Navigating Oman’s New Commercial Agency Law

Introduction: Oman’s New Commercial Agency Law Explained

Oman recently updated the Oman Commercial Agency Law, reshaping agency-distributor relationships and enhancing transparency. These changes aim to create a more competitive environment, reduce regulatory risk, and clarify obligations for foreign principals, Omani agents, and multinationals. This guide covers updates under Royal Decree 77/26 and Ministerial Decision 245/2025, helping businesses navigate commercial agency Oman rules confidently.

What Is the Commercial Agency Law in Oman? Key Definitions

Under the Oman Commercial Agency Law, a commercial agency is any agreement appointing an Omani entity to promote or distribute a foreign principal’s goods or services in exchange for commission or profit. These agreements must be registered with the Ministry to be enforceable. Key terms include:

• Commercial agent: Licensed Omani entity appointed by a foreign principal

• Foreign principal: Manufacturer or service provider based outside Oman

• Exclusive agency: Single agent for the territory

• Non‑exclusive agency: Multiple agents for the same principal

The law ensures transparency in agency registration Oman and protects both parties where contracts and renewal obligations are defined.

Overview of Royal Decree 77/26 and Regulatory Authority

The primary legal framework is Royal Decree 26/1977, as amended over time (notably Royal Decree 34/2014 and 77/26). The Ministry of Commerce, Industry & Investment Promotion (MoCIIP) oversees commercial agency Oman, requiring agents to register in the official Commercial Agencies Register. Only registered agencies enjoy enforceability under Oman law.

Major Updates in 2025: Ministerial Decision 245/2025

Ministerial Decision 245/2025, issued in mid‑2025, brought two major updates:

• Authorized signatories: Article 13bis introduced strict rules—only shareholders, board members, company managers, or internal financial/admin staff may sign official documents.

• Non‑shareholder manager appointments: Must now be submitted electronically with the appointee’s written consent.

These changes impact agency registration Oman and represent a shift toward modern governance and electronic processing.

Who Must Comply With the Oman Commercial Agency Law?

If you are a local agent, foreign principal, or part of a corporate group, you must comply with the Oman Commercial Agency Law if:

• You distribute goods or services under an agency agreement

• You are licensed via the MoCIIP Commercial Agencies Register

• You operate as a principal-agent structure in Oman

Even renewal commercial agency Oman obligations fall under the law—failure to renew registration can lead to invalidity and sanctions.

Registration, Renewal & Commercial Agency Register Requirements

To comply with commercial agency Oman rules, agents must:

• Submit the signed agency agreement to MoCIIP

• Complete registration in the Commercial Agencies Register

• Renew registration periodically as prescribed by law

• Update registration if there are changes in activity, address, or signatory

Failure to maintain current agency registration Oman status exposes parties to legal risk and non-enforceability.

Authorized Signatories under Article 13bis – What Changed

Article 13bis restricts authorized signatories to:

• Shareholders (alone or jointly)

• Owners of the company’s capital

• Board members

• Company manager or internal financial/administrative employees

This shift aims to eliminate reliance on third-party signatories and strengthen governance under the Oman Commercial Agency Law.

Restrictions on Third-Party Signatories: What It Means for Principals

If foreign principals used group-level employees not formally employed by the Oman entity as signatories, those roles now violate Article 13bis. Renewal commercial agency Oman may be at risk if signatory compliance is not met. Businesses should assess whether their current signatories are eligible under the new law and make changes during the six‑month grace period.

Appointment of Non‑Shareholder Managers: New e‑Filing Rules

Under Ministerial Decision 245/2025, any appointment of a non‑shareholder manager must be:

• Filed electronically via the MoCIIP portal

• Accompanied by written consent from the manager

This modernizes compliance under agency registration Oman, ensuring clear and transparent manager changes.

Renewals Deadlines & Penalties for Non‑Compliance

The Ministry has issued multiple warnings that operating without valid registration or failing to renew your agency status breaches the Oman Commercial Agency Law. Penalties can include fines, license suspension, and inability to enforce agency rights. Agents should monitor expiry dates and renew timely.

How to Structure Commercial Agency Agreements Under the New Law

Best practices for drafting compliant contracts:

• Define term clearly: limited or unlimited duration

• State exclusivity and territory

• Include termination clauses, renewal terms, and compensation provisions

• Clarify roles, rights, and statutory obligations per Oman Commercial Agency Law

• Register the agreement promptly and store authenticated copies

Structured agreements reduce disputes and support enforcement under Oman law.

Avoiding Monopoly Restrictions: Competition & Multiple Agents

Oman’s revisions empower the Council of Ministers to limit agency agreements when signs of monopoly emerge. Foreign principals must manage the number of agents—distribution control, exclusivity, and market concentration are scrutinized. A balanced structure helps avoid commercial agency Oman violations and potential deregistration.

Commercial Agency vs Distribution Agreements: Key Differences

• Commercial Agency Law requires registration; breaches jeopardize enforceability.

• Distribution agreements fall under civil law and typically do not require registration.

• Agents have special protections under agency law (e.g. previous compensation rights), while distributors do not.

