OMAN Law and Practice Contributed by: Said Al-Shahry, Thamer Al-Shahry, Jeremy Pooley, Maria Mariam Rabeaa Petrou, Mujtaba Ali Kazmi and Salim Al Harthi, Said Al Shahry & Partners
ent with the nature of an SPC. SPCs were introduced for the first time under the CCL 2019, and are likely to be a popular alternative to LLCs going forward. CJVs A CJV is formed (typically pursuant to a written joint venture contract) by two or more partners. It is described in the CCL 2019 as a “concealed compa - ny,” and is the only legal entity in Oman that is not subject to registration with the MOCIIP. CJVs are not subject to any minimum share capital requirement. A CJV does not have a separate legal personality. Each of its partners therefore contracts only in its own name and has unlimited liability for the obligations and liabilities it assumes under that contract. If a CJV partner discloses the existence of the CJV to a third party who deals with that partner in the context of the CJV’s activities, then the CJV will become a general partnership. This will result in all of the CJV’s partners assuming unlimited liability for the liabilities and obligations of the CJV. Investors tend to favour LLCs over CJVs because of the limited liability that LLCs confer. CJVs can, how - ever, offer a quick route into the market and are sub - ject to considerably less onerous regulation under the CCL 2019 than LLCs. Historically, foreign investors have sometimes adopted the CJV structure where they have a single contract to perform (eg, as a con - tractor on a project) and do not intend to remain in Oman following its completion. As a consequence of the liberalisation of Oman’s foreign ownership restric - tions, however, some contractors that would previ - ously have adopted the CJV structure may view an LLC as a more attractive option in the future. GPs and LPs A GP is formed of two or more general partners, each of whom must be a natural person. The partners of a GP are jointly and severally liable for the GP’s liabilities and obligations. An LP is formed of at least one general partner and at least one limited partner. The general partners of an LP are jointly and severally liable for the LP’s liabilities
and obligations, whereas the liability of a limited part - ner in an LP is limited to the amount of its contribution. GPs and LPs have constitutive contracts that regu - late their management and operation. Subject to its constitutive documents, all partners of a GP and all general partners of an LP are considered managers of the GP/LP. The limited partners of an LP may not be involved in its management. Neither GPs nor LPs are subject to a minimum capital - isation requirement, and neither structure has a legal reserve requirement. However, the unlimited liability of general partners means that GPs and LPs rarely attract investors when structuring their investments. Branches Previously, branch structures could only be estab - lished where a foreign company entered into a “quali - fying contract” with the Omani government or a com - pany in which the Omani government has a material interest. The CCL’s executive regulations issued by the MOCIIP on 14 October 2021 override this require - ment, and a “qualifying contract” with a government entity is no longer one of the prerequisites to estab - lishing a branch in Oman. Representative Offices The permitted activities of a representative office are limited to the following: • contacting customers to promote the products or services of the foreign company or institution it represents; • contacting exporters and sellers of raw, manufac - tured and semi-manufactured materials required by the foreign company or institution it represents and removing any obstacles hindering quick access to them; and • notifying the foreign company or institution it repre - sents of any complaints it receives in relation to the products or services and overcoming difficulties related to the distribution of such products or the provision of services. A representative office is prohibited from engaging in any of the following activities:
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