Doing Business in Oman FAQ: Local Partners

Can a company, as opposed to an individual, satisfy the minimum 30% local shareholding requirement for an Omani limited liability companies (LLC)? This question arises when a foreign company wishes to establish an LLC in Oman, but must find a local partner in order to fulfill legal and procedural requirements.

Under the Foreign Capital Investment Law (Royal Decree 102/94) (the “FCIL”), there is a mandatory requirement that at least 51% of the shares of a limited liability or joint stock company be held by an Omani natural or juridical person. Although this provision of the FCIL has never been amended, pursuant to Oman’s WTO obligations, companies with only 30% Omani shareholdings are allowed to incorporate without the need for any special approval.

Typically, the 30% requirement is satisfied by an individual Omani owner, often one who offers local expertise to the new LLC.

The answer to whether a corporate entity could satisfy the requirement depends on whether the Omani company is 100% Omani owned or whether it has some non-Omani owners If the Omani company is 100% Omani owned, then it can satisfy the minimum 30% Omani shareholding requirement for the LLC. If it has a single non-Omani owner,
however, it cannot.

This answer may be different if the foreign shareholder is from a country that has a free trade agreement with Oman (such as the U.S. and Singapore). In that case, the result depends on the industry in which the company operates and other factors.