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Transcript of Doing business in Oman April 2008. 14 April 2008Doing Business in OmanPage 2 Index of topics ►...
Doing business in Oman
April 2008
14 April 2008 Doing Business in OmanPage 2
Index of topics
► Business climate ► Legal system► Business structures► Tax system► Free Zones and Industrial Estates► Labour► Commercial issues► International Agreements and Treaties
14 April 2008 Doing Business in OmanPage 3
Business Climate
► Business friendly government► A robust legal system► A vibrant capital market► The second best performing Arab Economy (out of 40)► The most peaceful country in the Middle East (out of 18)
14 April 2008 Doing Business in OmanPage 4
Legal system
► Primary court► Appeals court► The Supreme court
14 April 2008 Doing Business in OmanPage 5
Regulated industries
► Sector Law (Electricity and Water)► Banking► Insurance► Mining► Tourism► Privatisation► Telecom Regulatory Authority
14 April 2008 Doing Business in OmanPage 6
GCC Privileges
► GCC nationals are treated at par with Omani nationals► GCC common market from 1 January 2008► GCC customs union already in force► GCC nationals ownership of real estate
14 April 2008 Doing Business in OmanPage 7
Business structures
Short term► Branches of foreign companies ► Joint ventures
Long term► Limited Liability Companies (LLC)► Public Joint Stock companies (SAOG)► Closed Joint Stock companies (SAOC)► Commercial Representative Offices
14 April 2008 Doing Business in OmanPage 8
Business structures (contd.)
Branch of a foreign company► 100% foreign ownership► A Contract with the Government or quasi Government
organisation is a pre-requisite► Registration is valid for the contract duration► Continuity of a branch operation is not guaranteed► Tax rates range from 5% to 30%► Branch of a GCC registered company is taxed at 12%
( not for Free Trade Zone entities) ► Effective tax rates may be higher due to related party
disallowances
14 April 2008 Doing Business in OmanPage 9
Business structures (contd.)
Joint ventures► Not a legal entity► Taxable entity► Not a consortium► Share of profits is not taxable for partners► Usually contract specific► Liability of partners is unlimited
14 April 2008 Doing Business in OmanPage 10
Business structures (contd.)
Mixed companies - LLC► Up to 70% foreign ownership is available ► No requirement for a sponsor► Limited liability of shareholders► Minimum capital of RO 150 K► Company is managed by a manager► Shareholder relationships are flexible ► No external reporting is required► Tax rate applicable is 12% on taxable income in excess of
RO 30,000► Dividend received by shareholders is not taxable
14 April 2008 Doing Business in OmanPage 11
Business structures (contd.)
Mixed companies - Public Joint Stock Companies (SAOG)► Minimum capital of RO 2,000 K ► SAOGs are preferred for privatisation projects► Managed by a board of directors► High level of transparency and disclosures► Transferability of shares► Tax rate applicable is 12% on taxable income in excess of
RO 30,000
14 April 2008 Doing Business in OmanPage 12
Business structures (contd.)
Mixed companies - Closed Joint Stock Companies (SAOC)► Minimum capital of RO 500 K ► Shares are not required to be offered to public► Managed by a board of directors► Exit option► Regulated by the CMA
14 April 2008 Doing Business in OmanPage 13
Commercial Representative Offices
► Registrations are allowed► Specific functions – Mainly promotion/liaison► Imports/ Exports/ Sales – not allowed
14 April 2008 Doing Business in OmanPage 14
100% Foreign Owned Companies
► FCIL permits 100% foreign owned entity► Special approval from the Council of Ministers is
necessary► The minimum capital is RO 500K► A number of companies have been already registered
14 April 2008 Doing Business in OmanPage 15
Omani tax system
► Corporate tax is payable by all entities► No personal taxation► Customs duty @ 5%► Social security for Omani employees ► Vocational training levy - RO 100 per employee► No sales tax or VAT► No stamp duties► A new Tax Law is expected► Introduction of VAT ?
14 April 2008 Doing Business in OmanPage 16
Omani tax system (contd.)
Corporate tax
Current tax rates
Min Max .► Any company registered in Oman 12% 12%► Branches of GCC companies 12%
12%► Branches of other foreign companies 5%
30%► Final WHT on certain types of payments 10% 10%
14 April 2008 Doing Business in OmanPage 17
Omani tax system (contd.)
Tax exemptions
5 years tax exemption for:► companies registered in Oman ► engaged in activities such as:
► Industrial, Fishing and Fish processing, Exports► Agriculture, Tourism, Public utility► Education, Hospitals, Airlines, Shipping
► A further renewal of 5 years is possible► Losses during tax exemption period are allowed to be
carried forward in specific circumstances
14 April 2008 Doing Business in OmanPage 18
Land Ownership
► Generally limited to Omanis► GCC nationals – under certain circumstances► Foreigners – in Integrated Tourism complexes
14 April 2008 Doing Business in OmanPage 19
Intellectual Property related laws
► Trade marks law► Patents law► Copyrights law
14 April 2008 Doing Business in OmanPage 20
International Agreements and Treaties
The Sultanate of Oman has entered into Double Tax Treaty (DTT) agreements with a number of countries.
There are also a number of Investment Protection Agreements with several countries.
A Free Trade Agreement has been signed with the USA
Thank you all