Oman has become one of the most attractive destinations for foreign investors, thanks to its stable economy, business-friendly regulations, and strategic location connecting Asia, Africa, and the Middle East. As more entrepreneurs consider establishing a company in Oman, one of the most common questions is: Should you register your business in the mainland or in one of Oman’s freezones?
This comprehensive guide compares Oman mainland vs freezone investment to help you choose the best option for your company in 2025.
What Is Mainland Company Setup in Oman?
Definition and Legal Structure
A mainland company in Oman operates under the Ministry of Commerce, Industry and Investment Promotion (MOCIIP). Unlike freezone companies, mainland companies have the right to conduct business anywhere within Oman, including dealing directly with the local market.
Business Activities Allowed
Mainland licenses cover a wide range of activities such as:
- Trading & commercial activities
- Contracting & construction
- Retail and wholesale
- Professional and consultancy services
- Manufacturing and industrial operations
- Real estate and property management
License Types for Mainland
Popular mainland license categories include:
- Commercial license
- Industrial license
- Professional license
- Tourism license
What Is Freezone Company Setup in Oman?
How Freezone Companies Operate?
Freezones in Oman are special economic zones designed to encourage foreign investment through flexible regulations and tax benefits. Businesses registered in freezones generally operate outside the mainland and focus on international trade, logistics, manufacturing, and export-oriented activities.
Business Activities Allowed
Common freezone activities include:
- Import/export and re-export
- Logistics and warehousing
- Light and heavy industrial manufacturing
- Technology and IT services
- E-commerce
- International consulting services
100% Foreign Ownership Advantage
One of the biggest benefits is full foreign ownership without a local partner, making freezones ideal for entrepreneurs seeking total control of their business.
Mainland vs Freezone oman : Key Differences
Ownership and Shareholding
Freezones in Oman offer one of the most attractive advantages for foreign investors: 100% foreign ownership. This means you can register a company fully under your own name without requiring a local sponsor or partner. Full control over equity, management, and profits makes freezones especially appealing for international businesses looking for independence and flexibility.
On the mainland, the laws have become far more investor-friendly in recent years. Many business activities now allow up to 100% foreign ownership, giving expatriate investors more freedom than before. However, certain regulated activities may still require local involvement. In general, the mainland is more flexible than in the past, but freezones continue to offer the highest level of unrestricted ownership.
Taxation and Financial Benefits
Companies registered in Oman’s freezones benefit from significant long-term tax exemptions. These exemptions typically last 10 to 25 years, covering corporate tax and sometimes additional duties. This is a major financial advantage for businesses aiming for long-term profitability and reduced operating costs.
Mainland companies follow Oman’s standard corporate tax structure, but it is worth noting that Oman maintains competitive tax rates compared to many other countries in the region. While the mainland does not offer the same level of exemptions as freezones, the ability to trade freely within the local market often compensates for this difference.
Import/Export Rules
One of the strongest benefits of freezone registration is the ability to import and export goods duty-free. Companies can bring in raw materials, manufacture or package goods, and re-export them without paying customs duties. This significantly lowers operational costs and increases profit margins for businesses involved in international trade, logistics, and manufacturing.
Mainland companies, however, must follow standard Omani customs regulations and pay applicable duties on imported goods. Despite this, the customs process in Oman is efficient and investor-friendly, making mainland registration still viable for businesses serving the domestic market.
Office Space Requirements
For mainland companies, having a physical office or commercial space is mandatory. The size of the office often depends on the business activity and number of employees, which can influence initial setup and ongoing rental costs.
Freezones offer far more flexible options. Businesses can choose from flexi-desks, shared offices, private offices, or even warehouses and industrial units. This flexibility makes freezones extremely cost-effective, especially for startups, online businesses, or companies that do not require a large dedicated workspace.
Visa Quotas and Hiring
Freezones usually provide more flexible visa quotas, allowing companies to hire a larger number of foreign employees relative to their office space. This is particularly beneficial for industries needing specialized international talent.
In mainland Oman, visa quotas are determined by factors such as office size, business activity, and labor regulations. Some activities may have stricter limitations on foreign hiring, although this varies depending on the sector and market needs.
Cost Comparison
The overall cost of setting up and maintaining a company in a freezone is generally lower. Freezones often offer bundled packages for licensing, office space, utilities, and renewals, making them a cost-efficient option for SMEs and international startups.
Mainland companies may face higher setup and renewal costs, especially due to mandatory office rentals and potential additional regulatory fees. However, mainland businesses benefit from unrestricted access to Oman’s internal market, which can justify the higher costs depending on the business model.
