Oman Company Guide: Forms, Corporate Tax, VAT and Foreign Ownership

What an Oman Company Is Used For

An Oman company is above all a vehicle for doing business inside the Sultanate: trading, contracting, services or manufacturing for Omani customers, or an operation in one of the zones at Duqm, Sohar, Salalah and Al Mazunah. The everyday form is the limited liability company (LLC) and its single-owner variant, the SPC. Under the Foreign Capital Investment Law of 2019 a foreign investor needs no Omani partner in a permitted activity; the activities reserved for Omanis are closed to foreign capital altogether, and investors from the United States and the GCC follow the same rules as Omani nationals. Whoever owns it, a company formed under Omani law has Omani nationality and must keep its principal place of business in the country.

Types of Companies in Oman

All are entered in the Commercial Registry of the Ministry of Commerce, Industry and Investment Promotion; the procedure is set out on our page on company registration in Oman.

Corporate Tax in Oman, VAT and Withholding at a Glance

The Oman corporate tax rate of 15% is well above the UAE’s 9%, which applies only above a threshold of 375,000 dirhams (see our UAE company guide), though the small enterprise rate and the zone exemptions narrow the gap for businesses that qualify. A company engaged in economic activity registers with the Tax Authority within 60 days of starting it or of its commercial registration, and files a return each year.

Who May Own and Run an Oman Company

Foreign ownership is open up to 100%, with a licence from the Investment Services Centre, except in the activities the Minister of Commerce reserves for Omanis. That list, first issued as Ministerial Decision 209/2020, ran to 123 entries after Decision 435/2024, mostly small local trades from tailoring and car repair to grocery stores and real estate brokerage. In a permitted activity no Omani shareholder, sponsor or resident manager is required; managers must be natural persons and may be foreign nationals. Two obligations do bind every foreign-owned company: after a year of activity it employs at least one Omani (Ministerial Decision 411/2025), and if it never starts trading its investment licence is cancelled after two years.

Each company keeps its own register of beneficial owners, the natural persons who hold 25% or more or ultimately control it, at its head office under Ministerial Decision 424/2023. It is kept by the company rather than a public registry: the Ministry and the competent authorities can call for it, and the company names a natural person resident in Oman to answer them. Using an Omani to hold shares for a foreign owner is concealed trade under Ministerial Decision 412/2023, punished by fines and by removal of the activity from the CR.

The Yearly Cycle of an Oman Company

• Accounts: prepared within 90 days of the financial year end and approved at the annual shareholders’ meeting, which must take place within 180 days.
• Audit: needed once an LLC has more than seven shareholders or capital above 50,000 Omani rials, or when the contract or holders of a fifth of the capital ask for it.
• Tax: an income tax return every year and, for a company registered for VAT, periodic VAT returns.
• Registry and Chamber: the commercial registration is renewed on the Oman Business Platform, and the compulsory Chamber of Commerce membership is kept current.
• Registers: any change of shareholder or beneficial owner is written into the company’s registers within five working days.

Banking an Oman Company

A bank licensed in Oman is involved from the formation stage: an LLC’s cash capital goes into an account opened for the company under formation and is released once registration is proved. Afterwards it should trade through accounts in its own name, since the concealed trade rules presume concealment where another account is used. Banks accept the digitally signed CR certificate printed from the Oman Business Platform; whether a particular bank opens an account is its own decision.

Forming New or Buying Ready-Made in Oman

Form a new company when the activities, the shareholding and the choice between an LLC and an SPC should be yours from the start. A resident investor can do it online, and a foreign investor adds the investment licence: see company registration in Oman.

Buy a ready-made company when an earlier registration date, a CR with activities already licensed, Chamber membership and a tax file with a filing record are worth more to you than a blank start. The shares pass by an attested contract, other shareholders have a right to buy first, and a foreign buyer still needs the investment licence, as explained on ready-made shelf companies in Oman. What age does and does not add to a company is discussed in our guide to aged shelf companies.

What We Do for Oman Companies

We supply existing Omani companies and register new ones, draft the Arabic constitutive contract or the share transfer, prepare what the Registrar and the Investment Services Centre need, and help put a bank application together. When we know a suitable bank through a working contact we can arrange an introduction, and the decision stays with the bank.

Frequently Asked Questions about Doing Business in Oman

What is the corporate tax rate in Oman?

The general rate is 15% of net taxable income, under Article 112 of the Income Tax Law as amended in 2017. Small enterprises meeting the statutory conditions on capital, income, staff and activity pay 3%, and oil and gas exploration companies 55%. Since 1 January 2025 entities of multinational groups with revenue of 750 million euros or more are topped up to an effective 15% under Royal Decree 70/2024.

What is the VAT rate in Oman and when must a company register?

Oman VAT is charged at 5% and has applied since 16 April 2021 under Royal Decree 121/2020. A company must register once its taxable supplies reach, or are expected to reach, 38,500 Omani rials a year, and may register voluntarily from 19,250 to recover the VAT it pays on purchases. Exports and international transport are zero-rated, and financial services and residential rent are exempt.

Are profits taxed less in an Oman free zone?

Yes, for qualifying projects. Royal Decree 38/2025 exempts projects in the special economic zones and free zones from income tax for 10 years from the start of activity, extendable twice for activities of a special nature. Banks, insurers, telecoms, contractors and land and sea transport are excluded, returns are still filed, and companies licensed before 2025 keep the incentives they were granted until those expire.

Are dividends paid to a foreign shareholder taxed in Oman?

Not by withholding. PwC reports that Oman’s 10% withholding tax on dividends to non-residents applied only to joint stock companies and was suspended by a royal directive of 11 January 2023, so an LLC pays dividends abroad without deduction. The profits have already borne corporate tax, and the dividend’s treatment then depends on the shareholder’s home country and any tax treaty with Oman.

Does a foreign-owned company in Oman have to employ Omanis?

Yes. Ministerial Decision 411/2025 requires every establishment or company set up by a foreign investor to hire at least one Omani worker after one year of commercial activity, register that worker with the Social Protection Fund and respect the Omanisation ratios that apply to it. Companies trading for a year or more when it took effect have six months from their next CR renewal or work permit issue or renewal, whichever comes first.