FOREIGN
BUSINESS AND INVESTMENT LAW |
ISSUED
1974
And Amended by
Decree No. 2/1977 and Decree No. 16/1978
Article 1
It
shall be unlawful for any non-Omani national, whether a natural or
juristic person, to engage in trade or business in the Sultanate of Oman
or to acquire an interest in the capital of an Omani company except as
provided in this Law.
Article 2
Non-Omani
nationals desiring to engage in trade or business in the Sultanate of
Oman or to acquire an interest in the capital of an Omani company may
file an application for authorization to do so with the Ministry of
Commerce and Industry.
Article 3
The
license (authorization) required in accordance with Article (2) of this
law shall not be granted unless all the following conditions are
fulfilled:
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that
commercial business shall be conducted by an Omani Commercial
Company, subject to the stipulations of Article (2) of the Law
governing Commercial Companies and that no shares in the capital
could be held except in one of those companies.
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that
the paid up capital of the Omani Commercial Company shall not be
less than that determined by the Committee for Foreign Capital
Investment referred to in article (9) hereof and is under no
circumstances less than R.O 150,000. However. the paid up capital
referred to may be decreased to a minimum of Thirty Thousand Rials
Omani in accordance with the recommendation of the Committee for
foreign capital investment and the reasonable economic reasons which
are given by the Committee and are approvedby the Minister of
Commerce and Industry after the approval of the Development Council.
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that
the proportion of Omani shareholding in the Capital and share of
profits is not less than that determined by the Committee for
Foreign Capital Investment and is under no circumstances less than
35%.
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that
the Omani Commercial Company shall provide a Bank Guarantee, the
text and value of which shall be defined by the Minister of Commerce
and Industry if he sees by virtue of the power vested in him that
such a guarantee is a pre-condition for granting the required
license in accordance with article (2) above.
Article 4
For
the purposes of Article 3 hereof, the Omani nationals' interest may be
owned by any one or more of the following:
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The
government of the Sultanate of Oman or any of its agencies or public
institution:
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Individuals
of Omani nationality, whether resident in Oman or not: and
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Omani
commercial companies: provided, however, that the percentage
interest of the company subject of the application to be owned by
Omani commercial companies multiplied by the percentage of the Omani
nationals' interests in each such Omani commercial company shall
not. v hen added to the percentages to be owned by other Omani
nationals, if any, be less than the percentage required in Article 3
hereof to be owned by Omani nationals.
Article 5
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For
the purposes of this Law, trade and business shall include all
activities performed in the expectation of profit except as provided
in paragraph (b) of this Article 5.
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For
purposes of this Law, the following shall be deemed not to be
engaged in trade or business in the Sultanate of Oman:
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Service
as an official of the Government of the Sultanate and service or
employment by persons engaged, hired or retained by the Government
of the Sultanate;
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individual
employment in the Sultanate;
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individual
service in the Sultanate as an officer, director or manager of an
Omani commercial company;
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any
non-Omani bank which has a representative office in the Sultanate
but does not transact any banking business in Oman therefrom;
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any-non-Omani
business which has no permanent establishment in the Sultanate,
does not have any officer, director, employee or agent in the
Sultanate for more than 30 days in any calendar year and transacts
no business in the Sultanate through any such officer, director,
employee or agent when such personnel is in Oman.
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any
non-Omani business which has no permanent establishment, assets or
officers, directors, employees or agents in the Sultanate and has
only occasional and isolated transactions in the Sultanate;
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any
non-Omani press representatives, whether of newspapers, magazines,
radio, television or motion pictures, provided that such
representatives are in the Sultanate solely for the purpose of
reporting events occurring therein; and
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any
non-Omani company engaged in the business of providing
international transportation by air or sea; provided that such
company does not provide domestic service within the Sultanate.
Article 6
The
following shall be exempted from the provisions of Article 3 hereof:
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Companies,
institutions and individual which are engaged in activities in the
Sultanate of Oman by virtue of agreements or special contracts
concluded with the government of Sultanate or its public
institutions;
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Companies,
institutions and individuals which are engaged in a project declared
to be an Economic Development Project;
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Companies,
institutions and individuals who are engaged in a profession which
the Council of Ministers has declared to be a profession of critical
need and shortage in the Sultanate of Oman;
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Companies
and institutions which are licensed banking institutions in the
jurisdiction of their organization; and
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Companies,
institutions and individuals which are exempted by Decree of the
Sultan.
