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Mercans CountryIntel ® Oman Payroll And HR Insights

Mercans offers complete payroll, PEO and HR services in Oman

An Arab country in the southeast coast of the Arab Peninsula and the second-largest state in the GCC (Gulf Cooperation Council), Oman boasts political and economic stability which makes it attractive for local and foreign investment. Inclusion is a key aspect of all national development efforts to ensure equal opportunities for all. In its effort to encourage business and attract foreign investment, Oman’s policies include reducing dependence on oil and diversifying national income sources.

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Doing Business in Oman

Advantages to investing in Oman include a stable, transferable local currency, no personal income tax, low customs rates of taxation on many imported products, free trade agreements with various trading blocks and countries as well as special laws on protecting rights for foreign investment.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Oman is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banking Hours: Monday - Thursday from 8:00 am - 6:00 pm

Working Week

The standard working week is from Monday to Friday from 9:00 am - 5:00 pm

Labor Law

The Directorate-General of Labor Welfare and the Directorate-General of Employment were established to achieve the principles and policies of the Ministry of Labor. Labor law in Oman applies to all Omani or expatriate employers and employees, public and private establishments and organizations (including subsidiaries) in Oman. Labor law regulates the employment of all workers in the private sector except for domestic servants.

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Main Industries

Crude oil production and refining, natural and liquefied natural gas (LNG) production, construction, cement, copper, steel, chemicals, optic fiber

GDP Growth

6.30%

Dates & Numbers

dd/mm/yyyy

Official State Name

Sultanate of Oman

Population

5.107 million

Capital

Muscat

Major Languages

Arabic

Currency

Omani Rial (OMR)

Internet Domain

.om

International Dialing Code

+968

Oman
Muscat, OM
12:58 pm, December 2, 2022
27°C
clear sky

Payroll

The minimum wage for Omani job seekers, which was linked to their academic degree, has been canceled. Regardless of their qualifications, Omanis will be paid RM 325, the minimum prescribed salary. Several other initiatives have been put in place to ensure more job availability for Omanis in both the private and government sectors. This includes the discontinuation of sub-contracting of expatriate employees.

It is acceptable to provide employees with online payslips

Payslip

Payroll report must be kept for 10 years

Reports

30 days

Annual Leave

Employees are allowed 10 days of sick leave with full pay

Sick Leave

50 days of paid maternity leave. There is no provision for paternity leave

Maternity & Paternity Leave

30 days

Employee Termination

-

13th Salary

325 OMR per month

Minimum Wage

125% of the employee’s regular wage for daylight hours and 150% for hours worked at night

Overtime

15 days payment for each year of service once three years of employment has been completed.

Severance Pay

Tax and Social Security

The Tax Authority oversees the implementation of laws and regulations and provides services to support the business and finance sectors including taxpayer registrations, returns and tax certificates. The Public Authority for Social Insurance applies the provisions of Social Insurance Law such as insurance against old age, disability, death risks, insurance against work injuries and occupational accidents, insurance for Omanis working abroad and more.

Tax

Salaries of employees in Oman are free of taxes, there are no restrictions on transferring the employee’s salary to their home country. Every taxpayer shall adhere to the tax registration in the commercial registration at the Ministry of Commerce & Industry. All taxpayers (except the Enterprise) are required to submit two returns for any tax year. A provisional return is submitted within three months at the end of the tax year and a final return is submitted within six months of the end of the tax year.

-

Corporate Income Tax

-

Personal Income Tax

-

Sales Tax

5%

VAT

Social Security

There are eight governmental pension funds. These are for workers in both government and military sectors and the Public Authority for Social Insurance is the ninth fund for workers in the private sector.

-

Social Security Rate

-

Social Security Rate for Employers

-

Social Security Rate for Employees

Employment Law

Labor law requires a standard format written employment contract. Employers must obtain labor clearance, from the Ministry of Manpower, to hire expat employees from overseas. The private sector is also required to comply with Omanization targets for employment of roles. Companies who operate multi-country payroll should take note of the country’s priority to hire Omani nationals and where redundancies of Omani national employees are considered, a minimum of three months’ notice is required to be provided to the Ministry of Labor.

Employment Agreement

This is defined as an agreement between the employer and employee. Where the agreement is written in a language other than Arabic, a translation must be attached. A standard employment contract is issued by the Ministry of Manpower for Omani employees and there is a more detailed contract available for expatriate employees.

Working condition

The maximum work hours are nine hours per day. During Ramadan, the maximum work hours are six hours per day. Employees shall be provided with adequate means of protection against the hazards of occupational injury or disease.

Leaves

Employees are entitled to 30 calendar days of annual leave with gross salary (basic salary plus allowance). Female employees are entitled to six months maternity leave on full pay. An employer must not dismiss a pregnant employee nor send any notice during her pregnancy or maternity leave.

Employment termination

An employer may dismiss an employee by providing the end of service gratuity or Pension Fund. Dismissals can also occur without notice on misconduct-related grounds.

30 days

Minimum notice period for terminating an employee

10

Total number of public holidays

40

Working hours per week

3 - 5 days

Total number of days for Compassionate & Bereavement Leave

Immigration

Non Omanis are banned from taking on any job without procuring a labor card. Foreign manpower cannot be recruited without procuring a license from the Ministry of Manpower. In order to procure foreign manpower, the employer shall procure a labor license, a medical fitness certificate, employment visa, procure a labor card and ensure the medical fitness test is passed.

Residency permits

The employer must submit the employment license and medical certificate to procure an employment visa for the employee. The residence authority will stamp the employee’s passport providing a two year employment residency visa from the date of stamping of approval. A foreigner or resident person must procure a residence card from any directorate general of civil status within 30 days commencing the date of stamping in the passport.

Work Permit validity

Two years

Required Documents

A  plan demonstrating the positions filled by the applicant with Omani nationals

A list of desired expatriate employees, including positions and genders

Copies of all foreign employee passports with at least six months’ validity

Relevant certificates and qualifications for each employee

Transcripts from educational institutions for each employee

Attestation from the Ministry of Foreign Affairs and the Oman Embassy in the employee’s native country

Copy of the labor license issued by the Ministry of Manpower

Invitation or job offer letter from the registered company

Medical certificate from an approved clinic based in the employee’s home country

Two updated passport-sized photos.

Compliant, reliable, error-free and touchless payroll in Oman

Build the best team and hire top talent compliantly in Oman. Get in touch with Oman payroll outsourcing & PEO specialists for a free consultation!

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This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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