By: Noor Al Khonji 


There are several types of commercial company forms that can be registered in the Sultanate of Oman, namely a Limited Liability Company, Joint Stock Company, General Partnership, Limited Partnership, Joint Venture, Holding/Subsidiary Company and a One-Person Company (the most recent introduced back in 2019).

In this article, we provide a general overview of Limited Liability Companies (LLCs) and Joint Stock Companies (JSCs), and their relative benefits and drawbacks. Whilst we will explore the specific requirements to form these company types, all businesses must ensure compliance with any legal and regulatory requirements, including tax registration, labour laws, and any industry-specific regulations.

A:  Limited Liability Company

Primarily, an LLC requires between 2 and 50 shareholders as a foundational requirement. Once this shareholder threshold is met, a pivotal step involves the careful selection of a trading name for the LLC.

The chosen company name must not be misleading in relation to the company's objectives, identity, or the identities of its shareholders. The LLC will be established under a Constitutive Document, to be signed by all shareholders. This document should include information about the company’s objectives, shareholders, share capital, and any other aspects that will govern the company’s operations.

B:  Joint Stock Company

There are two types of Joint Stock Companies – closed and public. 

In a Closed Joint Stock Company, the capital investment is shared only between the shareholders of the company, whereas in a Public Joint Stock Company, the shares can be traded on the stock exchange. Both types of Joint Stock Companies share numerous formation requirements in common, such as requiring at least three natural or juristic persons to set the company up. From amongst themselves, the founders must then appoint a constitutive committee consisting of at least 3 members, entrusted to carry out the establishment procedures. In both cases, the company name should not be a person’s name, nor a name misleading as to its objectives, its identity, or the identity of its members. Both types of company will be established under a Constitutive Document, including information about the board of directors, company objectives, share capital, and any other aspects that will govern the company’s operations.

  •  Closed Joint Stock Company

Following from the above, the suffix “SAOC” should follow the name of the Closed Joint Stock Company. The issued share capital must not be less than 500,000 Omani Rials when forming the company. 

  •  Public Joint Stock Company

In a Public Joint Stock Company, the company name should be followed by the suffix “SAOG”. In this case, the issued share capital must not be less than 2,000,000 Omani Rials.

C:  LLC or JSC?

LLCs and JSCs in Oman provide flexibility, especially because they both accommodate for 100% foreign ownership in most sectors. Moreover, the liability of shareholders in LLCs is only limited to their capital contribution, shielding them from excessive personal risk – personal assets will remain separate from company debt. There is also no minimum capital requirement for LLCs in Oman – providing further flexibility to shareholders. On the other hand, Public Joint Stock Companies offer access to public markets and the potential for larger-scale capital generation. There is flexibility with selling and purchasing shares in a JSC, yet the stringent regulatory requirements can pose challenges; JSCs may encounter intensified scrutiny from regulatory bodies, investors, and the public, necessitating disclosure of financial details and strategic information. This requirement, while enhancing transparency, potentially undermines competitive advantages reliant on sensitive data confidentiality. Another factor of JSCs is that there is a higher chance of disagreement due to having a potentially much higher number of shareholders, which could impact the operations of the company and its reputation.

Please contact Bait Al Qanoon if you need support on the establishment of your business operations in Oman.