Doing Business in Oman

Do you want to expand your business into Oman or hire employees there? Find out the key things you need to know about Oman expansion below.

Oman Economy Overview

Currency

Omani Rial (OMR)

Working hours

Typically 40–48 hours/week, depending on the sector

Public/bank holidays

Approximately 14 public holidays (including religious holidays)

Capital

Muscat

Languages

Arabic (official), English is widely used in business

Population

~5.0 million

Minimum hourly salary

Oman sets a monthly minimum wage (primarily for Omani nationals) rather than an hourly one. As of recent figures, the minimum monthly salary for Omanis is around OMR 325; there is no mandated minimum wage for expatriate workers, though their compensation is typically governed by employment contracts.

Tax year

1st Jan – 31st January

Date format

YYYY/MM/DD

Misclassification penalties

Employers who misclassify employees (particularly regarding social security registration for Omani nationals) may face fines, back payments to social insurance funds, and potential legal consequences under Oman’s labor laws.

Fun fact

Oman is the oldest independent state in the Arab world, with a history dating back over 100,000 years. It’s also one of the oldest human-inhabited places on Earth.

The Sultanate of Oman is a small, oil-rich country in the southeast of the Arabian Peninsula bordering Saudi Arabia, the United Arab Emirates (UAE), and Yemen. This country has a long history of independence and is one of the most stable nations in the Middle East, with a global peace index ranking of 37th most peaceful country in the world. Oil was discovered here in 1964, and this proceeded to transform the country’s economy, spurring incredible growth.

As of 2024, the GDP of Oman was $109.99 billion and is expected to grow by another 3.1% in 2025. Being highly based on hydrocarbons, the economy is highly susceptible to global prices, however. In an effort to create greater stability for the 5.502 million people who call Oman home, the leadership of the country has begun to implement diversification efforts that focus on other industries. In the meantime, Oman is still considered by the World Bank to be a high-income country with a per capita GDP of $20,230/person per year. If this sounds like the kind of market you’d like to get into as an investor, this article will take you through the ways you can hire workers and start doing business in Oman.

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Overview of Oman's Economy

Oman uses the Omani rial (OMR) as its currency which is roughly equal to $2.60 USD. With an expected GDP of $111 billion in 2025, Oman has a mid-sized economy and is an important regional player though it’s somewhat overshadowed by the much larger Saudi and UAE economies. During the 1960s and 70s, oil revenues spurred incredible growth for the country. Even in the period from 1980 to 2022, the GDP grew by 1539% despite major oil price drops in 1986, 2009, and 2015 and the global pandemic in 2020.

Sector	Contribution to GDP (2023)	Key Aspects
Industrial	31.7%	Manufacturing sector, known as the “world’s factory,” producing electronics, apparel, and machinery; crucial for global supply chains.
Service	52.8%	Substantial growth in financial services, real estate, and telecommunications; major cities like Shanghai and Beijing as commerce hubs.
Agriculture	7.1%	One of the world’s largest producers and exporters of rice, wheat, and corn; ensures food security and employs a significant population.

While oil revenues have permanently changed the lives of the Omani people, the country’s leadership is still concerned with protecting its economy from the impact of fluctuating global oil prices. To this end, it has begun to invest in diversification projects and implemented a development plan called Vision 2040. This plan includes employment, digital transformation, financial sustainability, and investment and export development programs aimed at strengthening the economy and improving the lives of Omanis. It includes the goals of building and improving non-hydrocarbon industries, including fishing, agriculture, manufacturing, mining, logistics and transportation, energy, and tourism. As of 2022, agriculture contributed just 1.8% of GDP, while industry (including oil and gas) contributed 57% and services 44.5%. Tourism and logistics are currently emerging as key industries in the country.

Manufacturing in Oman is focused on refining petrochemicals and mining products like gypsum, dolomite, and copper). The main exports of the country are petroleum products followed by nitrogenous fertilizers and semi-finished iron. These products are largely exported to China, India, South Korea, the UAE, and the US. Oman imports refined petroleum, cars, iron ore, gold, and broadcasting equipment mostly from the UAE, Saudi Arabia, India, China, and Qatar.

