Corporate Ownership of Real Estate

Companies in Oman seeking to own land are subject to a number of restrictions under Omani law. The land or real property owned by a company in Oman must be used only for the limited purpose of furthering the objects of the company such as for building the administrative office, warehouse, staff residences, etc. An exception has been made in relation to wholly owned Omani companies whose business objects include owning, developing, and disposing of real property. Additionally, certain wholly owned GCC companies with real estate development objects have also been exempted from this legal stipulation for restricted use of land.

Corporate ownership of real estate is subject to the following restrictions:

• The land must be used for furthering the company's objects;
• Prior governmental approval must be obtained for its usage; and
• The owner may not dispose of the land before the completion of the legally stipulated number of years from the time of acquiring title to it.

One option available to non-GCC companies in Oman that are interested in real estate development is to obtain usufruct rights over the land. Usufruct is a right in land acquired from the owner of the land to exploit and benefit from the land. Usufruct can be obtained for a maximum initial term of fifty years extendable for further terms. The owner of the land must obtain the mandatory governmental approvals before granting usufruct rights. A company can obtain rights to beneficial use of the land by entering into a usufruct agreement with the owner which is subject to government approvals for the usufruct and for the development plans.