Complete Foreign Ownership Is Now A Possibility In Omani Businesses
100 percent or complete foreign ownership is now possible in majority of Omani companies as per the new Foreign Capital Investment Law that came into effect in the Sultanate starting January 7, 2020. However, there was an exception of a small number of trades and services, in which this won’t be applicable.
There are 37 types of commercial activities that are prohibited for complete or 100 percent foreign ownership including translation and photocopying services, laundry, tailoring, vehicle and automotive repairs, sale of drinking water, transportation, manpower and recruitment services, taxi operation, hairdressing and salon services, fishing, rehabilitation homes meant for the elderly, or disabled, and orphans.
Leaving aside this blacklist, signifying an important but relatively smaller fraction of the Omani economy, the new law broadcasted by Royal Decree 50/2019 (FCIL) opens the doors for assuring new sectors for doing business in Oman or going for 100 percent foreign investment, as per a Muscat-based legal expert.
The Ministry of Commerce and Industry (MoCI) has taken some major steps in the new FCIL to enable a regulatory regime in Oman that is investment-friendly. They also plan to now permit 100 percent foreign ownership in most of the companies set up in Oman other than those conducting any activity out of the above-mentioned blacklist. This blacklist, which has 37 activities listed, currently does not include sectors which were earlier strict in their Omani ownership requirements like oil and gas, defence, and restaurants.
Emphasizing the significance of the new statute to Oman’s determination to foster foreign investment inflows, the FCIL is likely to place the Omani market in a more robust position to offer the foreign investors with a more welcoming, open, and vigorous regulatory framework in which they can conduct business.
If planning for foreign company registration in Oman, it is important to note that the FCIL does not specify a minimum share capital requirement. The MoCI has also relaxed its earlier practice of necessitating any company which has one or more foreign shareholders to begin with a minimum starting share capital of RO 150,000 (almost $390,000). Please note that the fee for registering such type of a company at the Ministry is higher than earlier and starts from RO 3,000 (almost equivalent to $7,800) and is subject to further increase depending on the anticipated share capital of the new company.
Any further clarity in terms of the specific provisions of this new law is likely to be available when the Executive Regulations would be issued later this year.