Wednesday, September 7, 2016

Commercial Name Reservations

The Ministry of Commerce and Industry (“MOCI”) has recently issued a Ministerial Decision No. 124 of 2016 on issuing the regulation regulating to Commercial Names (“MD 124/16”).

In order for an investor (i.e., a company or individual) to set up a new company in Oman, the investor shall first identify and seek approval on the proposed name of the new company. Previously, whilst the MOCI permitted investors to include the foreign investor’s name, it has generally prevented the investors from including the word “Oman” in the new company name, unless the minimum capital invested in the company was RO 500,000 or more.   However, under the new MD 124/16 only joint stock companies have the right to include the word “Oman” in the commercial name.  This means that limited liability companies would not be able to include the word “Oman” in the commercial name, regardless of whether the limited liability company has a capital investment of RO 500,000.

The  MOCI  has  recently  taken  the  initiative  in  implementing  rules  and  regulations  relating  to company’s name reservation.  MD 124/16 cancels all provisions or rules that contradict the regulations. Article 4 of MD 124/16 provides that the investor is not permitted to reserve or register the company name unless the name has a meaning or expression in Arabic, and must not include a term or a word that cannot be translated into Arabic.  Such rule however does not apply to foreign branches that are registered in Oman or Omani companies that have joint foreign ownership or foreign companies that have full ownership.

Further, it is not permitted for any branch of a company to hold an independent commercial name different to that of the name of the company.  Any trademark of the establishment or its branches may be registered as per the Intellectual Property Law.

MD 124/16 provides that any names that fall under the following categories are not permitted to be registered:

  • plural of a tribe name, which includes the two letters (AL);
  • a name that is identical to a commercial name of an establishment which has a local and an international reputation;
  • a name which may indicate or include a religious, political, military meaning or content;
  • a demonstrative pronoun, an honorary sign or a special character in any of the regional, Arab or international organizations or one of its institutions;
  • a name that resembles a name of an authority or organisation, a social institution, local charities or international institutions;
  • a name that resembles a registered trademark or its name, or contains one of its components;
  • a  name  that  carries  a  synonymous  meaning  to  the  commercial  name  of  an  establishment  or pluralizes or singularizes the name of a registered establishment;
  • a name that carries the word “Oman” or “Omani” or one of its derivatives or implications, except for the joint stock companies; and
  • a name that indicates an incorrect geographical division of the Sultanate.

Article 8 of MD 124/16 grants the MOCI the power to cancel, or request an applicant to change or amend  the  commercial  name  of  the  establishment  if  it  does  not  comply  with  these  rules  and regulations.   The applicant will bear its costs and expenses associated in amending or changing the name.

An applicant may appeal the MOCI’s decision to cancel the registration or its request to amend the name by submitting a written request to the undersecretary of the MOCI within sixty (60) days from the date of notification of its decision.  The MOCI shall decide on the appeal within thirty (30) days from the date of submission. If no decision is made within thirty (30) days, the decision shall be deemed to have been rejected.

Therefore, in light of the new MD 124/16, it is important for an investor to understand the rules relating to name reservation.  The investor must ensure that they comply with MD 124/16 prior to forming a company in Oman, as it will clearly mitigate any additional expenses (and time) that may be incurred by the investor if it is required to amend or change its proposed name.