Omani law provides for a number of business forms for investors. However, several limitations are placed on foreign investment/participation in Omani companies. The main restrictions include:

• Foreign investors wishing to establish in Oman, must first obtain a license to do so from the Ministry of Industry and Commerce
• In most cases, a minimum capital investment of at OMR 150,000 is required
• Foreign participation in the capital of an Omani company is typically limited to 70%, although in certain cases, and subject to approval, 100% ownership is allowed

100% foreign ownership is generally approved if the capital investment is at least OMR 500,000 and the company/project must be deemed to contributes to the economic development of Oman. 100% foreign ownership is also allowed if the foreign company has a contract with the Omani government.

The main business forms in Oman include:

Joint Stock Company

Joint stock companies (JSC) can be formed as a closely-held JSC (SAOC) or a general JSC (SAOG).

Key aspects of a closely-held JSC include:

• Requires a minimum of 3 promoters/shareholders
• Shareholders can be natural persons or legal entities
• Shareholder liability is limited to the value of their shares subscribed
• Share cannot be offered publicly or traded in the Muscat Securities Market
• Minimum capital requirements is OMR 500,000

Key aspects of a general JSC include:

• Requires a minimum of 3 promoters/shareholders
• Shareholders can be natural persons or legal entities
• A single promoter may not hold more than 20% of the capital of the company
• The promoters of the company must hold at least 30% of the shares and at most 60%, the remainder must be offered publicly
• Shareholder liability is limited to the value of their shares subscribed
• Shares can be offered publicly and traded in the Muscat Securities Market
• Minimum capital requirements is OMR 2 million

Both closely-held and general JSCs are required to set aside 10% of net profits after tax as a legal reserve fund until such fund is equal to at least 1/3 of the company's share capital. Dividends can be paid only after at least 10% is set aside or when the 1/3 of capital requirement is met. Dividends cannot be paid out of the reserve fund.

Limited Liability Company

A limited liability company can be formed in Oman by natural persons or legal entities. Foreign participation is allowed but will affect minimum capital requirements.

Key aspects of an LLC include:

• Can be formed by a minimum of 2 shareholders and up to a maximum of 40, natural persons or legal entities
• Minimum capital requirement is OMR 20,000 if no foreign participation, and OMR 150,000 with foreign participation
• The liability of shareholders is limited to their contribution to the company
• 10% of an LLC's net profits after tax must be set aside as a legal reserve fund until such find is equal to at least 1/3 of the company's share capital
• Dividends cannot be paid until after the 10% is set aside (or until 1/3 requirement is met), and cannot be paid out of the reserve fund.

Holding Company

Holding companies can be formed in Oman as joint stock companies or limited liability companies.

Key aspects of a holding company include:

• May exercise financial and management control over 1 or more companies
• In order to exercise such control, the held company must be at least 51% owned by the holding company
• Minimum capital requirement is OMR 2 million
• Holding companies may not hold shares in partnerships or other holding companies

Branch and Representative Offices

Oman allows foreign companies to establish both branch and representative offices. A branch office is allowed to conducted business activities in Oman, while a representative office may not.

Key aspects of a branch office include:

• Able to conduct business activities in Oman, including entering into contracts
• Do not require Omani participation, but can appoint an Omani agent or sponsor
• Are considered a permanent establishment of the foreign parent company
• Are allowed to be members of the Oman Chamber of Commerce & Industry

Key aspects of a representative office include:

• May only perform promotional or liaison activities on behalf of the foreign company
• May not engage in any business activities

Partnerships

Oman allows for the formation of both general and limited partnership.

Key aspects of a general partnership include:

• Formed by 2 or more partners, all of which have unlimited liability
• Partners can be natural persons or legal entities
• Each partners share of profits and losses is in proportion to their contribution, unless otherwise stipulated in an agreement

Key aspects of a limited partnership include:

• Formed by at least 1 general partner with unlimited liability and 1 limited partner, whose liability is limited to their contribution to the partnership
• If a limited partner allows their name to be included in the partnership name, they will be subject to liability to the same extent as a general partner if a third party believes them to be a general partner

Joint Venture Company

Joint venture companies are formed by contract between 2 or more partners who share in the profit and loss of the venture.

Key aspects of a joint venture company include:

• Formed by contract, which defines the scope of work, rights, responsibilities and obligations of the venture partner towards each other and third parties
• Can be formed by natural persons or legal entities
• Has no separate legal personality of its own
• Cannot have a name of its own and its existence cannot be raised as a defense against third party claims

Commercial Agent

If a foreign company wishes to provide goods and services in Oman without establishing a permanent presence, they can appoint a commercial agent.

Key aspects of commercial agents include:

• Agents must be either Omani nationals, or a business with at least 51% Omani participation
• Agencies must be registered with the Ministry of Commerce and Industry

Sole Proprietorship

A Sole Proprietorship may be formed in Oman by Omani nationals, or nationals of the Gulf Cooperation Council member states, and are limited in the business activities they can conduct. Sole proprietors have unlimited liability for their business.