Setting Up a Company in Oman
Oman's Foreign Capital Investment Law permits 100% foreign ownership for most activities — here is how the structures, free zones and registration process work in 2026.
Oman's Vision 2040 diversification agenda has made it increasingly accessible to foreign capital. The Foreign Capital Investment Law (Royal Decree 50/2019) removed the mandatory 30% Omani partner requirement for most activities, and Oman's three major free zones — Salalah, Sohar and Al Mazunah — provide 100% foreign ownership with full profit repatriation and customs benefits.
Main corporate structures
| Structure | Foreign ownership | Min. capital | Typical use |
|---|---|---|---|
| LLC (Limited Liability Company) | Up to 100% under FCIL for approved activities | OMR 150,000 for most foreign-owned LLCs (≈ USD 390,000) | Trading, services, contracting |
| SAOC (Closed Joint Stock) | 100% possible | OMR 500,000 | Larger enterprises, banking |
| Branch | 100% (parent) | None set | Government project execution |
| Free Zone Entity | 100% | Zone-specific (generally lower) | Export-oriented, logistics, manufacturing |
Key tax facts for 2026
| Parameter | Rate |
|---|---|
| Corporate income tax | 15% (standard rate) |
| SME reduced rate | 3% for entities with revenue below OMR 100,000 |
| VAT | 5% (introduced April 2021) |
| Withholding tax | 10% on dividends, interest, royalties paid to non-residents |
| Free zone tax holiday | 5–30 years depending on zone and activity |
Oman's free zones
Salalah Free Zone — located adjacent to the Port of Salalah, one of the region's major transshipment hubs. Strong for logistics, petrochemicals and light manufacturing. Sohar Free Zone — co-located with Sohar Port on the Gulf of Oman, focused on industrial, metals and food-processing clusters. Al Mazunah Free Zone — on the Yemen border, smaller and oriented toward regional trade. All three offer 100% foreign ownership, full profit repatriation, and exemptions from import duties on raw materials and equipment.
Omanisation
Oman operates a mandatory nationalisation quota (Omanisation) requiring a minimum percentage of Omani nationals in a company's workforce. Quotas vary by sector — typically 35% for most commercial activities, rising to 60%+ for engineering and contracting. Non-compliance results in the withholding of the company's commercial card renewal. Omanisation rates should be confirmed with the Ministry of Labour before committing to a staffing model.
The incorporation process
- Confirm whether the activity falls under the FCIL's approved list for 100% foreign ownership or requires a local partner.
- Register through the Invest Easy portal (investeasy.gov.om): reserve name, select structure, upload documents.
- Obtain initial approval from InvestOman for foreign-ownership projects.
- Notarise the Articles of Association and deposit minimum capital in an Omani bank.
- Obtain a Commercial Registration from the Ministry of Commerce and a tax card from the Tax Authority.
- Register for VAT if taxable supplies exceed OMR 38,500 per year.
- Obtain a municipal licence and apply for employee visas through the Royal Oman Police.
Frequently asked questions
Can a foreigner own 100% of an Oman company?
Yes, for activities on the approved list under the Foreign Capital Investment Law (Royal Decree 50/2019). The minimum capital for a foreign-owned LLC is OMR 150,000. Free zone entities are always 100% foreign-ownable with lower or no capital minimums.
What is the corporate tax rate in Oman?
15% for most entities. SMEs with revenue below OMR 100,000 pay 3%. Free zone entities benefit from tax holidays of 5–30 years.
Is there VAT in Oman?
Yes — 5% VAT introduced in April 2021. Mandatory registration applies above OMR 38,500 in annual taxable supplies.
What are Oman's main free zones?
Salalah Free Zone (logistics, petrochemicals), Sohar Free Zone (industrial, metals, food) and Al Mazunah (regional trade). All offer 100% foreign ownership and customs benefits.
Official sources
- InvestOman — Foreign Investment Authority
- Invest Easy — Business Registration Portal
- Tax Authority of Oman
- Foreign Capital Investment Law — Royal Decree 50/2019
This guide is general information prepared by ARM Management and is current as at July 2026. It is not legal advice; ownership requirements, Omanisation quotas and tax rates change over time. Confirm with the relevant authority or an advisor before incorporating.
Set up your Oman entity under the right structure from day one.
ARM Management advises foreign investors on Oman LLC formation, free zone selection, Omanisation compliance and ongoing tax obligations — from scoping through to operational launch.