Monday, September 16, 2019

Islamic Banking in Oman: Rapid Growth Towards Competing with Conventional Banking

Islamic banks in Oman have made their mark in the banking sector since their adoption at the end of 2012.

They can no longer be considered a mere diversification of the banking system. Over the past few years, these banks have developed significantly and are now competing with their conventional counterparts, earning huge profits and enjoying high asset quality.

Strong presence and expansion in Oman

Over the past years, Islamic banks and windows have registered a strong presence across a network of branches throughout Oman. The total number of branches of Islamic banks and windows operating in Oman reached 77 licensed branches at the end of March 2018, according to data published on the Central Bank of Oman’s (the “CBO’s”) website. These branches belong to two Islamic banks, Bank Nizwa and Alizz Islamic Bank; in addition to these, there are six Islamic windows operated by conventional banks.

According to recent data published by the CBO at the end of last month, the total Islamic banking assets in the country had increased from OMR3.3 billion in 2017 to OMR3.991 billion. In the third quarter of 2018 alone, there was 21% growth.

Combined Islamic finance institutions accounted for 12.4% of the total assets of the Omani banking sector at the end of March 2018.

The volume of financing provided to private sector institutions and companies from Islamic banks and banking windows amounted to OMR2.747 billion, equivalent to 1.3% of the total funding provided to the private sector by banks.

Continuing growth

In May 2018, Bank Nizwa, Oman's first Islamic bank, announced a net profit of OMR3.8 million at its annual general meeting, representing growth of 3.343% from the previous year.

The bank’s total assets increased by 35% to reach OMR697 million, up from OMR516 million in the previous year.

Taher bin Salim Al Omari, chief executive officer of the CBO, said in remarks published by the official Oman News Agency (“ONA”) in July of this year, that Islamic banks and windows accounted for 13.2% and 13%, respectively, of the total financing and deposits in the Omani banking sector until the end of March 2019.

He explained that Islamic banks and windows generally require a period ranging between three and four years to achieve good results, and to draw level with other banks.

He also explained that Oman’s adoption of Islamic banking in 2013 was aimed at diversifying banking and financial services in the local market and increasing financial depth and comprehensiveness, in order to serve the national economy.

Islamic banks in the Gulf region hold approximately a third of the assets of their international counterparts, according to a study by the Arab Monetary Fund issued in June 2017.

According to the same study, the period following the global financial crisis in 2008 witnessed a remarkable growth in Islamic banking activity, with a compound growth rate of 17% during that period, reflecting widespread global interest in Islamic banking financing opportunities.

There are around 700 Islamic banking institutions worldwide, of which 250 are operating in the Gulf region.


Read more about Islamic Banking and Finance in Oman in previous Oman Law Blog articles:

Islamic Project Finance - Part 1 (March 2016)

Islamic Project Finance - Part 2 (May 2016)

Islamic Project Finance - Part 3 (September 2016)

Takaful in Oman (May 2015)

Shari'a-Compliant Investment Banking in the Sultanate of Oman (March 2013)

Sukuk in the Sultanate of Oman (February 2013)

Islamic Banking Law Decree in the Sultanate of Oman (January 2013)

Islamic Banking: Home Purchase Financings Part I - The Lease (August 2012)

Islamic Banking: Home Purchase Financings Part II - Musharaka Mutanaqisa (August 2012)

Islamic Banking: Home Purchase Financings Part III - Murabaha and Tawarruq (October 2012)

Islamic Banking: A Brief Introduction (July 2012)

Islamic Banking (November 2012)

Islamic Banking: Shari'a Governance (December 2012)

Islamic Banking in Oman - Part 2 (July 2011)

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Monday, September 9, 2019

Istishkal Appeals

Istishkal is a mechanism that is used to enforce one’s rights to stop the enforcement of an award. This article provides an overview of how Istishkals work.

The Law

Article 363 of the Code of Civil and Commercial Procedures outlines two types of Istishkal:

  1. Istishkal for urgent relief:
    The first type of Istishkal provides a party with urgent relief. This article gives a bailiff  the option to either suspend the execution of an award or continue with the execution of an award. If this type of Istishkal application is made, the parties must appear before the enforcement court. The notice period before which a party must appear at the hearing may be very short, in some cases the parties may be given only 1 hour to appear before a judge, and if the court is closed the parties may even appear before a judge at the judge’s home, if necessary.
  2. Istishkal related to the ownership of property or a substantive dispute in the enforcement of an award:The second type of Istishkal application relates to the suspension of  the enforcement of an award after the award has been submitted to an execution court for enforcement. The enforcement judge decides on the Istishkal application in a hearing after notice is given to the parties. This second type of Istishkal application has been increasingly used to stall the enforcement of awards in Oman.