Article 7
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The
application for authorization to engage in a trade or business in
the- Sultanate of Oman or to form an Omani commercial company with
non-Omani members to be filed with the Ministry of Commerce and
industry pursuant to Article 2 hereof shall include the following:
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the
constitutive contract or articles and the objects of the proposed
Omani commercial company;
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The
name, address, date and place of birth and nationality (or, in the
case of a juristic person, its name, address, form, nationality
and a copy of its constitutive contract or articles) of each
proposed non-Omani member, unless there are more than twenty in
which case only the names and addresses of the twenty who are to
have the largest interest shall be set forth, and the aggregate
interest in the capital of the proposed Omani commercial company
to be owned by the non-Omani nationals;
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the
name, address and date and place of birth (or, in the case of an
Omani commercial company, its name and registration number in the
Commercial Register) of each proposed Omani member, unless there
are more than twenty in which case only the names and addresses of
the twenty who are to have the largest interest shall be set
forth, and the aggregate interest in the capital of the proposed
Omani commercial company to be owned by Omani nationals;
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such
other information as may be required by the Minister of Commerce
and Industry;
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in
the case of a proposed joint stock company, the application shall
be signed by not less than three founders; and
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in
the case of any form of Omani commercial company other than a
joint stock company, the application shall be signed by not less
than two members.
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The
application for authorization to acquire an interest in an existing
Omani commercial company to be filed with the Ministry of Commerce
and Industry pursuant to Article 2 hereof shall include the
following:
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the
constitutive contract or articles of the Omani commercial company
and its registration number in the Commercial Register;
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the
name, address, date and place of birth and nationality (or, in the
case of a juristic person, its name, address, form, nationality
its name, address, form, nationality and a copy of its
constitutive contract or articles) of each proposed non-Omani
member, unless there are more than twenty in which case only the
names and addresses of the twenty proposed members intending to
acquire the largest interest shall be set forth and the aggregate
interest in the capital of the Omani commercial company sought to
be acquired by them;
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the
aggregate interest in the capital of the Omani commercial company
to be owned by non-Omani nationals if the authorization is
granted;
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the
aggregate interest in the capital of the Omani commercial company
owned by Omani nationals;
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such
other information as may be required by the Minister of Commerce
and Industry; and
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the
application shall be signed by the person or persons having the
authority to sign on behalf of and bind the Omani commercial
company.
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If
the constitutive contract or articles of an Omani commercial company
having non-Omani members are to be amended, such amendment shall be
filed with the Ministry of Commerce and Industry with an application
for approval signed by the person or persons having authority to
sign on behalf of and bind the Omani commercial company.
Article
8
The
Minister of Commerce and Industry shall decide on applications submitted
in accordance with Article (2) hereof on the basis of the
recommendations of the Committee for Foreign Capital Investment and
within two months from the date of application.
Article 9
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There
shall be established in the Ministry of Commerce and Industry a
Committee for Foreign Capital Investment to be under the
Chairmanship of the Under-Secretary of Commerce and Industry and to
include four members of at least Director's rank representing the
following:
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The
Ministry of Agriculture. Fisheries. Oil and Minerals
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The
Directorate Genera1 of Finance
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The
Development Council
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The
Oman Chamber of Commerce and Industry
The
Committee may ask the help of advisors who may attend its meetings but
shall have no right to vote.
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The
Committee shall give its opinion on the applications submitted in
accordance with Article (2) hereof and shall submit its
recommendations to the Minister of Commerce and Industry on the
following:
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The
usefulness of the project under application, the proper amount of
the capital to be invested and the proportion of Omani
shareholding and share of profit, having due regard for the
minimum stipulated in Article (3) hereof.
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The
extent to which the project under application is to be regarded as
a development project in accordance with the stipulation of
Article (10) hereof.
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Dispute
and penalties arising out of the application of this decree.
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Amendments
that may have to be made to this decree from time to time.
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All
matters connected to the terms of this Decree.
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Such
other matters as may be submitted to the Committee by the Minister
of Commerce and Industry.
Article 10
The
Minister of Commerce and Industry may, at his discretion, declare a
project in which non-Omani capital is being invested to be an Economic
Development Project. Each Economic Development Project shall be exempt
from taxes imposed upon its revenue and income, but not other taxes
generally applicable to Omani business, for a period of five years from
a date to be fixed by the Minister of Commerce and Industry.