Despite being a high-income country, Omani employees work for relatively affordable wages. The minimum wage in the country is 325 OMR/month (around 845 USD). Workers are also entitled to a 3% raise every year as long as they don’t receive poor performance reviews. Employers are obligated to pay an additional 12.5% of workers’ salaries for social security, worker injury insurance, and job security schemes. Even with these contributions, however, Omani workers can cost less than employees in other countries.

Taxes

Employer Tax: (~11% – 14% for Omani Nationals)

Oman’s social security system primarily applies to Omani nationals; expatriates generally do not participate in the same scheme:

Social Security (for Omani employees)

Employers typically contribute 10.5% of gross wages to social insurance for pensions, plus around 1% for workplace injuries, totaling around 11.5%.

Note: Expatriate employees are not required to contribute to Oman’s social security but may be subject to private or company-specific insurance plans.

Employee Tax: (~7% for Omani Nationals; 0% for Expatriates)

Social Security (for Omani employees)

Omani nationals typically pay 7% of their gross salary toward pensions and other social insurance benefits.

Note: Expatriates do not pay into Omani social security but may have voluntary or employer-provided medical and insurance coverage.

Personal Income Tax

No Personal Income Tax

Oman does not levy a personal income tax on individuals, whether Omani nationals or expatriates. The government primarily relies on corporate taxation, customs duties, and other fees for revenue.

Note: Oman has been considering implementing personal taxation measures or broadening indirect taxes in recent reforms, but as of the latest updates, no personal income tax is in effect.

Overview of Oman’s Business Regulation

Oman has liberalized its economy and is very open to foreign trade and investment. It offers free zones and various incentives to investors. However, there are also lots of regulations to be aware of if you want to set up a business in Oman.

Registration and Compliance

Foreign investors looking to incorporate entities in Oman normally choose the forms of limited liability companies (LLCs) or free zone companies (FZCs). LLCs for general trading can be 100% foreign-owned. However, LLCs for purposes of consultancy, need to have at least one Omani shareholder and be not more than 70% foreign-owned. LLCs and FTZs require only one shareholder and one director and a minimum paid-in share capital of just 1 USD. LLCs can also be later changed fairly easily to public limited companies (PLCs).

The World Bank gives Oman an excellent score of 93.5% and a global ranking of 32nd for ease of setting up a new business. Incorporating an LLC can take as little as four days and normally requires the following four steps:

Obtaining a certificate of good standing from the police for the company founder
Registering the company with the Commercial Registry
Registering for a tax number with the Tax Department, Ministry of Finance
Making a company seal

In general, companies pay a moderate corporate income tax (CIT) rate of 15%, though Omani-owned LLCs can receive a reduction of 3% if their gross annual income doesn’t exceed 100,000 OMR. VAT on goods and services supplied in Oman is just 5%. Withholding taxes for foreign-owned companies are generally 10% on royalties, considerations, and service fees. Employers must contribute 10.5% of workers’ salaries to social security, 1% to worker’s compensation, and 1% to job security schemes. Employees are deducted 8% of their salaries for these same schemes.

However, Oman features free zones, scientific zones, and industrial cities that all offer special incentives to foreign businesses. In free zones, entities can be 100% foreign-owned and be exempt from minimum capital investment requirements. They can also be exempt from paying taxes on profits and dividends for 30 years and from customs duties on imports and exports.

In Scientific Zones, companies receive up to 15 years of exemption from income tax and customs duties. In Industrial cities, companies can be exempt from tax on net profit for five years, can be 100% foreign-owned, and have up to 65% foreign employees.

Employment Laws

By law, Omanis work 40-hour weeks. They’re entitled to 30-minute breaks for meals with every six continuous hours of work. Overtime can be required, but employees cannot work more than 12 hours per day. Daytime overtime is paid at 125% of normal wages, while nighttime overtime is paid at 150%. Workers must receive 30 days of fully paid annual leave as well as 14 paid public holidays per year. Maternity leave is 98 days and is fully paid by social security. Paternity leave is seven days and is also fully paid.

