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Setting Up a Branch of a Foreign Company in Oman: Complete Guide to Registration and Compliance
Why Establish a Branch Office in Oman?
Setting up a Branch of a Foreign Company in Oman offers international businesses a strategic foothold in one of the Gulf’s most promising markets. A branch office allows a foreign entity to operate in Oman while retaining 100% ownership, providing full control over operations, branding, and profits. However, a branch is not a separate legal entity; it operates under the parent company’s name and liability.
For companies engaged in government contracts, large infrastructure projects, energy, engineering, consultancy, or specialized services, opening a branch office is often the most suitable structure to fulfill project-based operations while complying with Omani law.
Branch Office vs. LLC vs. Representative Office in Oman
Before proceeding, it’s important to differentiate between business structures available to foreign investors in Oman:
| Entity Type | Ownership | Legal Status | Scope of Activity |
|---|---|---|---|
| Branch Office | 100% Foreign Ownership | Extension of Parent Company | Can engage in commercial activities; typically project-based |
| LLC (Limited Liability Co.) | Up to 100% Foreign Ownership | Separate Legal Entity | Full commercial license to operate across Oman |
| Representative Office | 100% Foreign Ownership | Not a Legal Entity for Trading | Marketing and research only, no direct sales or contracts |
For foreign companies awarded government or public-sector contracts, or operating in regulated sectors, a branch office is the preferred choice.
Eligibility Criteria for Setting Up a Branch in Oman
Foreign companies are allowed to set up a branch in Oman under the following conditions:
The branch must be established for the purpose of executing a specific government or semi-government contract.
The parent company must be legally incorporated and operating in its home country.
The branch cannot engage in commercial activities beyond the scope of the awarded project(s) unless special permissions are obtained.
The foreign company must appoint a resident Omani agent or representative for service of process.
Step-by-Step Process to Register a Branch of a Foreign Company in Oman
1. Obtain Contract Approval
Secure a project or service contract from a government body, semi-government entity, or state-owned enterprise.
The contract will serve as the basis for branch registration.
2. Reserve Trade Name
Reserve the branch’s commercial name through the Ministry of Commerce, Industry & Investment Promotion (MOCIIP).
The trade name must reflect the parent company’s name plus “Branch”.
3. Prepare Required Documents
Submit notarized and legalized documents including:
Parent company’s Commercial Registration Certificate.
Articles of Association and Memorandum of Incorporation.
Board Resolution authorizing branch establishment in Oman.
Power of Attorney in favor of the branch manager.
Parent company’s audited financial statements (typically last 2 years).
Passport copies of branch manager and authorized signatories.
Copy of the government contract awarded.
Any sector-specific approvals (if applicable).
4. Commercial Registration with MOCIIP
File an application for Commercial Registration (CR) as a branch office.
Pay the applicable registration fees.
Upon approval, the CR certificate will be issued, officially registering the branch in Oman.
5. Municipality License & Chamber of Commerce Registration
Obtain a Municipality License (Trade License) for the office premises.
Register with the Oman Chamber of Commerce and Industry (OCCI).
6. Tax & Labor Registration
Register with the Tax Authority for corporate tax compliance.
Enroll with the Ministry of Labor for employee and Omanisation compliance.
7. Immigration & Work Permits
Set up credentials with the Royal Oman Police (ROP) for visas and labor clearances.
Apply for work permits and labor cards for foreign and local employees.
Documents Required for Branch Registration in Oman
| Document | Requirement |
|---|---|
| Parent Company’s CR & Articles of Association | Legalized & translated into Arabic |
| Board Resolution for Oman Branch | Legalized, authorizing Oman branch establishment |
| Power of Attorney (POA) | Appointing branch manager, legalized and translated |
| Audited Financial Statements | Last 2 years, legalized |
| Government Contract Copy | Demonstrating project-based eligibility |
| Manager’s Passport Copy | For MOCIIP records and commercial registration |
| Office Lease Agreement | For municipality license |
| Sectoral Approvals (if applicable) | For regulated industries like oil & gas, telecom, etc. |
Compliance Requirements for Omani Branch Offices
Operating a Branch of a Foreign Company in Oman comes with several ongoing compliance obligations:
Scope Limitation: Branch activities are limited to the contract(s) for which it was established.
Omanisation: Must adhere to Omanisation targets by employing a specific percentage of Omani nationals.
Tax Compliance: Subject to 15% corporate tax on income derived from Omani operations.
Annual Financial Reporting: Maintain audited financial statements as per Omani commercial law.
Labor & Immigration Compliance: Ensure work permits, labor cards, and visa quotas align with project needs.
Municipality & OCCI Renewals: Trade licenses and Chamber memberships require annual renewal.
Regulatory Reporting: For certain sectors, regular compliance reports may need to be submitted to relevant authorities.
Key Advantages of Setting Up a Branch in Oman
100% Foreign Ownership: Retain full control over operations and profits.
Direct Execution of Government Contracts: Simplified legal structure for project-based operations.
Simplified Tax Structure: Straightforward corporate taxation without additional withholding complexities.
Brand Presence: Operate under the global brand while legally recognized in Oman.
No Minimum Capital Requirement: Unlike LLCs, branches don’t require capital injection.
Ease of Project Closure: Once the project is completed, branch deregistration is relatively streamlined.
Limitations of a Branch Office in Oman
Cannot engage in commercial activities beyond the scope of the awarded contract.
The parent company holds full liability for the branch’s obligations.
Requires local agent representation for legal notices.
Not suitable for businesses seeking to operate multiple diversified ventures in Oman.
Why Partner with Corporate Services Experts in Oman?
Setting up a Branch of a Foreign Company in Oman involves legal documentation, notarization, ministry coordination, and ongoing compliance management. Partnering with local corporate services experts ensures:
Efficient branch registration process.
Assistance with document legalization and Arabic translations.
Seamless coordination with MOCIIP and other regulatory bodies.
Ensured compliance with Omanisation, tax, and labor laws.
Hassle-free renewals and branch closure procedures.
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