Posted by: amj_admin on April 22, 2018 - 10:39 am

Developing a robust debt capital market to sustain long-term economic growth has been high on Oman’s policy agenda for some years. This policy is beginning to pay dividends with the value of the bonds and sukuk segment of the Muscat Securities Market (MSM) growing by 32% to OMR2.63 billion during the period 2016 to 2017. This represents about 15% of the MSM’s total market capitalisation and an average annual increase of 46% over the last five years.

In a keynote address to the Oman Debt Capital Market Conference held in Muscat on April 18, the head of Oman’s Capital Market Authority (CMA), Sheikh Abdullah Al Salmi, attributed the strong growth to CMA measures to promote debt capital market instruments as an alternative funding mechanism for both government and private sector in addition to stimulating FDI. CMA measures include focusing on key areas of market infrastructure, regulation and product innovation in both the conventional and Islamic segments.

The day-long conference organised by the Gulf Bond and Sukuk Association (GBSA) in partnership with Al Busaidy Mansoor Jamal & Co (AMJ), and Maisarah, Bank Dhofar’s Islamic banking window, assembled industry players, legal experts and stakeholders to discuss the development of both conventional and Islamic debt markets. A panel moderated by AMJ’s Islamic finance specialist, Asad Qayyum, identified the introduction of more diverse and complex instruments and structured products as a key factor to driving development and promoting financial stability.

As at June 2018, the value of bonds and sukuks on the MSM has risen to OMR2.85 billion.

Posted by: amj_admin on April 13, 2018 - 10:36 am

Posted by: amj_admin on February 4, 2018 - 9:14 am

AMJ, in partnership with the Oman American Business Centre (OABC), organised a seminar on corporate law and finance for SMEs in Oman.

Presented by AMJ senior associate Asad Qayyum, and entitled ‘Survive to Five: Navigating Financial and Legal Aspects for Companies in Oman’, the seminar was designed to help start-ups and companies in the early stages of development. It highlighted a number of common pitfalls faced by entrepreneurs regardless of the sector in which they operate.

Qayyum noted that “Setting up and running a business can be very exciting and rewarding. However, no how brilliant the business idea is, without a solid legal and financial foundation, entrepreneurs run the risk of becoming one of the ‘4 out of five’ startups that statistically fail in the first five years.”

He provided participants with insights on the legal and financial frameworks essential for success, incentives and concessions available in Oman for SMEs, advice on tax and finance, employment, intellectual property protection and the all-important role of networking organisations such as the OABC.

Posted by: amj_admin on March 17, 2017 - 9:55 am

Amendments to Oman’s corporate tax law have wide-ranging implications for companies doing business in Oman as well as foreign investors including those without a permanent establishment in the country. The reforms have been in the pipeline since they were presented to the Cabinet in January 2016. They are part of a package of fiscal measures announced in February 2017 aimed at diversifying revenue resources to offset Oman’s higher than forecast budgetary deficit for 2016 due to depressed oil prices.

The new rules introduced by Royal Decree 9/2017 and published in the Official Gazette on 26 February 2017, represent a radical overhaul of the previous tax regime under Royal Decree 28/2009. Changes include:

– removing the tax-free threshold of OMR 30,000 previously available to establishments, companies or foreign persons deemed to have a permanent establishment carrying on business in Oman;

– raising the corporate tax rate from 12 percent to 15 percent effective for all financial years beginning on or after 1 January 2017. A lower 3 percent micro tax rate is applicable to small tax payers who meet specific criteria;

– expanding the withholding tax net by imposing a 10 percent tax on dividends on shares and interests from 28 February 2017;

– extending the definition of ‘income’ to include fees for services paid to foreign persons who are based outside Oman. Whereas the amendments to the withholding tax provisions came into force on 28 February 2017, the amended definition of ‘income’ comes into effect only on 1 January 2018. It remains to be clarified whether withholding tax deductions on service fees payable to foreign persons take effect now or on 1 January 2018;

– applying withholding tax provisions to ministries and government bodies and other state administrative units; tax payers are required to deduct the withholding tax at source and remit to the government within 14 days of the month-end in which the fees are paid or credited to the account of the tax payer.

– introducing a requirement for all tax payers to obtain a tax card from the Department of Taxation of the Ministry of Finance. The tax card number must appear on all of the tax payer’s contracts, invoices and correspondence. Ministries, state administrative units and companies in which the Government has a 40 percent shareholding must obtain a copy of the tax card before undertaking any transaction with the tax payer; and

– removing tax exemptions previously available for a period of 10 years on income arising from operating hotels and tourism projects, agriculture, mining, export of local goods, fishing, health care and education. Only the manufacturing sector is now exempted from tax for a reduced period of up to 5 years.

In addition to the above, the tax regime has now moved on to a self-assessment regime with rules for increased fines and prison terms for officers of taxable entities for failure to comply with the provisions of the law.

For more information contact Mansoor Malik or Asad Qayyum

Posted by: amj_admin on September 27, 2016 - 10:08 am

Oman’s Minister of Commerce and Industry has issued a decision changing the rules for registration of new companies and enterprises other than joint stock companies (MD139/2016). The new rules allow entrepreneurs setting up business in Oman an extended period of up to four months after the close of the company’s first financial year to produce evidence to the Ministry of Commerce and Industry (MOCI)of the share capital in the company instead of at the time of registration as was previously the case.

