Company Formation In Oman

General Partnership is a form of business where two or more person comes under a contract to form a business. Business partners are jointly or severally liable for the conduct of business obligations to the full extent of member’s personal wealth. A general partnership can be formed between several people and this partnership is required to be registered under Commercial Register. While registering all the agreements between the partners are required to be mentioned.

Company name of a General Partnership Company should contain the name of one or more partners.
All the members are required to perform their part of work as specified in the agreement.
General Partnership Companies comes to an end when a new member is added or any member leaves the partnership.
General Partnership Company can also expire when the partnership term gets over.

In this type of partnership, two types of members are involved; General Partners involved in managerial practices of the business and Limited Partners who contribute in the capital of the company but not in the management related practices.

Minimum number of partners involved in this is two
LLPs have no limitation on a maximum number of partners.
Limited Partnership should be registered under the Commercial Register.
In a Limited Liability Partnership, General Partners are liable to their full extent of personal property but Limited Partners are
supposed to bear the liability to the amount of capital contributed by them.

A Holding Company is a Limited Liability Company or a Joint–Stock Company. A Holding Company possesses control over financial and administrative decisions of one or more subsidiary companies. Holding company should have at least 51% of shares of its subsidiary companies. It is required to mention the company’s name as a “Holding Company” in all the all legal and formal documents. In Oman, it is essential that Holding Company should have more than Two million Omani Riyals towards Capital. A Holding Company in Oman can exercise the following powers:

It may manage its subsidiary company and even participate in managerial decisions.
It may make investments in share, securities, debentures and bonds.
It may grant credit and provide the fund to the subsidiary company.
It may own the rights, patents, trademarks of the subsidiary company and make decisions related to this.

A Shareholding Company is also known as Joint Stock Company. A Shareholding Company is an association where a fixed capital is distributed over a specific number of shares. The nominal value of each share shall not be less than RO 1.000 (Rials Omani One only). The capital of the Joint-stock Company shall not be less than RO 500,000/- (Rials Omani Five Hundred Thousand only) for Companies which do not offer their shares for public subscription or SAOC written at the end of their names (Closed Omani Joint-Stock Company).

Capital investment shall not be less than RO 2,000,000/- (Rials Omani Two Million only) for Companies which offer shares for public subscription or SAOG written at the end of their names (General Omani Joint-Stock Company). The share of SAOC is subjected to other shareholders’ preemptive rights. The share of SAOG can be sold and trade freely to a third party and a minimum 40 per cent of the company’s stocks are issued for public subscription.

An Omani Shareholding company is required to work under Muscat Securities Market Law.
A Shareholding Company should also get registered under Commercial Register.
Prior approval for incorporating the business is required from the Ministry of Commerce and Industry in Oman.
A Shareholding Company should have more than 3 shareholders.
A minimum of 3 and a maximum of 12 Board of Directors are an essential requirement of a shareholding company.
Board of directors should act according to the power given to them under the contract, and they are liable to the company and its shareholders
Board of Directors should work under the legal restriction and make decisions in favour of the company and shareholders.

A joint venture is that form of business, which establishes a legal relationship between two or more parties without affecting the interest of the third party. As, in a joint venture, there is no legal relationship with the third party, hence, dissolution of the joint venture does not have any liability towards the third party until and unless the third party is having an agreement with any party involved in the joint venture.
A joint venture must have at least two parties.

There is no specific limit for the maximum number of members in a joint venture.
Registration is not compulsory for joint ventures in Oman.
Joint ventures in Oman are required to define the rights of its members, objectives behind the joint venture and finally distribution of profit and loss among members.
The Joint venture can be dissolved when the term of the venture expires or project gets completed or all the objectives behind the joint venture are obtained.
In case of bankruptcy, losses are settled between the members and the venture come to an end.

Representative Trade Office comes under the regulation of Representative Office Regulatory Law. Representative trade offices deal in the services and production or manufacturing the products that have been mentioned in the contract by the parent company. It can only promote or provide services or market sales that are facilitated under the contract done by the parent company.

A representative trade office has several restrictions on their work.
A representative trade office cannot take credit or make an offer.
An authorised manager is required to work in the registered office.
Basic documentation required include certified copy of Commercial Registration Certificate, Certified copy of Article of Association (AOA) and the letter of undertaking.
Helpline Group can manage activities related to forming representative trade offices for you.

A commercial agency is another way to operate a business in Oman. Here, foreign entities are required to have a contract with an Omani nationality holder or an Omani merchant or a commercial company in order to operate the business until and unless it’s a government contract or an activity related to a government project. The agent working under the business should also be registered with the Ministry of Commerce and Industry and a member of the Oman Chamber of Commerce and Industry.

A commercial agency should be registered under the Ministry of Commerce and Industry.
Any dispute between the principal and agent shall come under arbitration by the authority under the Settlement of Commercial Disputes.
Further queries related to how to start a business in Oman as Commercial Agent can be sorted out by just making a call to our representatives.

A company can get full ownership or 100% shareholding by entering into a contract with a government entity or government-controlled entity and can conduct its business in Oman as a foreign branch. This way of investment is the most popular way to get full control over the business. In this type of business form, the parent company is having full control over the branch office, which does not need any local partner or any share capital. This makes parent company liable for all the activities of the branch office. All the related debts and other business liabilities are required to be fulfilled by the parent company.

Branch office’s validity is determined by the extent or validity of the contract
The contract period of a brand office depends on the length of time-limit of the project in Oman.
Branch office should only carry out the same business as it is carried out by the parent company.
Prior permission should be taken from the Ministry of Commerce and Industry to conduct any activity outside the parent company’s portfolio
For more information, you can contact Helpline Group experts.