Intellectual Property

Copyrights in Oman last for the author’s lifetime and an additional 70 years. Trademarks can be registered for ten years and then renewed for similar periods. Patent rights are protected for 20 years.

What Are the Benefits of Doing Business in Oman?

Many foreign investors find that there are numerous benefits to doing business in Oman. These include:

Stable political environment
Strategic location with access to African, Asian, and European markets
Favorable tax policies, including Free Zones and other special economic zones
A skilled and educated workforce
Relatively affordable employees for a high-income country

What Are the Downsides of Doing Business in Oman?

Not everything is positive about doing business in Oman. As with any business opportunity anywhere, there are also downsides to doing business here that must be considered, including:

Dependence on oil revenues
Small domestic market
Local ownership requirements for some types of entities
Difficulty accessing credit

International Expansion into Oman

When you decide to start doing business in Oman, you’ll find that there are many options available to help you enter this market or hire employees. Incorporation options and service providers you can choose from include:

Oman Employer of Record (EOR)

If you don’t own an entity and don’t want to incorporate one, you can instead engage an EOR or Employer of Record. This type of service provider also manages HR for your local employees but with a big difference. It hires them on your behalf so you can access the Omani labor market without having to set up a business in the country.

Learn more about EOR in Oman

Oman Professional Employer Organization (PEO)

If you have an entity in Oman, you might consider engaging a PEO or Professional Employment Organization to manage your local employees. PEOs take care of their HR needs like payroll and benefits admin and ensure compliance with local laws.

Branch Office / Representative Office Registration

If you already own a company that’s incorporated in another country, you can also choose to set up a branch in Oman. A branch office is allowed to operate under the legal liability of its parent and can be entirely owned by the parent. A resident director in Oman is not required.

It’s possible to set up a branch office of a company already registered in another country. The parent company is liable for all the losses and debts the branch incurs in its operations which are limited to those allowed for the parent. A branch needs to have one director of any nationality resident in Tunisia during the registration process.

Setting up a representative office is also possible. This kind of office is limited to only research and marketing activities and as such, pays no income tax. It can also be 100% owned by its parent company.

Subsidiary Incorporation

If you want to register your own entity in Oman, you’ll find that it can be very fast to do so, especially if you choose to incorporate an LLC. This can take as little as four days though you may have to open your business bank account in Oman in person. You can also set up a company in a Free Zone which provides you with lots of additional incentives and tax breaks. When you have your own entity incorporated, you can hire employees and trade within the Omani market.

Business Opportunities in Oman

Oman’s strategic location, stable economy, and government-driven economic diversification under Vision 2040 create a favorable environment for investment. Key sectors offer significant potential due to policy support, infrastructure development, and market demand.

Business Opportunity	Reason
Tourism and Hospitality	Government-backed initiatives, increasing tourist arrivals, and demand for luxury resorts, adventure tourism, and cultural experiences.
Logistics and Supply Chain	Strategic location near global trade routes, world-class ports, and major government investments in logistics infrastructure.
Renewable Energy	Abundant solar and wind resources, strong government incentives, and a shift towards sustainable energy projects.
Manufacturing	Tax benefits in Special Economic Zones (SEZs), access to regional markets, and growing industrial infrastructure.
Mining	Vast untapped mineral resources, rising global demand for metals, and government support for sector expansion.
IT and Tech Startups	Increasing digital transformation, government funding for innovation, and rising demand for technology-driven solutions.

Oman presents a wealth of opportunities for businesses looking to expand in a fast-developing market. With strong government backing and a commitment to economic diversification, investors in these key sectors can benefit from long-term growth and profitability.

Expand to Oman, with Remote People

Working with Remote People in Oman offers a strategic advantage by connecting your business with top local talent in a dynamic market. Our tailored recruitment and headhunting services ensure a seamless hiring process, enabling you to build a high-performing team that drives your organization’s success. With our expertise and commitment to quality, your business is well-positioned to thrive in Oman’s competitive landscape.

Ready to expand your team in Oman? Contact Remote People today to discuss how our recruitment services can help you find the perfect talent for your business.