Company Formation in Sohar Port and Free Zone
The Port and the Free Zone
Located on the northern coast of Oman, Sohar is a city with quite a colorful past. It is quite an old and famous city, steeped in history. The city is the largest within the northern areas of the country. It has a population of over 220,000 which is the fifth highest in Oman. The town has a history of acting as a port for the country, and the reason for this is due to its optimal location. It serves as a modern day gateway between east and west. Today, it is home to a deep sea port, which allows for it accommodate the largest of ships possible, and this has pushed it forward as one of the fastest growing free zones in the world.
Beyond the top of the range port that is present within the free zone, there are a few further draws to this free zone, and some examples of these include:
- 100% foreign ownership;
- Exemption from corporate tax for at least ten years. This period can be extended to a maximum of 25 years or the duration of the lease should the company meet specific Omanisation targets;
- The ‘one stop shop’. It is easily accessible for any party who wishes to obtain licenses, approvals, permits etc. to do so from a single entity, rather than having to interact with multiple different government bodies;
- The capital requirements are reasonably low and encourage business start-ups;
- Omanisation works as following concerning the corporate tax exemptions. There is an escalation system in place as follows:
- The minimum level of Omanisation is 15%;
- 25% Omanisation after ten years;
- 35% after 15 years; and finally;
- 50% after 20 years and this is up until the final potential tax-free year (year 25);
The port was initially established in 2002, while the free zone arose after this in 2010. Subsequently, the free zone has rich experience for any who may be unsure of whether it is an optimal location in which to grow a business.
The Possibilities within Sohar Port and Free Zone
The free zone is located in Liwa and is of course on the coast. Its location is surprisingly close to some significant places. It is within around 3 hours of Muscat, but more interestingly, it is quite near and well connected to the UAE and cities such as Dubai. Being located as such is a significant advantage, as while the port and location are well known, the UAE is still more notable as a business location. Also, there are direct highway connections to Saudi Arabia, which is a considerable economy in the region; this will give confidence to those who are considering Sohar port and free zone.
There are a few different license types that are obtainable within this free zone. To be specific, these are the four types available:
- Industrial License
- Light Manufacturing and Assembly License
- Logistics License
- General Trade License
These licenses allow for the performances of these activities and must are renewable annually. Third party service providers can also obtain a Service Provider license, though the services that they can provide are specified. On top of this, the registration of these service providers is free of charge.
Further to this, there are also permits which are obtainable, and the process is one which is transparent and relatively simple. The permits are as follows:
- Plot Work permit: allowing the Working Company to execute civil works inside their plot. All relevant regulations on plot development and the application process for the Plot Work permit are in the Development Control Regulations;
- Common Area Work permit: allowing the Working Company to execute works outside the plot, inside the common areas (for example laying a pipeline or cable);
- Special Transport permit: All businesses will require an Environmental Permit. The type of permit that they will need to get will depend on type, scale, and complexity of their projects or work. The permits are as follows:
- No environmental impact – In this case, no application will require filling out, and approval should occur within three working days.
- Limited environmental impact – Required to submit environmental review form. Approval may take up to 30 days.
- Environmental Impact – Must submit environmental impact assessment. The approval time may take up to 90 days.
The level of environmental impact will is provided to the company during the assessment period, and so entities should be prepared to provide the required review or assessment to ensure the process is as smooth and concise as possible.
The free zone has its own rules and regulations (Sohar Free Zone Rules and Regulations), which are distinguishable from the mainland laws. The free zone is located in Liwa and is of course on the coast. Its location is surprisingly close to some significant places. It is within around 3 hours of Muscat, but more interestingly, it is quite near and well connected to the UAE and cities such as Dubai. Being located as such is a significant advantage, as while the port and location are well known, the UAE is still more notable as a business location. Also, there are direct highway connections to Saudi Arabia, which is a considerable economy in the region; this will give confidence to those who are considering Sohar port and free zone. Get in touch with our team of lawyers in Dubai to learn more on company formation in Oman.
A Unique and Promising Prospect
In general, Sohar Port and Free Zone is a highly well-developed free zone which is growing at a rapid rate, with large amounts of fixed investment. With the highly beneficial advantages of a world-class deep sea port, relatively close proximity to business centers such as Saudi Arabia and the UAE as well as the easy to use free zone facilities including the one stop shop and more, this free zone presents prime opportunities for businesses to establish themselves on a regional or global scale.