Advantages
Oman offers following advantages to the foreign investors to invest in oman.
- Political Stability.
- Liberal foreign ownership in companies permitted.
- Oman is rich in oil and gas.
- Capital and profits of a business entity is fully repatriable.
- No personal income-tax. All individuals can fully repatriate their savings.
- Committed to privatization, industrialization, economic diversification and development.
- Free trade and open market policy.
- Low income tax rate structure for companies and double taxation relief treaties available with many countries.
- Income tax holiday for a non-renewable period of five years available for entities carrying its main activities in the field of industry.
- Geographically ideally located, proximity to Gulf, Asian and African markets.
- Well regulated stock exchange.
- Government leased land available at a concessional rate with good utilities.
- Modern infrastructure with good roads, airports, sea ports, and state of the art telecommunications and other services.
- English is used widely in day to day business commerce.
- Free trade zones in Salalah, Sohar, etc., offering attractive benefits to investors viz. full foreign ownership, low Omanisation, tax and custom exemption etc.
Economy and Business
Oman is an oil and gas based economy with oil and gas sector accounting for about 71% of government revenues and contributing about 50% to the Gross Domestic Product (GDP). Although the non-oil sectors contribution to GDP has been steadily increasing over the years, Oman\'s dependence on oil is likely to continue in the years to come. The government strategy for economic development is based on a series of five year development plans, and has the primary goal of a balanced government budget, encouragement of the private sector, Omanisation and diversifying the economic base of the country.
The monetary unit of Oman is Omani Rial (R.O.). The Rial is divided into 1000 equal units called Baizas. The Rial is tied to US Dollar, at the rate of Baizas 385.5 to US $ 1. There are no exchange controls in any form on inward / outward investment or on repatriation of capital and profits, either by nationals or expatriates.
The Capital Market Authority (CMA) regulates the securities market in Oman. The Capital Market Authority Law governs all the listed companies in Oman. Muscat Securities Market is the stock exchange of Oman. Membership in the exchange is compulsory for Omani licensed banks, public joint stock companies, and specialised loans institutions whose shares are listed in the securities market.
Corporate Taxation
Only Commercial Companies are liable to pay income tax in Oman. There is no personal income tax, fringe benefits tax, gift tax, wealth tax or any form of estate duty, and there is no sales tax or value-added tax. Under the Oman Income Tax Law, Oman has adopted a global tax system whereby a company in Oman is taxed on its entire income, wherever earned in the world, subject to provisions in Oman tax law and Double tax treaties to avoid International double taxation. The Executive Regulation to the Oman Tax Law provides the detailed rules which apply to the tax treatment of certain income and expense items, thin capitalization rules and specific forms to be completed for tax purposes.
Corporate Tax Rates
Under the Income Tax Law of Oman, income-tax rate applicable to any business establishment, Omani company or Permanent Establishment (i.e. foreign branch), for any tax year would @15% on the taxable/assessed income.
In the case of small enterprises engaged in permitted activities, tax will be levied @ 3% on the taxable income on the satisfaction of all the following criteria;
- Registered Capital not more than RO.50,000,
- Gross annual Income not exceeding RO.100,000, &
- Average number of employees not exceeding 15
Withholding Tax
As per the Income Tax Law of Oman, tax shall be charged on the following types of income accruing or arising in Oman:
- Royalties
- Consideration for research and development
- Consideration for the use of or right to use computer software
- Fees for management or performance of services
- Dividend on shares or interest.
The tax mentioned above shall be charged at the rate of 10% of the gross amount of the aforementioned types of income paid or credited to the account of any foreign person that does not carry on any business in Oman through a permanent establishment situated therein or that such person carries on business in Oman through a permanent establishment but the payment does not constitute a part of the gross income of that permanent establishment. Any taxpayer that has paid or credited any of the amounts as specified above shall be liable to deduct tax from the gross amount paid or credited and remit the same to the Tax Authority not later than 14 days from the end of the month in which the amount is paid or credited, whichever is earlier.
The Sultanate of Oman
The Sultanate of Oman is one of the six Gulf Cooperation Council countries, the others being The Kingdom of Saudi Arabia, Kuwait, Bahrain, Qatar and the United Arab Emirates. It stretches over 300,000 sq. kms. with a coastline of over 1,700 kms. The highest executive authority is the Council of Ministers deriving its power from His Majesty the Sultan, to whom it is collectively responsible.
The official language is Arabic and all communication with government is generally required to be made in Arabic. English is generally used for all written communication between businesses.
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