How to Establish a Branch Office in Oman?

by Zaara 03, May 2021

How to Establish a Branch Office in Oman?

It is essential to create a global footprint for every organization to set its respective industry benchmark. Although it is necessary to build influence and produce maximum leads in the domestic sector, its growth will be sluggish without globalization. In addition to several other advantages, opening a branch in an international area will expand revenue prospects by expanding their services into the markets.

Oman is said to be the business-hub for all the start-ups and existing companies. And there is a myriad of opportunities to look forward to any investor seeking to obtain a presence in the Oman market. While some set up a business in the mainland or a free zone, others open a branch or a representative office to grow their Middle-East company.

The Sultanate of Oman has worked diligently as a commercial center and has spread its wings to embrace all corporate frameworks. Establishing a company in Oman is a simple task, as it offers several choices for foreign investors and business owners to conduct their business. The formation of a branch office turns out to be one such choice. This blog will guide you through the procedure of opening a branch office in Oman. Let's begin by knowing what the branch office's all about.

What Is a Branch Office?

The branch’s general meaning refers to the expansion or division of the core platform and has the same origins. If a corporate company wishes to extend its presence to some other area by holding ownership in its own hands, it would further develop its expansion. Such a company’s growth consists of small departments that focus on marketing, human resources, accounting, etc., referred to as a branch office. Now, let’s proceed towards establishing a branch office in Oman.

Why Open a Branch Office in Oman?

Foreign businesses can acquire a formal presence in Oman by setting up a branch office in Oman. Unlike the case of a local limited liability corporation, a branch office with 100 % oman national ownership may be formed and has the same legal existence as its parent company and operates on behalf of its parent company.

The key characteristics of the Omani Business Setup:

  • Branch offices are deemed to be fully-fledged corporations.
  • Branch offices are allowed to conduct contracts or other tasks, as stated in their license.
  • International companies are permitted to create wholly-owned branches in the Emirate but must have an Oman citizen a 'Service Agent.'

The local service provider shall be an Oman citizen or a wholly-owned entity by Oman nationals, as set out in an agency arrangement signed before a local notary public.

Types of the Foreign Branch Office in Oman

There are mainly two types of branch offices established in Oman: Oman Mainland and free zone branch offices.

The critical distinctions between the two forms of business are:

  • Free zone branch offices will be subjected to the identification and license standards levied by the jurisdiction under which they work.
  • Free zone branch offices will be subjected to strict capital conditions in Oman’s free zones, although there are no minimum capital requirements for incorporating a branch office in Oman mainland.
  • Free zone branches are restricted to completing their activities in the free zone they were registered.

The Companies Law allows a foreign company to exercise its main activity in Oman by opening a branch or a representative office.

A foreign business that opens a branch in Oman may openly carry out the activities for which it is authorized. In contrast, a representative office may only carry out promotional activities for the parent company’s goods and services.

To engage a foreign branch to work in Oman, it should receive a license from the Ministry of Commerce and Industry before obtaining a permit from the Sultanate of Oman.

It is now allowed for foreign professional and service companies to open their Branch in Oman without the Ministry of Commerce and Industry.

How to Establish a Branch Office in Oman?

The life of a branch office in Oman deals with a contractual period with an Omani government agency or a quasi-government agency. Once the deal has entered its termination point, the commercial registration comes to an end. Establishing such a corporate organization would not require a minimum capital allocation, plus the internal set-up process is much more straightforward than the parent corporation. Next, you will deal with the needed vital document, followed by the branch office’s essential phase in Oman.

What Are the Documents Required to Establish a Branch Office in Oman?

  • Registration form to register the Branch Office
  • Certified versions of the Memorandum and the Articles of Association
  • Certificate of Establishment of Business
  • Letter of permission from the Corporate Office to the Division Manager
  • Copies of the ID cards of the authoritative signatories
  • Authenticated letter from the Min Office claiming that it assumes all the duties of the Branch Office.
  • Copy of the deal signed by the Government of Oman, indicating the number of contracts, date of commencement, and the contract’s expiry.

What Is the Process to Open a Branch Office in Oman?

Omann provides an easy and smooth way to open a branch office in Oman. If you are looking to start a branch office in Oman, we have listed down steps to follow for your ease.

1. Submission of Applications

It is the first phase in which an application must be submitted to the Investors Services Department, claiming that a branch office must be incorporated.

2. Signing of Application Form

It is the next stage in which the supporting documentation must be submitted along with the properly signed application form.

3. Collection of Registration Number

The computerized system produces the application number and submission date to the claimant via registered mail and contact information.

4. Checking the Status of the Request

The next move is to review the application’s status where it shows whether it has been accepted, denied, or otherwise needs additional details.

5. Certificate Collection and Payment of Fees

It is the final step in which the investor must pay the sum necessary to obtain the Commercial Registry Office’s licenses and registered documentation.

Advantages of Establishing a Branch Office in Oman

As part of the application process of the incorporation of a branch office in Oman, an investor or company owner would be able to make use of benefits such as:

  • No minimum demand for capital
  • Administrative responsibilities are being reduced to a lesser degree.
  • The subsidiaries are 100 % owned by the parent company.
  • The parent company shall incur liabilities.
  • Gateway to a new platform
  • Deals with the Government of Oman that boosts goodwill

You have now reached the point where you have a thorough understanding of what a branch office is all about, how to start the process of creating it, and the advantages that you, being an investor or a company owner, will reap. All you need now is a guide, a spark that will motivate you to take the first step.

At Commitbiz, we take care of the same. We are a team of experts who help build business roots and incorporate legal, visa, accounting, and legal processes for our customers. To take your idea to the next phase, and initiate the incorporation process, contact us today. We’d be delighted to guide you.