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Prohibited Business Activities under Foreign Investment

The Oman Ministry of Commerce, Industry and Investment Promotion (MOCIIP) Ministerial Decision No. 209/2020 (2020 MD) list of activities prohibited to foreign investors has been updated by Ministerial Decision No. 364/2023 (New MD). The New MD amends the 2020 MD by removing two activities from the list of prohibited activities specialised rehabilitation centres and rehabilitation centres and expanding the list of prohibited activities.

We set out below a consolidated list of the prohibited activities. Most of these commercial activities are unlikely to be of interest to foreign investors, but there are a few surprises for foreign investors to be alert to: 

  1. Manufacture of Omani halwa (Omani dessert)
  2. Tailoring of Arab men wearing apparel
  3. Tailoring of non-Arab men wearing apparel
  4. Tailoring of Arab and non-Arab ladies wearing apparel
  5. Tailoring of sports clothing
  6. Tailoring of military uniform
  7. Manufacture of Omani kimma (Omani cap)
  8. Manufacture of women's abaya (gown)
  9. Manufacture of Omani khanjar (traditional dagger)
  10. Transport and sale of drinking water
  11. Motor vehicle electrical repair and recharging of batteries
  12. Repairing and cleaning motor vehicle radiators
  13. Repairing punctured tyres and metal wheels
  14. Wheel balance
  15. Motor vehicle service stations
  16. Replacement of motor vehicle oils
  17. Repairing car air-conditioner
  18. Repairing motor vehicle exhaust pipe
  19. Car cleaning and polishing
  20. Wholesale of fruits and vegetables
  21. Wholesale of cooking gas
  22. Liquefied petrol gas filling stations
  23. Retail sale of fresh fruit, vegetables and dates in specialised stores
  24. Retail sale of honey in specialised stores
  25. Motor vehicle fuel stations
  26. Diesel fuel stations
  27. Retail sale of telephones and their accessories in specialised stores
  28. Retail sale of mobile telephones and their accessories in specialised stores
  29. Retail sale of souvenirs, paintings and gifts in specialised stores
  30. Retail sale of flowers and natural plants in specialised stores
  31. Retail sale of pottery and handicrafts in specialised stores
  32. Retail sale of cooking gas in specialised stores
  33. Retail sale of silverware and gifts in specialised stores
  34. Retail sale in specialised stores of cards of telecommunications services licensed in the Sultanate
  35. Retail sale of traditional weapons in specialised stores
  36. Retail sale of animal feed in specialised stores
  37. Retail sale of bags in specialised stores
  38. Retail sale of ceremony requirements in specialised stores
  39. Retail sale of fireworks in specialised stores
  40. Retail sale of Omani khanjar (traditional dagger) in specialised stores
  41. Retail sale of empty gas cylinders in specialised stores
  42. Retail sale of wedding cards in specialised stores
  43. Retail sale of handicraft products in specialised stores
  44. Retail sale of beekeeping supplies in specialised stores
  45. Pilgrim and umra performers’ transport
  46. Road transport by trucks of cooking gas cylinders
  47. Loading and unloading of goods
  48. Customs clearance offices
  49. Valuation of cancelled vehicles
  50. Insurance commission agent
  51. Real estate brokerage (auctioneer offices)
  52. Manpower recruitment offices
  53. Employment offices
  54. General cleaning of buildings
  55. Photocopying and typing services
  56. Transactions clearance offices
  57. Making and installation of neon signboards
  58. Managing and operating fuel stations
  59. Driving schools
  60. Elderly people care centres
  61. Orphanages
  62. Other library and archives activities
  63. Washing all kinds of clothes and textiles, except what is carried out in tourist establishments
  64. Ironing of clothes, except what is carried out in tourist establishments
  65. Laundry and steam ironing (dry cleaning), except what is carried out in tourist establishments
  66. Hair cutting, styling and shaving for men, except what is carried out in tourist establishments
  67. Hairdressing and cosmetic treatment for women, except what is carried out in tourist establishments
  68. Hair cutting and styling for children, except what is carried out in tourist establishments
  69. Operation of poultry hatcheries
  70. Beekeeping and production of honey and beeswax
  71. Marine fishing
  72. Slaughtering and preparing poultry, rabbits and birds
  73. Printing using photocopier machines, computer printers, embossers etc.
  74. Transport estate owners associations
  75. Pets care service and sale of non-potable water
  76. Renting of cranes with operator
  77. Renting of construction machinery and other equipment operated by a worker
  78. Renting of construction or demolition equipment operated by a worker
  79. Wholesale of livestock
  80. Wholesale of fish and sea creatures
  81. Wholesale of fish products
  82. Retail sale in specialised stores of meat and meat products
  83. Retail sale in specialised stores of fish and other seafoods
  84. Retail sale in specialised stores of Omani halwa (Omani dessert)
  85. Retail sale in specialised stores of poultry (slaughtered)
  86. Retail sale in specialised stores of natural herbs
  87. Retail sale in specialised stores of medical herbs
  88. Retail sale in specialised stores of birds, pets and ornamental fish and their accessories
  89. Vehicle towing and recovery service
  90. Buying, selling and dividing land
  91. Renting and operating of self-owned or leased real estate (residential and non-residential)
  92. Operating of buildings (self-owned or leased)
  93. Appraisal services for real estate
  94. Building management (based on a fee or contract)
  95. Management of real estate.

