How to Set Up an Entity in Oman

Setting up a legal entity in Oman offers businesses access to a rapidly growing economy with a strategic location in the Gulf Cooperation Council (GCC). Oman’s stable business environment, along with its commitment to economic diversification, makes it an attractive destination for foreign investment. While the process can be straightforward, navigating the regulatory framework and understanding local requirements is essential for a smooth establishment.

The entity setup process in Oman is relatively streamlined compared to other Gulf countries, but businesses may encounter challenges related to document requirements, tax registration, and local compliance. The main benefits of setting up in Oman include strong investor protection, access to the GCC market, and an efficient legal system, while the key challenges involve understanding local legal procedures and ensuring compliance with Omani business laws.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in Oman?

Opening an entity in Oman typically refers to registering a business with the relevant government authorities, granting it legal status to operate within the country. Businesses can establish a variety of entities, including a limited liability company (LLC), joint stock company (JSC), or branch office. Most foreign investors choose to establish a limited liability company (LLC), which allows for a flexible ownership structure and protects shareholders from personal liability.

Entity overview in Oman

Here is a summary of the key features of company formation in Oman:

Step-by-step guide: How to open an entity in Oman

Step 1: Choose the right structure

The most common structures for foreign investors in Oman are the Limited Liability Company (LLC) and the Joint Stock Company (JSC). LLCs are the most popular choice due to their lower capital requirements and the ability to operate with a single shareholder. JSCs are typically used by larger businesses planning to issue shares to the public.

Step 2: Verify business name availability

To verify and reserve a business name in Oman, you can check availability through the MOCIIP website. Ensure the name adheres to the local naming conventions and does not duplicate existing businesses. After confirming availability, you can reserve the name for registration.

Step 3: Prepare incorporation documents

The required documents to incorporate a business in Oman include:

• Copy of the passport for all directors and shareholders
• Proof of address (e.g., utility bill or rental agreement)
• Articles of Association for the business
• Lease agreement for business premises
• Application form from the MOCIIP

These forms can be downloaded directly from the MOCIIP website for accurate documentation.

Step 4: Register with MOCIIP

The registration process involves submitting the required incorporation documents to the MOCIIP. The registration can be completed online through their official portal. Once the application is approved, you will receive your business registration certificate and a commercial registration number.

Step 5: Register for tax and social security

After business registration, you must register with the Omani Tax Authority to obtain a tax ID and, if applicable, a VAT number. The tax ID is necessary for corporate income tax filings, while VAT registration is required for businesses exceeding the threshold of OMR 38,000 (≈ $98,000 USD) in annual revenue. Additionally, businesses must register with the Ministry of Manpower for social security and labor purposes.

Step 6: Open a corporate bank account

Oman requires businesses to open a corporate bank account for all financial transactions. Most major banks in Oman have strict Know-Your-Customer (KYC) procedures, which involve submitting documentation related to the company’s incorporation, as well as personal identification for key management. The process typically takes 1–2 weeks.

Step 7: Set up payroll and employment compliance

Before hiring employees, businesses must ensure compliance with Omani labor laws, including registering with the Ministry of Manpower. Payroll management must adhere to local tax regulations, with employers required to make social security contributions for Omani employees. Additionally, businesses must ensure all employee contracts are compliant with Omani labor law.

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Post-registration obligations

Once your entity is established in Oman, you will need to stay compliant with various regulations, including:

• Tax and financial reporting: File corporate income tax returns annually with the Omani Tax Authority and adhere to local accounting standards (Oman uses a local GAAP framework)
• Corporate registers: Maintain up-to-date records of shareholders, directors, and beneficial owners, and report any changes to the MOCIIP
• Compliance tracking: Use a compliance tracking system to ensure all tax, licensing, and regulatory deadlines are met
• Licenses and renewals: Renew business licenses annually and ensure they are updated with any relevant authorities
• Recordkeeping: Retain all business records for at least 5 years, as required by Omani law
• Employment law compliance: Adhere to labor laws, including maintaining compliant employee contracts, paying social security contributions, and meeting health and safety obligations

Taxes and financial considerations

Key tax obligations for businesses in Oman include:

• Corporate income tax: A 15% tax rate applies to all corporate profits. Small businesses with a turnover of less than OMR 30,000 (≈ $78,000) may qualify for tax exemptions
• VAT/GST: A 5% VAT rate is applied to most goods and services, with exemptions for certain sectors
• Payroll/social contributions: Employers are required to contribute around 15.5% of an Omani employee’s salary towards social security
• Accounting standards: Businesses must comply with the Omani accounting framework (similar to local GAAP)

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Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into the United Kingdom—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in Oman?
The process typically takes 4–6 weeks. Find out how long setup takes with our Entity Setup Calculator.

What is the minimum capital required?
The minimum capital for an LLC in Oman is OMR 150,000 (≈ $390,000 USD).

Can foreign companies own 100% of an entity in Oman?
Yes, foreign companies can own 100% of an entity in Oman in most sectors. However, certain industries may require a local partner.

Do I need a local director or representative?
In most cases, a local director is not required, but certain sectors may have specific requirements for local representation.

How much does it cost to register an entity?
The average setup cost ranges between OMR 500–2,000 (≈ $1,300–5,200), depending on the type of entity and any legal fees. Find out the setup cost with our Entity Setup Calculator.

Can I hire employees before the entity is fully registered?
Typically, no. However, Deel’s Employer of Record (EOR) lets you hire and pay talent immediately while your entity setup is in progress.

Can Deel help me open an entity in Oman?
Yes. Deel Entity Setup manages the end-to-end process — from registration to payroll compliance—in over 100 countries. Deel’s local experts handle documentation, filings, and legal requirements on your behalf.

Does Deel offer ongoing compliance and payroll support?
Yes. Deel offers both managed services and self-service tools to help you stay compliant.

If you’re using Deel Entity Management, Maintenance, EOR, or Payroll, our team handles payroll, benefits, filings, and compliance obligations on your behalf.

For teams managing their own entities, Deel Compliance Hub makes staying compliant simple by providing real-time regulatory updates, risk alerts, and workforce insights across 150+ countries. Proactively manage compliance with our Compliance Monitor, Workforce Insights, and an AI-powered Worker Classifier, staying ahead of changing employment laws.

Can I switch from Deel EOR to my own entity later?
Yes. Deel supports seamless transitions when you’re ready.