME registration (if qualifying)
For the 3% reduced CIT rate, register with the Public Authority for SME Development (RIYADA). Subject to revenue, capital, and employment conditions. Independent of MOCIIP CR. RIYADA classification also unlocks separate SME procurement preferences, training subsidies, and financing access.
Ongoing compliance
Annual CIT return within 6 months of fiscal year-end (deadline 30 April for calendar-year companies). Quarterly VAT returns. PASI monthly contributions. IFRS-aligned financial statements; 10-year record retention. Annual audited accounts required for all LLCs and shareholding companies. Wages Protection System: all salaries paid via Omani bank transfer in OMR.
What it costs to incorporate & run.
All figures are indicative for a standard mainland LLC with one or two foreign shareholders. Oman sits in the mid-range of GCC setup costs — below Kuwait and UAE mainland, broadly comparable to Bahrain. Free Zone setup adds complexity but unlocks meaningful tax holidays.
One-time setup
Free Zone setup typically adds €3,000 to €6,500 but delivers CIT holidays up to 30 years (Duqm) and customs exemptions on re-exports. SAOC setup adds approximately €3,000–€5,500 to the LLC baseline plus the higher capital requirement.
Ongoing monthly / annual
Annual statutory audit is mandatory for all LLCs and shareholding companies. SME-registered businesses (3% CIT) face proportionately lower compliance load. DMTT-registered MNEs require transfer pricing documentation and GloBE-compliant returns at additional cost.
The legal framework to know.
A summary of the core legislation governing companies in Oman — substantive work is delivered through senior Omani counsel.
Corporate Law
- Commercial Companies Law Royal Decree 18/2019
- Civil Transactions Law Royal Decree 29/2013
- Foreign Capital Investment Law Royal Decree 50/2019
Tax Law
- Income Tax Law Royal Decree 28/2009
- VAT Law Royal Decree 121/2020
- Personal Income Tax Law Royal Decree 56/2025 (from 2028)
- DMTT regulations (Pillar Two, 2025)
Employment Law
- Labour Law Royal Decree 53/2023 (replaced 35/2003)
- Social Insurance Law (PASI)
- Omanisation requirements (sector-specific)
Data & Cyber
- Personal Data Protection Law Royal Decree 6/2022
- Electronic Transactions Law Royal Decree 69/2008
- Cybercrime Law Royal Decree 12/2011
Investment & Free Zones
- Foreign Capital Investment Law Royal Decree 50/2019
- Special Economic Zones Law Royal Decree 38/2025
- Sector-specific Free Zone laws (Sohar, Salalah, Duqm, Mazunah)
Intellectual Property
- Industrial Property Law Royal Decree 67/2008
- Copyright Law Royal Decree 65/2008
- WIPO and WTO/TRIPS framework
Oman, answered.
Four steps from enquiry to live entity.
Discovery call
30-minute conversation to understand your business, sector, mainland vs Free Zone, SME eligibility, ownership structure, and what you actually need from the Omani entity.
Recommendation
Senior advisory on the right structure (LLC, Free Zone, SAOC), Free Zone selection where applicable, SME registration scoping, sector licensing, banking partner. Fixed quote in EUR or OMR.
End-to-end formation
MOCIIP filing, OCCI membership, tax registration, PASI employer setup, RIYADA SME registration where applicable, banking introductions, sector licensing.
Ongoing support
Retained accounting, CIT/VAT/DMTT compliance, payroll, annual audit, statutory filings, Omanisation tracking, and structural changes as you scale.
Ready to incorporate in Oman?
Tell us in 25 minutes what you need. We’ll tell you honestly whether Oman is the right GCC base — mainland or Free Zone — and if it is, we’ll handle the setup end-to-end through senior local counsel.