Wednesday, February 18, 2009

American Company Formation in Oman

The recent implementation of the US-Oman Free Trade Agreement (FTA) is great news for American companies wishing to do business in Oman. Oman’s Ministry of Commerce and Industry (MOCI) recently issued Ministerial Decision 102/08 stating that American companies will now be allowed to open branches in Oman before entering into a contract with the government or a government entity.

This is a significant development for American companies, as branch offices of foreign companies were permitted previously only for companies that had contracts with the government. Even in cases where branch offices were permitted, the foreign company’s activities was restricted to servicing the government contract. Similarly, the Oman branch could remain open only for the duration of the government contract.

Under the FTA and the recent Ministerial Decision, American companies are permitted to form branches in Oman without an existing government contract, and may engage in business with both the public and private sectors. Similarly, American companies wishing to tender for government contracts will have the option of opening a branch in Oman before the contract is awarded.

The MOCI has stated also that American companies may now form wholly American-owned limited liability companies (LLCs). Subject to the terms of the FTA, American companies will be accorded the same treatment as Omani companies in LLC formation. On a procedural level, this means that American companies will only need RO 20,000 (approx. US$52,000) of capital to form the LLC and no Omani ownership will be required.

American companies can now do business in Oman with relatively few barriers to entry. The FTA has provided an unprecedented level of openness and access to the Omani market for American companies and they will enjoy distinct advantages in navigating Oman’s legal and procedural framework. Similarly, the recent Ministerial Decision and other statements by the MOCI make it clear that Oman is serious about implementing the FTA and allowing Omanis and Americans to enjoy fully the benefits it is meant to provide.

To hear more about the FTA, please join us on March 1, 2009, at 9:00 AM Omani time for a discussion of the FTA implementation, in partnership with the Muscat American Business Council (location to be announced). For more details, please contact Githa Nair at