Procedures

Submission of an Istishkal application:

  1. An Istishkal application is directly submitted to the enforcement judge or to the bailiff in the case of an urgent Istishkal application.
  2. If the Istishkal is of the first type described above, the litigants are assigned to appear before the enforcement judge urgently, even within an hour and at the judge’s residence; the bailiff in this case cannot complete the enforcement procedures before the judge issues his judgment.
  3. If the Istishkal is of the second type described above, the parties are notified of the Istishkal application and a judge holds a hearing to determine whether to grant the Istishkal.
  4. In both cases, the enforcement judge shall issue a judgment on the Istishkal application. The enforcement judge may make the applicant pay a fine if his Istishkal application is not successful. In cases where a party files a vexation Istishkal application to stop the enforcement, the other party may claim compensation.
  5. It takes approximately one month from the time of filing an Istishkal application to a court issuing a decision on an Istishkal application.
  6. Filing an Istishkal application will stall the enforcement.

Appeal of Istishkal decision:

  1. If the Istishkal is of the first type, the appeal shall be made to the Primary Court. The appeal panel at the primary court will consist of three judges.
  2. If the Istishkal is of the second type, when the value of the dispute is between RO 1,000 and RO 3,000 the appeal shall be made to the Primary Court and heard by a bench of three judges. If the value of the dispute exceeds RO 3,000, the appeal shall determined by the Court of Appeal.
  3. An appeal of an Istishkal decision shall be filed no more than 7 days from the date of the judgment.
  4. If the judgment is issued by a Primary Court consisting of three judges, it may not be appealed before the Supreme Court, and if it is issued by the Court of Appeal, it may be appealed before the Supreme Court.
  5. It takes approximately one month from the time of filing an appeal to a court issuing the Judgment.
  6. Filing the appeal will stall the enforcement.

Legal Precedents before the Supreme Court

The Supreme Court has issued judicial precedents which establish the following in relation to Istishkals:

  1. The purpose of Istishkal is a timely or precautionary measure that does not affect the disputed right, which may be presented by the enforcement parties or by third parties of interest.
  2. The Supreme Court is not allowed to prejudice the right to settle Istishkal.
  3. Istishkal judgments issued by the Courts of Appeal may be appealed at the  Supreme Court.

Read more about disputes in Oman and the enforcement of Omani court judgments:

Omani Arbitration Law: Time for a Change? (July 2018)

Enforcement of Omani Court Judgments and Arbitration Awards in Commercial Disputes: Process and Procedure (November 2015)



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Monday, September 2, 2019

In the Pipeline - August 2019


The Statistics and Information Law is promulgated by Sultani Decree No. 55/2019. The executive regulations and decisions in connection with its implementation shall be issued by the Chairman of the Board of the National Centre for Statistics and Information. Also, the Chairman shall issue the National Data Strategy. The aim of the provision is to provide accurate and up-to-date information and data relating to demographics, culture, the environment and various technical, social and economic aspects by supporting the development of scientific and technical research.
Please contact us if you would like more detailed advice on the above.

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Monday, August 26, 2019

Construction of Contracts in English and Omani Law

English law

In English law the process by which courts decide what an agreement means is based on the objective view of a reasonable person, given the context in which the contracting parties made their agreement, though recent judgments suggest that the courts are reverting to a more rigid mode of interpretation paying closer attention to the formal expression of the parties’ intentions and taking more of a literal view of what they have said.

The lead case remains, for now, Investors Compensation Scheme Ltd. v West Bromwich Building Society [1997] UKHL 28, which laid down that a contextual approach must be taken to the interpretation of contracts.  In his judgment, Lord Hoffman set out five principles, so that contractual terms should be construed in accordance with:

1.     what a reasonable person having all the background knowledge would have understood;

2.     where the background includes anything in the ‘matrix of fact’ that could affect the language’s meaning;

3.     but excluding prior negotiations, for the policy of reducing litigation;

4.     where meaning of words is not to be deduced literally, but contextually; and

5.     on the presumption that people do not easily make linguistic mistakes.