Article 11
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Omani
commercial companies to which this Law applies are subject to all
laws and regulations of the Sultanate, including the labor
regulations of the Sultanate as well as all regulations and
inspections of commercial and industrial projects normally applied
under Omani law, except as may be otherwise provided in the Law or
applicable laws and regulations.
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The
Minister of Commerce and Industry may specify such books and records
as shall be maintained by Omani commercial companies subject to this
Law in order to evidence their compliance with this Law.
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Officers,
directors and members of and investors in any Omani commercial
company subject to this Law and persons seeking an authorization
pursuant to Article 2 hereof shall not in any manner act or
interfere with the religious or political affairs of the Sultanate.
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The
Minister of Commerce and Industry may, by order, delegate any
employee of the Ministry of Commerce and Industry to inspect Omani
commercial companies subject to this Law during their normal
business hours to ascertain their compliance with this Law. The
Minister's delegates shall have the right to examine all books and
records of such Omani commercial companies, of access to all
premises, to interview whomever they deem appropriate and to prepare
their report thereon.
Article
12
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In
the event the Minister of Commerce and Industry determines that an
Omani commercial company subject to this Law shall have violated any
of the provisions hereof, the Minister of Commerce and Industry
shall give written notice of such violation to such Omani commercial
company directing it to take such action as may be required to cure
such violation and comply with this Law within a period of time to
be set at his discretion but which shall not be less than one month.
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In
the event that an Omani commercial company fails to cure the
violations set forth in the notice sent by the Minister of Commerce
and Industry in accordance with paragraph (a) of this Article
twelve, the Minister of Commerce and Industry may after consulting
with the Committee for Foreign Capital Investments, if organized,
provisionally or permanently withdraw the authorization granted
pursuant to Article 8 hereof.
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In
addition to, or in lieu of. the withdrawal of authorization provided
in paragraph (b) of this Article twelve, if the violation of this
Law related to a failure by the Omani commercial company subject to
this law to provide Omani nationals with the minimum share of its
capital and profits required by paragraph (c) of Article 3 hereof,
the Minister of Commerce and Industry may deem the government of the
Sultanate of Oman to be the owner of the share in the capital and
profits which should have been owned by Omani nationals and. in such
event, such Omani commercial company shall be deemed to be holding
such share in a fiduciary capacity for the government of the
Sultanate and the Minister shall request an accounting from the
Omani commercial company for the entire period it was operating
unlawfully and be entitled to payment of the profits accruing to
such share.
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Notwithstanding
any penalties stipulated in other laws, every foreigner carrying on
business in the Sultanate of Oman without obtaining the required
license according to article 2 of the decree hereof, shall be
punishable by a fine to be decided by the Committee on Investment of
Foreign Capital provided such fine shall not be less than five
thousand Omani Rials.
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Notwithstanding
any penalty stipulated in other laws, every Omani who participates
in an Omani Business Company without obtaining the required license
according to article 2 of the law hereof, shall be punishable by a
fine to be decided by the Committee on Investment of Foreign Capital
provided such fine shall not be less than one thousand Omani Rials.
Article 13
If
the Minister of Commerce and Industry shall refuse to grant an
application filed pursuant to Article 2 or 7 hereof, fail to take action
within the time prescribed by Article 8 hereof or issue an order
pursuant to Article 12 hereof, the persons who shall have filed the
application pursuant to Article 2 or 7 hereof or shall be subject of an
order issued pursuant to Article 12 hereof may refer the matter to the
Council of Ministers and the Council shall make a final decision thereon
with no right of recourse.
Article 14
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Companies.
institutions and individuals which were engaged in trade or business
in Oman prior to January 1. 1970 are not required to submit an
application pursuant to Article 2 hereof: provided that they shall
have made a declaration to the Minister of Commerce 16 and Industry
setting forth a description of their activities within three months
of the effective date of Foreign Capital Investment Regulations.
Such companies, institutions and individuals may benefit from the
provisions of Article 10 hereof provided that they comply with this
Article 14. In the event that such companies or institutions decide
to increase their capital, however, such companies or institutions
shall have to apply in accordance with Article 2 hereof.
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Companies,
institutions and individuals which obtained an authorization from
the Ministry of Commerce and Industry pursuant to Article 2 of the
Foreign Capital Investment Regulations shall be deemed to have
obtained such authorization pursuant to Article 8 hereof.
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The
Foreign Capital Investment Regulations are hereby canceled and all
references there to in any decree, law or regulation shall be deemed
references to this Law.
Article 15
This
Law shall be published in the Official Gazette and shall become
effective on the date of such publication.
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