Best Freezones in Oman for Investment
Sohar Freezone
Located near the UAE border with strong logistics facilities, ideal for industrial manufacturing, metals, and petrochemicals.
Duqm SEZ
One of the largest special economic zones in the Middle East; suitable for large-scale industries, energy projects, tourism, and logistics.
Salalah Freezone
Located near major shipping routes; perfect for heavy industries, plastics, and global logistics companies.
Knowledge Oasis Muscat (KOM)
Designed for IT, tech startups, e-commerce companies, and digital services.
Requirements for Setting Up a Mainland Company
Required Documents
To establish a mainland company in Oman, investors must provide the following essential documents:
- Passport copies for all shareholders and managers
- Business activity selection according to MOCIIP’s approved list
- Articles of Association (AoA) outlining ownership and management structure
- Office lease agreement confirming the company’s physical location
- Capital declaration based on the minimum required capital for the chosen activity
License Types
Mainland companies can apply for three primary license categories:
- Commercial License : for trading and commercial activities
- Industrial License : for manufacturing and industrial operations
- Professional License : for consulting, technical, and specialized services
Timeline & Steps
The mainland company setup process typically includes:
- Choose activity based on the intended business model
- Register in the Invest Easy portal and create your entity profile
- Submit required documents and complete application forms
- Obtain the Commercial Registration (CR) after approval
- Lease office space in compliance with local regulations
Apply for visas for investors, employees, and dependents
Requirements for Setting Up a Freezone Company
Required Documents
To establish a company in any of Oman’s freezones, investors must prepare a set of essential documents. These documents help freezone authorities verify the nature of the business, ownership structure, and compliance with regulations.
Required documents include:
- Passport copies of all shareholders and managers
Valid passports are needed to register the company and secure residency visas. - Detailed business plan
Outlines the company’s activities, target market, financial projections, and operational model—especially important for industrial and logistics activities. - Completed freezone application form
Each freezone provides a specific registration form that includes information about the company structure, license type, and intended operations. - Shareholder details and corporate documents (if applicable)
For corporate shareholders, additional documents such as a Certificate of Incorporation, Board Resolution, and Memorandum of Association may be required. - Proof of address or contact details
Ensures proper communication between the freezone authority and the investor.
License Types
Freezones in Oman offer several license categories designed to support different industries. Choosing the right license is essential because it defines the activities you are legally allowed to conduct.
Available license types include:
- Trading License
For businesses involved in import, export, re-export, distribution, and warehousing. - Industrial License
Suitable for manufacturing, assembly lines, packaging, processing, and other industrial operations. - Service License
Designed for consultancy, IT services, marketing agencies, e-commerce businesses, and professional services. - Logistics License
Ideal for freight companies, warehousing providers, shipping services, cargo handlers, and supply chain solutions.
Timeline & Steps
Setting up a freezone company in Oman is usually faster and simpler compared to mainland registration. The process is streamlined, with minimal paperwork and efficient government procedures.
The step-by-step timeline typically includes:
- Submit the initial application
Provide your proposed business name, activity, and basic shareholder information to the freezone authority. - Receive initial approval
The freezone reviews the application and issues a preliminary approval letter confirming eligibility. - Sign lease agreement or select flexi-desk package
Depending on your business needs, you can choose between a flexi-desk (most affordable option), private office, warehouse, or industrial land. - Obtain the business license
Once the lease contract is finalized and documents are verified, the freezone issues the official business license. - Open a corporate bank account
With the license and company documents, you can register a corporate account with any Omani bank. - Apply for residency visas
The company can now issue investor visas, employee visas, and dependents’ visas based on the office space and license type.
Mainland vs Freezone: Comparison Table
Feature | Mainland Company | Freezone Company |
Ownership | Up to 100% | 100% |
Tax Benefits | Standard tax | Tax-free (10–25 yrs) |
Local Market Access | Full | Limited |
Office Requirements | Mandatory | Optional/Flexi desk |
Cost | Medium – High | Low – Medium |
Visa Quota | Based on office size | Flexible |
Customs | Standard duty | Duty-free |
Best For | Local businesses | Export & logistics |
Conclusion: Which Is Better, Mainland or Freezone?
Choosing between Oman mainland vs freezone depends entirely on your business model.
- If you want to operate directly within Oman, trade locally, or provide services to residents, a mainland company is the best choice.
- If your business is focused on international trade, logistics, export, manufacturing, or online operations, a freezone company is more cost-effective and flexible.
Both options offer excellent opportunities, but selecting the right one will determine your long-term success in Oman’s growing economy.
