Oman has made significant strides in improving its business environment. The introduction of 100% foreign ownership in most sectors, streamlined company registration, and the development of world-class free zones have made the Sultanate an increasingly attractive destination for international businesses. This guide covers everything you need to know about setting up a business in Oman in 2026.
100% Foreign Ownership — A Recent Milestone
Oman’s Foreign Capital Investment Law, updated in recent years, now allows 100% foreign ownership in most economic activities. This removed the historic requirement for a 30% Omani partner in most business sectors — a significant reform that has made Oman more competitive for foreign direct investment. Exceptions include certain strategic sectors and activities reserved for Omani nationals.
Business Structures in Oman
- Limited Liability Company (LLC): Most common structure; minimum capital requirements vary by activity; 2 shareholders minimum
- Sole Proprietorship: Available to Omani nationals and GCC nationals; individual ownership
- Joint Stock Company (SAOG/SAOC): Larger corporate structures; SAOG (public JSC) can list on Muscat Stock Exchange
- Branch Office: A foreign company’s branch; parent company fully liable; requires Ministry of Commerce approval
- Representative Office: Market presence only; no local revenue generation
Registration Process
- Reserve company name and check activity eligibility with the Ministry of Commerce, Industry and Investment Promotion (MoCIIP)
- Submit incorporation documents through the Invest Easy online portal (investeasy.gov.om)
- Obtain Commercial Registration Certificate
- Register for VAT with the Tax Authority of Oman (TAO)
- Obtain municipality licence and sector-specific licences as applicable
- Register employees with PASI (Public Authority for Social Insurance) and DMANPOWER for Omanisation compliance tracking
Free Zones — Sohar and Salalah
- Sohar Freezone: Industrial zone adjacent to Sohar Port; advantages include duty-free imports, 10-year tax exemption, 100% foreign ownership, and direct port access. Strong in petrochemicals, steel, aluminium downstream, and logistics
- Salalah Free Zone: Strategic for Indian Ocean trade routes; adjacent to Port of Salalah (major container transhipment hub); 30-year tax exemption; suited for logistics, distribution, and light manufacturing
- Duqm SEZ: Largest zone; see separate detailed guide; ideal for heavy industry, maritime, and energy sector investments
Corporate Tax in Oman — 2026
- Standard rate: 15% on taxable income for most companies
- Small business rate: 3% for companies with annual revenue below OMR 100,000 meeting specific criteria
- Free zone companies: Exempt for the period specified in their free zone agreement (10–30 years depending on zone)
- Withholding tax: 10% on dividends, interest, royalties, and management fees paid to non-resident entities
- VAT: 5% standard rate (introduced April 2021)
Omanisation Compliance for Businesses
All private sector businesses must meet sector-specific Omanisation quotas as a condition of their commercial registration. Non-compliant companies face restrictions on hiring expatriate workers and potential fines. The Ministry of Labour’s website publishes the applicable quota for each business activity category.
Frequently Asked Questions
How long does company registration take in Oman?
Through the Invest Easy online portal, standard commercial registration can be completed in 5–10 business days for most activities. Sector-specific licences (financial services, healthcare, education) require additional approvals and take longer.
Can a foreign company trade in Oman without a local entity?
Generally no — most commercial activities in Oman require a locally registered entity. Exceptions include approved project-specific contracts where a foreign company may work directly under a government or private sector contract.
Related Reading
Also Read: Oman Real Estate 2026: Al Mouj Muscat, Foreign Ownership Rules and Property Market Guide | Oman Cost of Living 2026: Muscat vs Salalah Expenses Breakdown for Expats | Duqm Special Economic Zone 2026: Why Oman’s Desert City Is Attracting Global Investment