Omani law

By contrast, under Omani law, if there is any ambiguity in a contractual term, a subjective test is applied to discover what the real intention of the parties was when drafting the contract.  Article 165 of the Civil Transactions Law, promulgated by the Civil Code, provides that:

“If the wording of a contract is clear, it may not be departed from under the pretext of construing same to find the intention of the parties.”

However:

“If there is ambiguity in the phrase of the contract, it must be construed to find the mutual intention of the parties without limiting the construction to the literal meaning of the words. This shall be guided by the nature of the transaction, common practice and the trust and confidence which should exist between the parties to a contract.”

Further, article 166 of the Civil Code states that any ambiguity in a contractual term should be construed against the party seeking to rely on the provision.

However, it is important to remember that the parties are free to modify or exclude any of these statutory rules of construction by agreement and to stipulate their own rules of construction in their place.

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Monday, August 19, 2019

Latent Defects in Omani Construction Contracts

In Justin Sweet’s authoritative work Defects, the term “defect” is defined as “a failure of the completed project to satisfy the express or implied quality or quantity obligations of a construction contract.”

The question of whether a defect is patent or latent is determined objectively.  A latent defect is one that would not be apparent in the course of a reasonable inspection.  A particular defect may be latent to the casual observer, but patent to a construction professional, such as an architect or engineer.  In a commercial context, there are cases that suggest that a defect is patent if it is reasonably discoverable with the benefit of such skilled third-party advice.

The Omani perspective 

The Fédération Internationale des Ingénieurs-Conseils (FIDIC) Conditions of Contract for Construction, more commonly known as the FIDIC Red Book, is commonly used for building and engineering works designed by the employer in Oman.  (This article references the 1999 first edition.)

The provisions in the Red Book dealing with latent defects are generally consistent with the position under Omani law, essentially that contractors may be liable for latent defects discovered after the performance certificate has been issued by the employer.

Many of those familiar with the construction industry in the Middle East region will be familiar with the term “decennial liability.”  In particular, many will be familiar with a requirement that, in relation to works performed under a construction contract, a contractor and an architect remain legally liable for a period of 10 years after the completion of the works.

A number of countries in the Middle East have similar legal provisions in that regard.  Generally, neither a contractor nor an architect can contract out of the liability.  The liability is a form of strict liability.  There are some differences of opinion among the legal profession as to what extent (if any) a claimant needs to prove fault or causation against a contractor or architect, but it is clear that there is no obligation on a claimant to prove negligence, or a failure to achieve an industry standard, etc.  To put it another way, there is no requirement to demonstrate the contractor or architect was “negligent,” but there are some differing views as to what extent (if any) there is a need to show that some action or inaction by the contractor or architect caused or contributed to the loss and damage.

In most parts of the Middle East, where there is a law imposing decennial liability, it only applies where the relevant structure has collapsed or suffers a major structural defect.  The law in Oman is far more extensive.  The relevant provisions of Sultani Decree 29/2013 (the “Civil Code”) are typical of what might be found in other jurisdictions in the Middle East, in that liability is limited to total or partial collapse, and defects affecting the stability or safety of the works.

However, the Engineering Consultancy Law promulgated by Sultani Decree 27/2016 (the “Engineering Consultancy Law”) provides that decennial liability extends to any defect, not just defects leading to collapse or those affecting stability or safety.  This would suggest that the contractor and the engineer remain liable for ten years for even minor defects.

In summary, decennial liability is broader in Oman than elsewhere in the Middle East, and can cover defects, both patent and latent, that are neither structural nor safety-related.  It is important that, when drafting contracts, contractors and consultants consider how best to allocate risk and protect themselves from claims.  It is also critical that parties to construction contracts keep good records to protect themselves from such claims, including photographs of works, and any relevant warranties given by manufacturers and suppliers.

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Monday, August 12, 2019

New Foreign Capital Investment Law

His Majesty Sultan Qaboos issued Sultani Decree 50/2019 on 1 July 2019, issuing the much-awaited new Foreign Capital Investment Law (the “New FCIL”) that replaced the earlier Foreign Capital Investment Law issued by Sultani Decree 102/1994 (the “Old FCIL”).  The development of the New FCIL took over four years and involved assistance from the World Bank.  During the course of the development of the New FCIL, the comments and input from various stakeholders, and consultation sessions, were organised by the Ministry of Commerce and Industry (the “MOCI”).  The New FCIL comes into force six months after the date of its publication in Official Gazette issue 1300 on 7 July 2019.

Under the Old FCIL regime, foreigners could not undertake commercial activity in Oman unless they had a formal presence by way of a legal entity or an agent.  A legal entity would take the shape of either a commercial company under the Commercial Companies Law or a branch of a foreign company.

