Company Formation in Oman’s Free Zones After Royal Decree 38/2025 – What You Need to Know

Oman’s business landscape has just entered a new chapter. With the Royal Decree 38/2025, the Sultanate is reshaping how investors set up and operate companies — especially within its dynamic free zones. From Duqm to Sohar and Salalah, these zones are rapidly becoming regional hubs for innovation, logistics, and industrial growth.

For entrepreneurs and global investors, this change isn’t just a legal update — it’s a golden opportunity. Whether you’re a startup founder or a multinational expanding into the Gulf, understanding how free zone company formation works under the new decree can make all the difference between compliance and competitive advantage.

Understanding Royal Decree 38/2025: What Changed?

The Royal Decree 38/2025 modernizes Oman’s commercial regulations to align with Vision 2040 — the nation’s blueprint for economic diversification and sustainable growth.

Under this decree:

Company registration procedures have been simplified, allowing faster incorporation.
Foreign ownership rules have been relaxed, enabling 100% foreign investment in many free zone sectors.
Tax and licensing incentives are more clearly defined to attract international businesses.
Enhanced digital registration platforms have been introduced to streamline documentation and reduce approval times.

This marks a decisive shift towards a digital-first, investor-friendly environment, positioning Oman as one of the most competitive destinations for business setup in the GCC.

Why Choose Oman’s Free Zones for Business Setup

Oman’s free zones — particularly Sohar Free Zone, Salalah Free Zone, and Duqm Special Economic Zone — have become magnets for foreign investors due to their strategic location, infrastructure, and tax incentives.

Here’s why they stand out:

100% Foreign Ownership – Unlike mainland entities, free zone companies can be fully owned by foreign investors.
Tax Holidays – Enjoy corporate tax exemptions for up to 25 years.
Customs Duty Exemption – Imports and exports within the free zone are duty-free.
Full Repatriation of Profits – Investors can transfer earnings and capital without restrictions.
Simplified Licensing & Permits – One-stop portals now handle all documentation through the new decree’s digital reforms.

In short, free zone company formation in Oman gives you all the benefits of operating in a thriving economy — without the bureaucratic red tape.

Types of Companies You Can Form in Oman’s Free Zones

After Royal Decree 38/2025, investors have more flexibility in choosing the right structure for their business. The main options include:

Free Zone Limited Liability Company (FZ-LLC): Ideal for SMEs and foreign-owned entities.
Branch of a Foreign Company: Perfect for international firms expanding operations.
Free Zone Establishment (FZE): Suitable for single shareholders seeking streamlined control.

Professional company formation agents in Oman can guide you in selecting the structure that aligns best with your business model, risk appetite, and operational goals.

Step-by-Step Guide to Free Zone Company Formation

Setting up your company in a free zone under the new decree involves a more efficient and transparent process. Here’s how it typically works:

Choose Your Free Zone: Select between Sohar, Salalah, or Duqm based on your industry.
Define Your Business Activity: From logistics to tech, specify your trade or service type.
Reserve Your Company Name: Check availability through the Ministry of Commerce, Industry and Investment Promotion (MOCIIP) portal.
Submit Documentation: Upload incorporation forms, shareholder details, and identification.
Obtain Approvals: Free zone authorities now process applications digitally.
Receive License and Lease Agreement: Once approved, you’ll get your business license and workspace allocation.
Commence Operations: Open your bank account, hire staff, and begin trading.

With the new reforms, the timeline for company formation in Oman has been reduced significantly — in many cases, businesses can be up and running within a few working days.

The Role of Professional Company Formation Agents

Partnering with company formation agents in Oman ensures a smooth, compliant, and timely setup. These experts:

Handle all documentation and government approvals.
Advise on tax implications and ownership structures.
Assist in opening bank accounts and obtaining commercial licenses.
Provide LLC company formation services in Oman tailored to your sector.

Their expertise becomes especially valuable under the updated decree, where digital registration systems require precise documentation uploads and verification steps.

How Al Mawaleh Helps Businesses Simplify VAT Registration and Compliance

At Al Mawaleh, we specialize in helping businesses across Oman handle their VAT registration and compliance with ease. Our experts guide clients through every step—from preparing documents to submitting applications—ensuring accuracy and compliance with the Oman Tax Authority’s requirements.

We also provide ongoing VAT advisory, accounting, and audit services, enabling your business to remain compliant long after registration. Whether you’re a startup or a well-established enterprise, our professionals ensure your business stays ahead of regulatory updates and financial best practices.

Cost of Company Formation in Oman: What to Expect

The cost of company formation in Oman varies depending on your business activity, free zone location, and company type. On average:

Registration fees range from OMR 1,500 to OMR 3,000.
Office lease costs differ by zone and facility type.
License renewals typically fall between OMR 500 and OMR 1,000 annually.

However, the Royal Decree 38/2025 introduced new incentives, including reduced startup fees for tech, green energy, and logistics firms. Many limited or LTD company formations now qualify for partial fee waivers, especially in export-oriented sectors.

Free Zone vs Mainland: Which Is Right for You?

Choosing between a free zone company formation and a mainland setup depends on your business goals:

Criteria	Free Zone	Mainland
Ownership	100% Foreign Ownership	Local partner may be required
Tax Benefits	Tax holidays up to 25 years	Corporate tax applies
Business Scope	Restricted within the zone	Operate anywhere in Oman
Setup Speed	Faster (Digital Process)	Moderate
Ideal For	Exporters, tech firms, logistics companies	Local retail, service providers

Most startups and international investors prefer free zone setups due to flexibility, scalability, and fewer operational constraints.

How Al Mawaleh Helps Streamline the Process

At Al Mawaleh, we specialize in helping investors and entrepreneurs navigate Oman’s evolving business environment. From LLC company formation services to document submission and compliance, our consultants ensure every step is efficient, transparent, and fully aligned with the Royal Decree 38/2025 updates.

We also provide ongoing advisory support, helping businesses stay compliant with Oman’s corporate, tax, and labor regulations — so you can focus on growth while we handle the details.

Conclusion: The Future of Business Setup in Oman Is Here

Oman’s Royal Decree 38/2025 marks a turning point for the nation’s investment climate. With simplified regulations, digital transformation, and enhanced investor rights, free zone company formation has never been more accessible or rewarding.

Whether you’re planning a limited company formation in Oman, exploring LLC services, or evaluating the cost of company formation, now is the ideal time to start.

With expert guidance from Al Mawaleh, setting up your business in Oman’s free zones becomes not just a legal procedure — but a strategic step toward long-term success in one of the GCC’s most promising markets..

📞 Contact Al Mawaleh today at +968 7733 8545

🌐 Visit: https://mawaleh.com