Oman, officially known as the Sultanate of Oman, offers abundant opportunities for international investors and aspiring entrepreneurs. As an open economy, it presents a diverse range of possibilities for different corporate structures. Emphasizing an investor-centric approach, the country has established several Free Zones, with the prominent Sohar Free Zone being one of them.
For investors looking to establish a business in Oman, Sohar Free Zone can be a highly attractive option. In this article, we will guide you through the essential information you need to know before embarking on the journey of setting up a company in Oman. Let’s commence by exploring the investment opportunities available in Sohar Free Zone.
Investment Opportunities in Sohar Free Zone
The Sohar Port Free Zone presents a varied range of business opportunities covering multiple industries, with its primary sectors being:
- Petrochemicals
- Plastic
- Iron, Steel, Aluminum
- Auto Parts
- Grains
- White Goods
- Furniture
- Ceramics
The industries mentioned above are among the prominent Lines of business in this Free Zone. Investors also enjoy a multitude of benefits in the area. Let’s explore them.
Advantages of Establishing a Company in Sohar
1. Complete Foreign Ownership:
Sohar Free Zone entices international investors with the favorable circumstance of having complete 100% foreign ownership while setting up a business.
2. Extended Tax Exemptions:
Companies that choose to invest in Sohar Port can benefit from significant and long-lasting tax advantages, as the port assures tax exemptions for at least 25 years.
3. Flexible Omanization Requirements:
“Omanization” is the term used to describe the policy of the Oman government aimed at promoting the employment of Omani nationals in the private sector. The primary objective of this policy is to increase the involvement of Omani citizens in the workforce and decrease dependence on foreign labor. To achieve this, the Omanization policy establishes specific employment targets that companies must meet based on factors such as their size and industry. Additionally, businesses are required to offer training and development opportunities to Omani nationals to enhance their skills and capabilities.
During the company registration process in Oman, adherence to the Omanization policy is mandatory. This means that companies must demonstrate their commitment to hiring and training Omani nationals as part of their workforce. Failure to comply with the Omanization requirements may lead to penalties or delays in the registration process.
The minimum Omanization requirement is set at 15%, with gradual increases over time:
- 25% after 10 years
- 35% after 15 years
- 50% after 50 years
4. Free Trade Agreements:
Sohar Free Zone enables investors to take advantage of free trade agreements, offering them the chance to conduct trade with the United States and Singapore.
5. 0% Personal Income Tax:
Businesses benefit from significant tax relief at the port as it provides exemptions for personal income tax, import, and re-export duties.
Now that you have a clear understanding of why the Sohar Free Zone in Oman is a priority destination, it’s time to progress to the next stage, where you will learn about the essential licenses and permits required.
Licenses and Permits
These licenses and permits are specifically tailored to the type of business and the activities it will undertake. Let’s take a closer look at them.
Types of Licenses Provided in Sohar:
Now, let’s proceed with the company setup process.
- Industrial License
- Light Manufacturing and Assembly License
- Logistics License
- General Trading License
- Service Provider License
- Types of Licenses Provided in Sohar
- Sohar Work Permit
- Common Area Work Permit
- Special Transport Permit
How to Set Up a Company in Sohar Free Zone?
To incorporate a company in the Sohar Free Zone, you need to follow these steps:
1. Application Submission
The initial step in the process is to submit the company incorporation application form. You are required to submit a completely filled Plot Application Form (PAF).
2. Submit the Essential Documents
Upon the submission of the application, it is crucial to provide specific core documents to successfully conclude the registration process. Below is the list of required documents:
Documents Required to Set Up a Company in Sohar Free Zone
Filed and Signed Investor’s form by the shareholders
Copy of Shareholder’s Passport
In case if the shareholder is from outside Oman, the following documents are to be submitted:
Commercial Registration of the company
Board Resolution of the Free Zone Company
Articles and Memorandum of Association
3. Obtain a No-Objection Letter from the MECA
A No-Objection Letter needs to be collected from the Ministry of Environment and Climate Affairs (MECA), that clearly states that there is no objection to the commencement of the project.
4. Due Diligence Process
This will be performed on the shareholders and promoters of the FZ Company. A background check, past projects, and clients’ information will be investigated.
5. Signing of the Agreement
Once done with the above processes, the final step includes the signing of the agreement between the Sohar Free Trade Zone Authority and the new Free Zone Company.
Toward the completion process, the following will be issued:
Commercial Registration Certificate
Affiliation Certificate to Oman Chamber of Commerce and Industry
PO Box No. for a period of one year
Facilities Provided by Sohar Free Zone
- Available land for industrial or logistical use
- Pre-built warehouse for Lease
- Commercial offices for Rent
- Modern Infrastructure
- Direct highways connecting UAE and Muscat
- Road Connection with Saudi Arabia
All the free zones in Oman do provide certain benefits. Alike Al-Mazunah FZ, the Sohar FZ also offers certain facilities for its investors to commence their business operations in a smooth way.
Thus, you can see that the Free Zone comes with a lot of investment options along with multiple benefits to attract foreign investors. Now, the company incorporation process becomes much easier when you have a guide who understands the legal laws of the particular region. IBDco provide the best business incorporation solutions to business investors and entrepreneurs to transform their business dreams into reality. We are a team of experts who aim to serve and help business investors in company incorporation process, along with other services like accounting, legal, tax, visa etc. Contact us today to know more-we’d be happy to assist you.