While foreigners could register a local commercial entity under the provisions of the Old FCIL and the Commercial Companies Law, their ability to establish a wholly owned commercial company was restricted.  Under the provisions of the Old FCIL, a foreigner could establish a commercial company in Oman, subject to a restriction on maximum foreign ownership in the share capital of the commercial company.  This restriction initially allowed up to a maximum foreign ownership of 49%.  Upon Oman’s accession to the World Trade Organisation (the “WTO”), this restriction was relaxed to a maximum of 70% of the share capital of a commercial company.  As an exception to the Old FCIL, complete foreign ownership was permitted in some exceptional circumstances.  The exceptions were as follows:

(i) establishment in one of the Free Zones;
(ii) establishment under the Gulf Co-operation Council (the “GCC Treaty”);
(iii) establishment under the one of the free trade agreements (“FTA”) ratified and in force in Oman; and
(iv) special projects (with a minimum capital of OMR 500,000) which contribute to the development of the national economy as approved by committee for foreign investment following a recommendation from the MOCI under the provisions set out in the Old FCIL.

The New FCIL removes the requirement for having an Omani partner and shareholding restrictions on foreigners, thereby effectively permitting wholly owned non-Omani companies.

Under the New FCIL, all benefits, incentives and guarantees granted to foreign investment projects under the Old FCIL shall continue until such time that those benefits expire.  The New FCIL is promulgated without prejudice to the regimes pertaining to GCC investment, the Special Economic Zone at Duqm, the Public Establishment for Industrial Estates and the Free Zones.  Article 3 prohibits foreigners from practicing investment activities in Oman save in accordance with the provisions of the New FCIL.  It further provides that foreign investment projects will be subject to the laws of Oman and subject to any international treaty in force in Oman in relation to investment and double taxation.  It appears that FTAs entered into by Oman will continue to be implemented in their usual course.

The New FCIL provides for establishment of an Investment Service Centre (the “Centre”) at the MOCI.  The Centre will be responsible for licensing and easing the procedures relating to grant of licences, permits and other consents required for an investment project.  The Centre will also be responsible for issuing foreign investment licences to foreign investors.  While the Old FCIL also provided for grant of a licence for foreign investment, in recent practice that licence was not issued separately and was considered deemed to have been granted with the company registration documents.

Article 7 of the New FCIL states that foreign investors will be required to abide by the timetables provided by them for the execution of the project and approved in accordance with the economic feasibility study.  It also restricts foreign investors from making substantial amendments to the project without the MOCI’s approval.  It appears that under the New FCIL the foreign investors will be required to submit a business plan.  We expect this to be similar to, although more detailed than, the foreign investment application form that the MOCI introduced few years ago.

In addition, the New FCIL provides that the Cabinet may grant a single approval based on a recommendation of the Minister of Commerce and Industry to establish, operate and manage strategic projects.  This approval will be effective on its own without the need for further procedures.  It appears that once the Cabinet’s single approval is granted as an umbrella approval, then the other project approvals from different governmental entities and authorities would not be required.  What this would entail in practice and how different it would be from the other approvals mentioned in the New FCIL is yet to be seen.

While the New FCIL is substantially different from the Old FCIL, there are a number of similarities.  Article 6 of the New FCIL provides that foreign investment projects may be carried out by an establishment or a company established under the law.  Furthermore, Article 14 provides for a negative list of activities, in other words activities that are not open to foreign investment.  The MOCI maintains a list a foreign investment negative list on the basis of the Old FCIL and following reservations made in its accession to the WTO.  Until such time that a new negative list is published we expect that the negative list currently implemented will continue in effect.

The executive regulations of the New FCIL are to be issued within six months of its effective date.  Until such time, the regulations under the Old FCIL will continue to the extent that they do not contradict the New FCIL.


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Friday, August 9, 2019

In the Pipeline - July 2019


The Foreign Capital Investment Law is promulgated by Sultani Decree 50/2019. It aims to boost and promote foreign capital investments in the Sultanate by expanding investment sectors. The Executive Regulations and implementing decisions shall be issued within six months. Sultani Decree 102/94 and any legislation that contradicts the new law shall be repealed. The Sultani Decree is to be published in the Official Gazette and implemented six months from the date of publication.

