Question

Support Systems, Incentives and Procedures in Starting Business in Oman.

Evaluate the Support Systems available in Oman for the business. Assess two Support Systems on:
1. Kind of ventures they support;
2. Amount of Money they provide;
3. Other Support Services (e.g. advices, helping with legal formalities. Training, etc.). Presentation of details should in table form with discussions.

Answer 1

1.Oman is currently experiencing economic growth, and is encouraging businesses and new industries to flourish in the country. In addition to oil, the country is working to develop other industries, including mining, construction and infrastructure, import and export trade, and agriculture.

Foreign citizens are able to open a business in Oman, although there are a number of requirements and limitations that must be considered. The country has also created economic free zones to incentivise international investment.

Proceedings

2.To open a business in Oman, citizens from outside the Gulf Cooperation Council must have a minimum investment capital of 150,000 and must apply for a permit from the country's Ministry of Commerce and Industry. It is important to note that foreign investors can only own a minimum stake in the company, no more than 49%. The majority must be owned by an Omani citizen. Therefore, it is recommended to choose a local business partner very carefully, and previous experience of running a business in the Middle East is recommended before proceeding.

All business registrations through the government are conducted in Arabic, so fluency in both spoken and written English and Arabic is recommended.

Company types

After you have decided to set up a business, you must decide what type of business it will qualify as- there are several options.

• Limited Liability Company (LLC) -An LLC is a company with at least two and no more than 40 shareholders and is a popular option for small to medium-sized businesses.

• Branch office- A branch office is a local branch of a foreign business, and is dependent on government support, as the business must provide a public service or utility.

• Representative trade office - This option allows businesses to set up to showcase and promote the products and services of the parent business overseas, and to facilitate contracts.

  Oman Free Trade Zones

  Oman has created several economic free trade zones. These were created to increase international business to the country, and to diversify the country's economy, beyond the oil industry. The zones are predominantly designed for import and export business. Many incentives are available for operating a business in the zones. Free zone business may be 100% owned by foreigners, there are no corporate taxes due for ten years after the business formation, there are no export or import duties, no minimum share capital requirements, and the businesses do not need local support. However, 10% of the company's staff must consist of local employees.

  The free trade zones are located in Al Mazunah, Sohar, Salalah, and Duqm SEZ. Industries allowed to operate in the free trade zones include manufacturing, import and export, warehousing and storage, and assembling and manufacturing.