Minority Shareholders’ Rights Under Omani Law

It is common for Omani companies to have at least one minority shareholder – i.e., a shareholder that owns less than 50% of the company’s shares. Some companies are formed with minority shareholders as part of the original ownership structure, such as a joint venture company in which the majority partner owns 70% of the shares and the minority partner owns 30% of the shares. Other companies add minority shareholders at a later stage, for example by granting a minority interest to a new investor in exchange for an infusion of capital.

For any such company, minority shareholder rights represent a key corporate governance issue. The minority shareholder will desire legal protections to ensure that the majority shareholder cannot use its voting control over the company to abuse the minority shareholder’s interests. Protections for minority shareholders not only promote fair and responsible governance, but also encourage investment by giving parties comfort to invest in companies in which they will not be able to exert voting control.

Minority shareholder rights mainly come in two forms: (i) rights conferred by statute, and (ii) contractual rights between the minority shareholder and the company’s other shareholders, enshrined either in the company’s charter or in a shareholders’ agreement. 

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Double Tax Treaty with the United Kingdom

On 14 October 2021, Her Majesty’s Revenue and Customs (a non-ministerial department of the United Kingdom’s Government responsible for the collection of taxes) (“HMRC”) published the “synthesized” text of the UK’s double tax treaty with Oman, reflecting the changes made to the treaty by the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, known as the Multilateral Instrument (“MLI”). This document results from the UK and Oman each depositing with the Organisation for Economic Co-operation and Development (the “OECD”) its instrument of ratification of the MLI, and reflects the modifications each of those jurisdictions submitted to the depositary on ratification.

The MLI entered into force in the UK on 1 October 2018 and in Oman on 1 November 2020.

The revised treaty, as modified by the MLI, applies:

• For withholding tax purposes, from 1 January 2021. 
• For other UK income and capital gains tax purposes, from 6 April 2022, and for UK corporation tax purposes, from 1 April 2022. 
• For other Oman tax purposes, for taxable periods beginning on or after 1 May 2021.

This follows other synthesised texts published by HMRC. However, this synthesised text does not take precedence over either the UK’s original double tax treaty with Oman or the MLI, which remain the applicable legal texts (for example, in the event of any dispute).

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