The Privatization Law is promulgated by Sultani Decree 51/2019. The law sets out procedures for the privatisation of government facilities so as to expand the role of the private sector. The former privatization Law, Sultani Decree 77/2004, and any legislation that contradicts the new law will be repealed. The Sultani Decree is to be published in the Official Gazette and implemented the day following the date of publication.

Sultani Decree 52/2019 promulgates the Law on Partnership between Public and Private Sector. The law encourages investments by the private sector in the public sector in order to encourage a diverse range of national income sources. Any legislation that contradicts the new law will be repealed. The Sultani Decree is to be published in the Official Gazette and implemented the day following the date of publication.

The objective of the Bankruptcy Law, Sultani Decree 53/2019, is to support businesses in resuming their economic activity while in distress by restructuring the business. Book Five of the Law of Commerce and any legislation that contradicts the new law will be repealed. The Sultani Decree is to be published in the Official Gazette and implemented one year after the date of publication.

The Public Authority for Privatization and Partnership and its system of governance has been established by Sultani Decree 54/2019. The newly established public authority will have a legal identity that will enjoy administrative and financial autonomy. All employees and assets of the Oman Authority of Partnership for Development and the Department of Privatization at the Directorate General under the Ministry of Finance shall be allocated and transferred to the new Public Authority.
Sultani Decree 9/2014 and any legislation that contradicts the new law shall be repealed. The Sultani Decree is to be published in the Official Gazette and implemented from the date of issuance.

Please contact us if you would like more detailed advice on the above.

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Monday, July 22, 2019

Oman Rolls Out Unified Health Insurance Policy - or 'Dhamani'

In March 2019, the Capital Markets Authority (“CMA”) introduced the Unified Health Insurance Policy (“UHIP”), also known as Dhamani, as part of the mandatory health insurance plans being rolled out by the government for expatriate and local workers employed in the private sector.

Under the policy, all persons employed by the private sector in Oman, as well as all visitors to the country, will be required to obtain health insurance through providers authorised by the CMA.  The policy will also provide coverage to the spouses of employees in the private sector, as well as to their children under the age of 21.  The policy does not apply to public sector employees and is distinct from the social health insurance currently in place which is partially or entirely funded by the government.  The premiums in respect of insurance coverage for private sector employees will be payable by their employers.  It is anticipated that health insurance coverage in the private sector will increase from around 470,000 workers to more than 2 million workers.  Domestic workers who are currently not usually provided with insurance coverage by their employers will mandatorily be covered under the provisions of the UHIP.

UHIP sets forth a minimum level of benefits that the insurance policy must provide, including doctors’ fees, diagnostic services, ambulatory services, and emergency services, but will not include treatment in connection with pre-existing conditions, self-inflicted injuries, drug or alcohol abuse, sexually transmitted diseases, or use of alternative medicine or therapies.  Medical treatment in connection with pregnancy and childbirth will not mandatorily be covered under the UHIP and will be left to the discretion of employers.

Under the terms of the policy, the maximum coverage in respect of inpatient treatment shall be OMR 3,000, which will include hospital stay, treatment, medicines, etc.  The maximum coverage in connection with outpatient treatment will be OMR 500, which will include the cost of consultation, diagnostics, medicines and laboratory fees.  The maximum amount payable in connection with the repatriation of a deceased expatriate’s remains will be OMR 1,000.

The CMA is currently in the process preparing the necessary regulations and legislation to implement the policy.  The CMA has indicated that the implementation of the UHIP will take place gradually over 2019 and 2020 and will be determined in accordance with the classification of the private sector companies, with the larger local companies and international companies being expected to comply with the policy initially, with smaller companies being required to comply at a later stage.

In connection with the implementation of the UHIP, the CMA announced a tender in April 2019 in connection with the creation of an electronic platform to enable the efficient rollout of the UHIP by conducting health insurance transactions online between insurance companies, private health service providers, third-party administrators, and the relevant regulators.


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Monday, July 15, 2019

What are the Likely Consequences of GDPR for Companies in Oman?

The EU’s General Data Protection Regulation (“GDPR”) replaces the Data Protection Directive 95/46/EC and is designed to safeguard people’s personal information by harmonising data privacy laws across the EU.

As of 25 May 2018, individuals now have the right to demand that a company reveals or deletes personal data that the company holds about them.  Regulators now have powers to enforce their decisions with penalties.

The GDPR also addresses the export of personal data outside the EU.  Even entities operating beyond the EU, such as those in Oman, could be affected.

The GDPR applies to personal data, including names, addresses, emails, etc. and also IP addresses.  Most companies of whatever description are likely to have databases of personal information relating to clients, employees, and suppliers - all of which information will potentially be covered by the GDPR.

