UAE and Oman: where is the best place to start a business

Oman and the United Arab Emirates are two attractive countries for doing business in the Middle East. However, despite their geographical proximity, they offer significantly different conditions for entrepreneurs. When choosing between them, you need to consider the specifics of your company, long-term goals, and investor priorities.

1. Tax system

There is no personal income tax in the Emirates, VAT is only 5%, and corporate tax is 9%. Among other things, the country stands out for its many options for optimizing the tax burden and the existence of incentives and government support for various categories of business. All this makes the country an extremely promising place for entrepreneurs, especially international companies.

The situation in Oman is somewhat different. Although there is no income tax for certain sectors, in other industries it can reach 15% with a value-added tax of 5%.

2. Free zones

Both Oman and the UAE are renowned for their developed free economic zone systems, which offer a number of advantages, such as simplified registration procedures, preferential tax rates, and 100% foreign ownership of companies. However, FEZs in the Emirates offer a wider range of specialized services focused on specific industries, making them more attractive to many investors. Omani FEZs are in the process of active development and cannot yet offer the same level of infrastructure and service.

3. Licensing

The licensing procedure in the UAE, especially in free zones, is as simple and transparent as possible. Obtaining the necessary permits takes a relatively short time. Often, a company can be registered online in 3-4 days. Entrepreneurs have access to a wide range of available activities. In Oman, the process can be more bureaucratic and time-consuming, although the government is making efforts to simplify it. It is also common practice to pay for a license for three years at once, which significantly increases start-up costs.

4. Visa options

The Emirates offer a relatively simple visa application process for foreigners: all you need to do is undergo a medical examination and biometric procedure. In addition to visas for company founders, visas are available for family members, students, freelancers, investors, retirees, and others.

In Oman, visa requirements are somewhat stricter, and the visa application process takes longer. Among the grounds for legalization, the most popular is the purchase of real estate worth $650,000 or more (in the UAE, $205,000 or more).

5. Office rental

In the UAE, renting office space can be relatively expensive. However, in most cases, a physical office is not necessary; a virtual office is sufficient for obtaining a legal address.

In Oman, office real estate prices are generally lower. However, the level of infrastructure and convenience of location may suffer. A lease agreement for a physical office is required to register a business.

6. Authorized capital

Requirements for this vary from country to country depending on the type of company and jurisdiction. In most cases, in the UAE, it is only necessary to specify the amount of capital on paper; actual payment is not required, unlike in Oman, where this is also a mandatory condition.

When choosing between Oman and the UAE, it is important for entrepreneurs to pay attention to all of the above features and “try them on” for their type of business. The Emirates offer a more developed infrastructure, simplified procedures, and an attractive tax system. All of this is especially important for international companies, technology startups, companies in the tourism and financial services sectors. Oman, on the other hand, may be a more attractive option for businesses seeking lower operating costs and looking to invest in a less competitive environment. Analyzing all factors together with lawyers specializing in the Middle East market will help you make the final decision for a successful international business start-up in one of the countries.