• Under the updated law, agent protections are limited to contractually defined rights.

Understanding distinctions matters in structuring legal pathways for Omani market entry.

Due Process for Termination: Compensation Rights & Options

Previously, agents could claim statutory compensation if terminated “without cause.” This protection has now been removed. Now:

• Terminate agency agreements based on contract terms without statutory claims

• Foreign principals can sell directly or appoint alternative agents

• Renewal disputes are contractually, not legally, governed

This modernized approach supports fairer outcomes under the updated Oman Commercial Agency Law.

Record‑Keeping, Documentation & Compliance Monitoring

Maintain:

• Copies of registered agency agreements and renewal certificates

• Governance documents proving signatory eligibility under Article 13bis

• Electronic filing confirmations for manager appointments

• Renewal timelines and compliance logs

Accurate records help demonstrate alignment with commercial agency Oman requirements.

Practical Steps to Align with Oman’s Updated Commercial Agency Law

✅ Identify your current agent or principal structure
✅ Review signatories and manager statuses for compliance with Article 13bis
✅ Register or renew agency agreements via MoCIIP
✅ Re-draft contracts to remove outdated statutory protections
✅ Plan for flexible appointment of shareholders or board members as signatories
✅ Document every process to meet renewal commercial agency Oman requirements

Risks and Consequences of Non‑Registration or Violation

Non-compliance can result in:

• Loss of legal enforceability of agency rights

• Fines or suspension of CR/agency registration

• Damage to reputation and commercial trust

• Inability to renew or amend agency agreements

Avoid these risks by aligning with updated Oman Commercial Agency Law provisions promptly.

Benefits of Proper Compliance for Agents & Foreign Principals

Compliant stakeholders enjoy:

• Legal certainty in agency termination and renewal

• Ability to restructure distribution without compulsion

• Competitive access to Omani market without monopoly limitations

• Trust from regulators, partners, and legal advisors

• Efficient governance aligned with digital filing and corporate practice

Strategic compliance positions your business for growth and regulatory agility.

Conclusion: Staying Ahead in Oman’s Agency Landscape

Oman’s commercial agency landscape is evolving to encourage competition, clarify roles, and streamline governance. The updated Oman Commercial Agency Law and Ministerial Decision 245/2025 introduce modern signatory restrictions and digital requirements that reshape agency registration, renewal, and contract enforcement. Companies that proactively adjust their signatory structures, re-evaluate agency contracts, and maintain up-to-date registrations will operate with clarity and risk resilience in Oman.

FAQs on Navigating Oman’s New Commercial Agency Law

1. What is Article 13bis in the Oman Commercial Agency Law?
   Only shareholders, board members, managers, or internal finance/admin staff may now act as authorised signatories—third parties are excluded.

2. Must every agency agreement be registered in Oman?
   Yes. Under Royal Decree 77/26, only registered commercial agency Oman agreements are legally enforceable.

3. Is compensation still payable if I terminate an agency?
   Statutory compensation rights have been removed. Compensation now depends on contractual terms.

4. Can foreign principals sell directly without an agent?
   Yes. The prohibition against direct sales has been repealed under the updated law.

5. Who needs to submit electronic filings under the new law?
   Any appointment of a non-shareholder manager must be filed electronically with written consent via MoCIIP’s portal.

6. What happens if I fail to renew commercial agency registration Oman?
   Operating with expired registration violates the law, potentially resulting in fines or loss of enforceability.

7. Can third-party group executives act as signatories?
   Not under Article 13bis. Signatories must be affiliated directly with the Omani entity.

8. Does the law limit multiple agents per principal?
   Yes, to prevent monopolies the Council may limit the number of agents per foreign principal.

9. What is the six-month grace period?
   Companies have six months from Decision 245/2025 issuance to align signatories and roles under new requirements.

10. Is digital contract signing allowed?
    Yes, provided signatories meet Article 13bis criteria and consent is filed.

11. How long does registration take?
    Typically within 15 business days after submission to MoCIIP.

12. Are distribution agreements regulated under this law?
    No, those fall under civil contract law and are not registrable under the Commercial Agency Law.

13. Do term renewals require automatic registration?
    No—automatic renewal is no longer guaranteed; renewal depends on application and approval.

14. Can agents challenge deregistration?
    Yes—they can appeal via MoCIIP or judicial process if deregistration occurs due to competition rules.

15. How do we structure compliant agency contracts?
    Clearly define territory, term, termination rights, renewal mechanics, and align with updated law provisions.

16. Are there new compliance audit requirements?
    Not yet, but the Ministry may request documents proving signatories and registration as part of enforcement.

17. Can Oman nationals directly sign agency contracts?
    Yes, as shareholders or board members, they qualify under Article 13bis.

18. What if agent registrations are not updated for years?
    Ministry warnings indicate that non-renewal or outdated records may lead to legal consequences.

19. Does this reform apply to existing agreements retroactively?
    Yes—existing registered agreements must comply with new signatory rules and registration updates.

20. Does Oman allow direct imports from foreign principals without an agent?
    Yes—the requirement to appoint an Omani agent has been repealed, allowing broader market access.