If you’re considering starting your own company, you might think about the possibility of a Free Zone Company Forming in Oman. Free zones are zones of government-owned businesses that provide tax-free company creation. This is why a lot of foreign firms have chosen to establish their operations in this region around the world. Oman is an ideal business destination due to its tax-free business environment along with free zones, which are extremely popular options for them to establish their business.
WHAT IS A FREE ZONE COMPANY?
A Free Zone Company is a company established in an overseas country. It comes with a unique advantage over an onshore business, for example, the lower tax rate as well as more flexible requirements for visas. For instance, companies operating located in the UAE are able to enjoy the benefit of 100% foreign ownership, free tax on export and import as well as no personal income tax as well as other advantages. In order to begin a business within the UAE it is necessary to choose the name and legal type of your company, then choose the type of business structure.
The procedure for creating a free zone business is quicker and cheaper than starting a company on the mainland and comes with less paperwork and more rapid incorporation. Documents, like leases and agreements for business, typically are composed in English and in bilingual.
In several free zones, companies can be registered in as little as 10 days, while certain ones could take less than a week. However, businesses on the mainland typically require at least 51 percent ownership in the local area, which can be a problem. When the law permits full foreign ownership and more than 1,000 businesses are eligible for this.
The free zones of the UAE are not just appealing to foreign companies as well as foreign investors from abroad. It is said that the United Arab Emirates (UAE) has more than 30 free zones and a majority of them are found in Dubai. They can be 100 % foreign-owned and fully repatriated. However, they cannot directly trade through those in the UAE market. But, a free zone business can still do local business by using designated distributors and paying a Customs Duty of five percent.
TYPES OF BUSINESS ENTITIES IN OMAN
There are numerous reasons to have your business registered in the free zone. This includes the area and the tax system. Companies operating in Oman can have 100 percent foreign ownership. This allows foreign-owned companies to do business within Oman and still retain management of their business operations.
In Oman, the Freezone Sohar is located 220 kilometers to the northwest of Muscat It is located close to Sohar’s port. Sohar. The port is situated in the Arabian Gulf, this free zone provides easy access to the Indian subcontinent as well as the East African coast. Another instance of a free zone is Salalah where there is office space for lease and business incubators that have recently built headquarters. The city is home to an ocean-deep port as well as an international airport.
Oman has a substantial oil reserve. However, the majority of the economy is created through agriculture, trade, and tourism. Oman has been continuously expanding its economy since the end of the 20th century. Alongside the oil industry, Oman has also developed areas of industry and real estate as well as infrastructure. Capital requirements for the company are low, and any foreign business that has the minimum capital required of OR 150,000 could be a good option.
Oman has several free zones, with numerous permits and licenses. The first one is Sohar Port and Free Zone which is considered to be the entry point towards the Gulf. It’s a fantastic place to get access to the Indian subcontinent as well as the Gulf in addition. Sohar has three major clusters that include a new bulk agricultural terminal. Another zone that is free can be found in Al Mazunah, which aims to draw foreign investors by providing support to manufacturing and technology industries.
Zones of free trade in Oman allow companies to establish their operations within three economic zones. The three free zones are governed by a specific law that regulates specific privileges and activities. The benefits that free zones provide include international ownership for the company and fewer Omanization requirements and no minimum capital investment requirements, as well as duty-free imports and exports. Furthermore, these zones are exempt from government taxes and regulations as well as there is no limit on the repatriation or transfer of capital.
Alongside tax advantages as well, the free zones of Oman are an ideal location for companies to establish their businesses. These economic hubs are able to draw international companies who are otherwise unable to gain access to Oman. Thanks to its free zones it is now a popular tourist destination for business. There’s a broad range of commercial activities that can be carried out there including food processing and manufacturing. The free zone laws of Oman have been formulated on the idea of equal opportunities for all.
BENEFITS OF FREE ZONE COMPANY FORMATION IN OMAN
The country’s Free Trade Agreements and regionally important commerce routes have made it a popular place to free Zone Company Formation. The US-Oman Free Trade Agreement (FTA) offers significant exemptions from duties to foreign businesses. This is particularly beneficial to businesses that are looking to reduce costs. The FTA is particularly pertinent to electronics, consumer goods as well as the textiles industry. Furthermore, Oman’s domestic security makes the country a favorable investment option for investors.