The GDPR would apply to a company operating in Oman if the company:

(a) has a branch, subsidiary or any representative in the EU;

(b) offers any goods or services to persons located in the EU; and/or

(c) monitors the online behaviour of persons located in the EU.

The GDPR sets out how companies must deal with the data they collect.  Breaches of data confidentiality must be disclosed within 72 hours of discovery of the breach.  Sensitive data cannot be used by organisations when deciding on a course of action.  Sending out mass marketing emails to people that have not actively subscribed to receive them is also not permitted.

An organisation that violates the rules could face fines of up to 4% of their global annual revenue or €20 million (approximately OMR 8.77 million), whichever is greater.

Companies that may fall within the ambit of the GDPR should review their policies in relation to:

(a) protecting and managing personal data;

(b) reporting breach incidents within 72 hours; and

(c) determining who will take the lead role in data protection and privacy - the executive
management, the board, the chief information security officer or a data protection officer.

Companies that might be affected should:

(a) establish transparent and easily accessible privacy and data protection policies and procedures;

(b) review and update all existing contracts with data processors and customers to provide for more stringent data protection and consent clauses;

(c) create a framework for accountability by monitoring, reviewing and assessing data processing activities;

(d) evaluate insurance policies to ensure the company is adequately protected in the event of a data breach;

(e) conduct internal training sessions to ensure employee compliance with the new data protection obligations; and

(f) consider whether the employment of a data protection officer is required.

It will be important for businesses in Oman to assess all personal data processing activities.  This should include an audit of any activities likely to involve the processing of personal data relating to individuals in the EU, including information that indirectly identifies such individuals (such as IP addresses or customer reference numbers).


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Monday, July 8, 2019

Establishment of Companies by Sultani Decree

Typically, commercial companies in Oman are incorporated in accordance with, and governed by, the provisions of Sultani Decree 18/2019, promulgating the Commercial Companies Law (the “CCL”).

However, under the provisions of Sultani Decree 33/1974 concerning Companies Established by Sultani Decree, companies may be established by a Sultani Decree.  Establishing a company by Sultani Decree is most often required when a company is established by a governmental body to acquire public or exclusive functions.  These functions typically relate to a specific activity or economic/business sector and, up to the establishment of the company, form part of the competences of a ministry or other government entity.  Usually, a simultaneous and separate Sultani Decree is issued amending the list of competences of such ministry or public authority by deleting the matters delegated to the new company.  An outline of the main provisions in respect of the establishment of a company by Sultani Decree is set out below:


  • The entity proposing the establishment of the company must submit to His Majesty a written statement setting out the reasons preventing the new company’s incorporation in accordance with the CCL.
  • His Majesty shall then rule as to whether such reasons are sufficient for the situation to be considered exceptional.
  • If the company is set up and no explanatory statement has been submitted; or such statement contains material misrepresentations; or such statement omits material facts whose inclusion is necessary to prevent the statement from being misleading, the company shall be deemed void ab initio.  Any persons conducting activities in the name of the company shall be considered personally liable for the obligations arising out of such activities.
  • The new company must take one of the forms of company provided for in the CCL.  However, in practice, a company formed by Sultani Decree tends to take the form of a closed joint stock company.
  • The new company’s constitutive documents or regulations, its governing rules, and its activities must comply with the provisions of the CCL within one year of the issuance of the Sultani Decree establishing the company.
  • Failure to comply with the above shall render the new company void at the end of this period.  Any persons conducting activities in the name of the company thereafter shall be personally liable for the obligations arising out of such activities.
  • The new company must comply with the Commercial Registration Law.
  • The company must be managed in accordance with the provisions of the CCL.  Traditionally, government-owned companies formed by Sultani Decree have employed at the outset governmental staff drawn from the promoting ministry or government unit.  This is usually provided for in the relevant Sultani Decree.

Notable examples of government-owned companies established by Sultani Decree include Oman Post, Oman Fisheries, Oman Oil and Oman Aviation Services.

Read more about the New Commercial Companies Law (Sultani Decree 18/2019):

Oman's New Commercial Companies Law (February 2019)

New Commercial Companies Law Permits Work and Services as Contributions in Kind to the Share Capital of Joint Stock Companies (April 2019)

Access to Company Documents under the Old CCL and the New CCL (June 2019)

The Board of Directors of an Omani Joint Stock Company under the New Commercial Companies Law (June 2019)

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