Prohibited Business Activities

We set out below a consolidated list of the prohibited activities. Most of these commercial activities are unlikely to be of interest to foreign investors, but there are a few surprises for foreign investors to be alert to:

  1. Manufacture of Omani halwa (Omani dessert)

  2. Tailoring of Arab men wearing apparel

  3. Tailoring of non-Arab men wearing apparel

  4. Tailoring of Arab and non-Arab ladies wearing apparel

  5. Tailoring of sports clothing

  6. Tailoring of military uniform

  7. Manufacture of Omani kimma (Omani cap)

  8. Manufacture of women's abaya (gown)

  9. Manufacture of Omani khanjar (traditional dagger)

  10. Transport and sale of drinking water

  11. Motor vehicle electrical repair and recharging of batteries

  12. Repairing and cleaning motor vehicle radiators

  13. Repairing punctured tyres and metal wheels

  14. Wheel balance

  15. Motor vehicle service stations

  16. Replacement of motor vehicle oils

  17. Repairing car air-conditioner

  18. Repairing motor vehicle exhaust pipe

  19. Car cleaning and polishing

  20. Wholesale of fruits and vegetables

  21. Wholesale of cooking gas

  22. Liquefied petrol gas filling stations

  23. Retail sale of fresh fruit, vegetables and dates in specialised stores

  24. Retail sale of honey in specialised stores

  25. Motor vehicle fuel stations

  26. Diesel fuel stations

  27. Retail sale of telephones and their accessories in specialised stores

  28. Retail sale of mobile telephones and their accessories in specialised stores

  29. Retail sale of souvenirs, paintings and gifts in specialised stores

  30. Retail sale of flowers and natural plants in specialised stores

  31. Retail sale of pottery and handicrafts in specialised stores

  32. Retail sale of cooking gas in specialised stores

  33. Retail sale of silverware and gifts in specialised stores

  34. Retail sale in specialised stores of cards of telecommunications services licensed in the Sultanate

  35. Retail sale of traditional weapons in specialised stores

  36. Retail sale of animal feed in specialised stores

  37. Retail sale of bags in specialised stores

  38. Retail sale of ceremony requirements in specialised stores

  39. Retail sale of fireworks in specialised stores

  40. Retail sale of Omani khanjar (traditional dagger) in specialised stores

  41. Retail sale of empty gas cylinders in specialised stores

  42. Retail sale of wedding cards in specialised stores

  43. Retail sale of handicraft products in specialised stores

  44. Retail sale of beekeeping supplies in specialised stores

  45. Pilgrim and Umra performers’ transport

  46. Road transport by trucks of cooking gas cylinders

  47. Loading and unloading of goods

  48. Customs clearance offices

  49. Valuation of cancelled vehicles

  50. Insurance commission agent

  51. Real estate brokerage (auctioneer offices)

  52. Manpower recruitment offices

  53. Employment offices

  54. General cleaning of buildings

  55. Photocopying and typing services

  56. Transactions clearance offices

  57. Making and installation of neon signboards

  58. Managing and operating fuel stations

  59. Driving schools

  60. Elderly people care centres

  61. Orphanages

  62. Other library and archives activities

  63. Washing all kinds of clothes and textiles, except what is carried out in tourist establishments

  64. Ironing of clothes, except what is carried out in tourist establishments

  65. Laundry and steam ironing (dry cleaning), except what is carried out in tourist establishments

  66. Hair cutting, styling and shaving for men, except what is carried out in tourist establishments

  67. Hairdressing and cosmetic treatment for women, except what is carried out in tourist establishments

  68. Hair cutting and styling for children, except what is carried out in tourist establishments

  69. Operation of poultry hatcheries

  70. Beekeeping and production of honey and beeswax

  71. Marine fishing

  72. Slaughtering and preparing poultry, rabbits and birds

  73. Printing using photocopier machines, computer printers, embossers etc.

  74. Transport and sale of non-potable water

  75. Renting of cranes with operator

  76. Renting of construction machinery and other equipment operated by a worker

  77. Renting of construction or demolition equipment operated by a worker

  78. Wholesale of livestock

  79. Wholesale of fish and sea creatures

  80. Wholesale of fish products

  81. Retail sale in specialised stores of meat and meat products

  82. Retail sale in specialised stores of fish and other seafoods

  83. Retail sale in specialised stores of Omani halwa (Omani dessert)

  84. Retail sale in specialised stores of poultry (slaughtered)

  85. Retail sale in specialised stores of natural herbs

  86. Retail sale in specialised stores of medical herbs

  87. Retail sale in specialised stores of birds, pets and ornamental fish and their accessories

  88. Vehicle towing and recovery service

  89. Buying, selling and dividing land

  90. Renting and operating of self-owned or leased real estate (residential and non-residential)

  91. Operating of buildings (self-owned or leased)

  92. Appraisal services for real estate

  93. Building management (based on a fee or contract)

  94. Management of real estate owners associations

  95. Pets care service

BRANCH OFFICE

A common strategy for foreign companies to achieve complete foreign ownership is by creating a Branch Office of their parent company. Legally considered a direct extension of the parent company, a Branch Office lacks a separate legal identity. Consequently, the Branch Office carries the same name as its parent company.