This decision relaxes the requirement in Oman’s Commercial Companies law that a temporary ‘company under formation’ bank account be opened before the company is registered and comes into existence as an independent legal entity. Founding shareholders of a new company were required to produce a bank certificate confirming that they had deposited their respective shares in a ‘company under formation’ account before the company could be registered at MOCI. The new rule streamlines business set-up procedures enabling entrepreneurs to register a company first and then open a fully-fledged bank account in the company’s name. It will also avoid the bureaucratic and time-consuming process for shareholders to get their capital back out of the ‘under formation’ account in the event that company formation does not proceed for any reason.

The decision is an indisputably welcome move to ease the rules for doing business in Oman for both Omani entrepreneurs and foreign investors. However it gives rise to several uncertainties arising from the temporary nature of the registration in the interval between issue of the company registration certificate and production of the bank certificate to MOCI. From an operational viewpoint, the company would be unable technically to enter into contracts for what might be an extended period prior to full registration at MOCI. It is critical for third parties contemplating an arrangement with a new company to conduct sufficient due diligence on its ability to enter into contracts. In this connection, it is important to note that the decision, which takes effect as an internal ministerial order until officially gazetted, does not specify how MOCI will deal with any company which does not produce the bank certificate within the set time frame.

For further advice on how to address these legal uncertainties and on company formation law and procedure in general, contact Mansoor Malik.

Posted by: amj_admin on July 25, 2016 - 10:12 am

AMJ recently partnered the Oman Economic Review, a leading business publication, in staging a major business summit in Muscat on the theme of ‘The Diversification Imperative’. The event assembled 300 industry leaders and decision makers to discuss the opportunities and challenges in diversifying the Sultanate’s economy and to lay down a roadmap for the future.

The Summit comprised a number of key note addresses and panel discussions moderated by Nima Abu-Wardeh, former presenter of BBC World News, Middle East Business Report.

For more information, contact Bernadette Bhacker-Millard

Posted by: amj_admin on December 7, 2015 - 10:10 am

AMJ has been appointed together with Ernst & Young and Squire Patton Boggs in a consortium to advise the Omani government in setting up a public private partnership (PPP) unit, developing a regulatory framework and exploring options for PPP procurement.The consortium is tasked with exploring a range of PPP models and developing a first draft of a PPP framework by the first quarter of 2016.

Oman’s past experience in unbundling and privatising its electricity market over the past decade as well as a successful track record in procuring independent power and water producer (IWPP) projects using a PPP approach will stand it in good stead as it seeks to attract private sector funding and expertise for sectors other than power and water.

Commenting on the appointment, AMJ managing partner, Mansoor Malik, said: “While a PPP framework is a natural progression of Oman’s privatisation successes in the utilities sector over the past two decades, the process has gained extra momentum due to continuing depressed oil prices. We are privileged to assist the government in developing a robust legal PPP framework to enable it to push ahead with strategic infrastructure projects under Oman’s new five-year development plan and to meet the challenges of the current fiscal climate.”

Posted by: amj_admin on July 2, 2014 - 10:50 am

Oman’s ruler, Sultan Qaboos bin Said, has put on hold the government’s decision to scrap price controls after the new rules caused an unusual public backlash on social media and triggered an intervention by the Majlis Ash’shura, the elected lower chamber of the Council of Oman, the country’s bicameral parliament.

Under rules dating back to 2011 in the wake of the street protests when inflation was a major concern, retailers and traders needed to seek the approval of the Public Authority for Consumer Protection (PACP) to raise the prices of all goods. The authorities have acknowledged for some time that these controls are not compatible with a free-market economy and sought to deregulate prices on all but twenty three staple items such as rice, cooking oil, sugar, powdered milk and fresh and other dairy products.

The lifting of price controls announced by PACP in mid-June had been sanctioned by the Council of Ministers during their deliberations on a new consumer protection law back in March. However, in late June the Majlis Ash’shura unanimously rejected the controversial decision and successfully appealed to Sultan Qaboos to postpone its adoption until new competition and anti-monopoly legislation is in place to protect consumers. The Sultan’s decision puts pressure on the Council of Oman to speed up its deliberations on the draft laws in question, the revised Commercial Agencies Law and the new Competition and Anti-Monopoly Law. The third law on consumer protection was forwarded to the sultan in late May following an unusual joint session of the Majlis Ash’shura and the appointed upper house, Majlis al‑Dawla (State Council) aimed at resolving the councils’ differences on the draft law. The session discussed eleven articles, agreeing on seven and voting on a further four.

These episodes illustrate the challenges facing Oman in balancing the competing demands of stakeholders when introducing key market reforms. They also mark the growing confidence and role of the Majlis Ash’shura in the legislative process as well as the success of Oman’s constitutional framework for achieving consensus in the event of disagreement within the Council of Oman.

Posted by: amj_admin on May 29, 2013 - 11:15 am

The long-debated adjustment change to the working week in Oman became effective on May 1, 2013 when the country adopted Friday and Saturday as the official weekend for both public and private sectors. The change is expected to boost the Omani economy by aligning government and business with the regional work week and with Oman’s banking sector which has operated a Friday/Saturday weekend since July 2008. Oman also stands to benefit from the closer alignment with international trade norms, in particular for the import-export industry, ports, free trade zones and tourism sector.

Policy makers were keen for broader socio-political reasons to eliminate the discrepancy between public and private sector working conditions as the government seeks to Omanise the private sector, reduce dependency on expatriate labour and to diversify the country’s economy.