OMAN Law and Practice Contributed by: Ahmed Said Al Jahwari, Idil I. Kaner and Al Muhalab Al Issai, Dr. Ahmed Said Al Jahwari & Partner Law Firm
Registration Requirements • Real estate is commonly secured by a legal mort - gage over freehold or leasehold interests and must be registered with the Ministry of Housing and Urban Planning. • Commercial enterprises and business assets are typically secured by a commercial mortgage registered with the Ministry of Commerce, Industry and Investment Promotion. Such registrations are generally valid for five years and must be renewed to maintain priority. • Shares (in SAOGs (public joint stock companies) or SAOCs (closed joint stock companies) are usu - ally secured by way of a share pledge. For Muscat Stock Exchange–listed securities, pledges are registered through Muscat Clearing and Depository systems using prescribed forms and procedures. • Receivables and contractual rights are commonly secured by assignment or pledge, often requir - ing notice to counterparties and careful drafting to ensure enforceability. • Bank accounts are typically secured by an account pledge and/or assignment of rights, usually sup - ported by bank acknowledgements or control-style arrangements. • Movables, equipment, and inventory have histori - cally been secured through possessory pledge concepts, although practical enforceability depends on the nature of the asset and possession arrangements. Perfection Perfection generally requires execution of security documents before designated officials, completion of prescribed registration forms, and payment of appli - cable government fees. Failure to perfect security may result in invalidity or unenforceability against third par - ties and loss of priority. Indicative Timing and Costs In practice, share pledges and registered mortgages are typically completed at closing or immediately post- closing, often within days to a few weeks depending on the relevant authority. Notices and acknowledge - ments for receivables and bank accounts are often completed post-closing but must be in place before reliance for priority or enforcement purposes.
to non-residents without a permanent establishment in Oman; however, this may not apply where a dou - ble tax treaty exists between Oman and the investor’s country of residence. A recent Royal Directive pro - vides for an indefinite suspension of WHT on interest for foreign investors. Private credit providers typically address WHT concerns by including gross-up provi - sions in their agreements. 4.2 Other Taxes, Duties, Charges or Tax Considerations Private credit lenders making loans to, or taking secu - rity and guarantees from, Omani entities may need to consider value added tax (VAT). The VAT treatment depends on whether the transaction is classified as an exempt financial service or a taxable supply under Omani VAT regulations. In addition, the creation, reg - istration, and perfection of security interests and guar - antees attract government and registration fees. 4.3 Tax Concerns for Foreign Lenders See 4.1 Withholding Tax for information on WHT. Depending on the nature of the activity and the extent of a foreign private credit provider’s involvement in the Omani market, the provider may be deemed to have a permanent establishment in Oman, potentially trig - gering additional tax liabilities. These concerns may be mitigated through appropriate structuring, includ - ing the establishment of a collective investment fund or financial trust licensed by the Financial Services Authority. Collective investment funds offered for pub - lic subscription and financial trusts are exempt from income tax in Oman.
5. Guarantees and Security 5.1 Assets and Forms of Security
Assets typically available as collateral to private credit providers in Oman include real estate, business assets, shares, receivables and contractual rights, bank accounts, and movables/equipment/inventory. The form of security and perfection requirements vary by asset type, and failure to comply with applicable formalities can materially weaken enforceability and priority, particularly against third parties or in insol - vency.
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