Setting Up and Structuring a Foreign Branch in Oman:

To establish a branch of a foreign company, it is crucial that the foreign company holds a contract with a government entity or a government wholly-owned company. Alongside the registration documents, the foreign company must submit an undertaking, declaring its commitment to bear the liabilities of the branch and the actions of the branch manager. The duration of the Branch Office is limited to the necessary project execution period in Oman. It is prohibited from undertaking any work for third parties unrelated to the project. The branch's activities must align with those of its parent company, and engaging in other activities requires prior approval from the parent company and registration with the Ministry of Commerce and Industry.

We don't offer this service!

Foreign Company Representative Office

A representative office of a foreign company is distinct from a Branch Office in that it is solely authorized to promote the activities of its parent company. If the parent company is involved in the sale and/or production of specific products and establishes a representative office in Oman, the office is restricted to promoting and marketing those products, and facilitating contracts in Oman, but cannot engage in direct sales or production. It's essential to be aware that, in addition to these limitations, representative offices face restrictions, such as being ineligible to secure credit facilities or submit offers.

Currently, we don't provide this service!

Limited Liability Company (LLC)

Limited Liability Company (LLC) stands out as the preferred choice for foreign business formation in Oman. Until January 2020, foreign investors were restricted to owning 70%, with an Omani partner holding the remaining 30%. However, the enactment of the Foreign Capital Investment Law (FCIL) through Royal Decree No: 50/2019 in January 2020 granted foreign investors 100% ownership in many mainland Oman industries.

Benefits of Setting Up an LLC in Oman:

  • 100% foreign ownership permitted for the majority of business activities
  • Only one shareholder and one director required
  • No restrictions on shareholder or director nationality
  • Commercial registration valid for 5 years
  • Quick formation process
  • Foreign companies can register according to FCIL and invest in sectors aligning with economic diversification

Requirements for Oman LLC Setup:

  1. Reserve Company Name
  2. Ministry of Commerce and Industry Application
  3. Oman Chamber of Commerce and Industry Registration
  4. Define the LLC's business activities
  5. Lease office space
  6. Register with the Ministry of Finance
  7. Post-incorporation – municipality license, tax registration, Royal Oman police registration, Ministry of Manpower registration

Documents Required:

  • Passport copies of shareholders and authorized signatories
  • Approved form detailing names and signatures of authorized signatories
  • Company registration forms
  • Proof of initial capital through a bank statement

How We Can Help: We can assist in setting up a 100% foreign-owned Limited Liability Company (LLC) in Oman. We also provide support in restructuring existing companies for 100% foreign ownership. Our expert consultants in Muscat have strong government relations to streamline the company formation process. 

Sole Proprietorship Company

A Sole Proprietorship Company is a straightforward business structure where an individual trades under their own name, holding a personal liability for business obligations without a separate legal entity. This form is commonly called an 'establishment,' and its owner assumes full liability for the business.

Setting Up and Structure of a Sole Proprietorship Company in Oman:

To establish a Sole Proprietorship Company, one applies the necessary documents to the Ministry of Commerce and Industry, represented by the Chamber of Commerce and the Municipality. The Ministry of Commerce and Industry issues the primary trade license.

Key Features:

  • Single-person ownership
  • No restrictions on initiation or closure
  • The owner maintains complete control
  • Lower formation and compliance costs
  • Unlimited liability borne by the owner
  • Profits and losses are borne by the owner
  • No special legislation

Government Liaison Officer (GLO) Requirement: Each Sole Proprietorship Company needs a local Omani to serve as the company’s Government Liaison Officer (GLO). The GLO has No Equity or liability for the business, and they cannot represent the Branch Office or partake in its management.

Advantages of Company Certification LLC approved GLO service provider:

  • Utilize our experience for efficient paperwork processing, including visas, licenses, labor quotas, translation services, and assistance with corporate bank account openings.
  • We have a fixed fee structure.
  • Full management team available 24/7.
  • Suitable for entrepreneurs, SMEs, and MNCs entering the Oman market.
  • Honest answers, transparency, reliability, and realistic timeframes keep you fully informed at all times.

Oman Company Types

Companies in Oman can adopt different legal forms, including Sole Proprietorship Company, Limited Liability Company (LLC), Branch Offices, Representative Office, Free Zones, and Commercial Agent (Exclusive Distributor). An LLC is the prevalent choice for foreign investors, often the only option for various business activities. As of January 2020, many company types can be fully owned by foreign investors due to a legislative update.

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