Oman offers three Free Zones and a Special Economic Zone, all of which offer a variety of benefits to businesses that establish. The free zone of Duqm gives the ability to access an airport international as well as a deep-sea port. It provides flexibility to customs procedures as well as exemptions on duty on raw materials as well as finished products. Furthermore, it provides the ability to compete in terms of utilities and labor. Additionally, it offers advantages to foreign businesses Oman’s free zone is an ideal location for startups and investors too.
It is located in the Muscat Freezone and is located close to its Straits of Hormuz and the Muscat Airport. The strategic location of the Freezone allows businesses to benefit from low freight costs, lower insurance rates, and other benefits. Businesses can profit from the One-Stop-Shop program that allows easy setup and expansion. One-stop-shop programs provide business owners with the opportunity to receive a complete service. A complete business plan as well as extensive support services make zone-based business formation in Oman an attractive choice.
TAX EXEMPTIONS IN OMAN
Free Zone establishment of a company in Oman has several advantages. For one, Oman’s 0 corporate tax rate of 0 percent applies to free zone companies which means that the capital requirements for the establishment of a new company are significantly less than in other countries.
The country’s free zones have many advantages for investors from abroad, such as tax-free exports and imports, duty-free treatment of imported products as well as tax-free repatriation for profits as well as ease of the registration of businesses.
Thirdly, foreign-owned businesses can enjoy the same benefits and advantages as Omani companies, and that includes the absence of Omanization conditions.
Finally, the tax laws of Oman are fairly transparent which means that foreign investors can count on lower tax rates. In addition, the country’s FDI policies encourage foreign firms to establish their headquarters in Oman. The FDI policy is aided by the low cost of doing business in Oman. In addition, the government provides leasing rates that are competitive to certain sorts of companies. Additionally, Oman also has a cost-reflective utility tax.
The judicial system in Oman is fairly stable, although the process can take a long time. Appeal proceedings can be filed within Oman’s three-tier court system including Oman’s Supreme Court acting as the final appeals court.
A new FCIL has eliminated the share capital minimum required which was RO 150,000 (approximately $390,000) as well as eliminated the seventy percent foreign ownership cap. In 2018 2018, the GoO has not made any ministerial resolutions, however, the MOCI has released an unofficial listing of the 37 most commercial activities.
DOCUMENTS REQUIRED FOR FREEZONE COMPANY FORMATION
The first step is to locate a commercial property that can house your business. You must enter into a Tenancy Contract with the property’s owner and obtain the Ejari certificate. Once you’ve got this document it is possible to begin the Free Zone business establishment. It will require an official CV, as well as evidence of residency. The type of documentation that you will need will vary based on the type of institution you’re creating.
In the next step, you’ll have to obtain a Salalah Free Zone license that allows you to work in your Free Zone. The license is granted by the local municipality or the economic department in the region you’re operating in. Be sure to notarize these documents, and then have them certified by authorities such as the Ministry of Foreign Affairs and the Sultanate of Oman Embassy. These are only a handful of the documents you’ll require to complete your FreeZone business creation in Oman.
Once you have all your documents, you are able to begin the process of incorporation. It is important to ensure that you have submitted all documents in order to avoid delays or errors. In this way, your business will not be charged any additional fees which is always a benefit. Sparkle Dubai’s complete solution for FreeZone business formation in Oman can help you set up your business more easily than ever. It is in close contact with the authorities of Oman and can help to make the process of incorporation easier.
FREE ZONE COMPANY REGISTRATION PROCESS IN OMAN
The Free Zone registration of companies for Oman can be an easy procedure. If you’ve decided to incorporate your company then you’ll have to register your company through the local Free Zone Authority. This involves filling in the PAF (Plot Application Form) and submitting it to the Free Zone Authority, and complying with all the rules. Additionally, you’ll need proof of the shareholder’s passport to complete the procedure.
In the end, the Free Zone Authorities will perform a Due Diligence process regarding your promoters and shareholders and will also provide information on your customers. Background checks are performed on your clients too. Once the registration process is completed then authorities from the Sohar Free Zone Authorities will sign a contract with a brand new FZ company.
After you’ve finished the process of registration through the officials of the free zone, you’ll be required to send the required documentation to Muscat’s Municipality. The documents you require are for a limited liability corporation shareholders’ documents, shareholder documents, as well as a constitutive contract. Each of these documents has to be authenticated, notarised, or consumerized, depending on the kind of company. In Oman, it is also possible to decide to set up an economic zone.