New MoL Mechanisms for Appointing Omani Representatives: Implications for Businesses Registering in Oman
Muscat: The Ministry of Labour (MoL) announced new mechanisms on Sunday aimed at enforcing a mandate that requires every commercial registration, once it has been established for a year, to appoint at least one Omani employee.
This requirement applies across various categories, including foreign investment companies, businesses with more than ten workers, those with fewer than ten employees, and registrations held by entrepreneurs and the self-employed.
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Foreign Investment Establishments
Foreign investment entities that have been operational for a year must submit a hiring plan for at least one Omani citizen within three months. This plan may consist of direct employment or a clear operational outline leading to actual recruitment. All non-compliant foreign investment firms will face restrictions, regardless of the number of expatriate employees listed. A grace period of up to three months from the date of notification will be granted for compliance. -
Companies with More Than Ten Employees
Firms employing more than ten staff are also required to submit an Omanisation plan within three months. This may include either direct hiring or an operational plan that leads to effective recruitment. Companies will be notified electronically, and failure to act will result in restrictions on obtaining new licenses, which will be reflected automatically in the system. -
Companies with Fewer Than Ten Employees
Businesses with fewer than ten employees must submit plans to employ at least one Omani within six months. These firms will be assessed within six months of notification to determine their contribution to local added value (LAV). Similar to larger companies, they can opt for either direct employment or a solid operational plan. If a firm demonstrates a significant contribution to LAV, it may receive a temporary exemption from the hiring requirement. Non-compliance will also result in restrictions reflected in the licensing system. - Entrepreneurs and Self-Employed Individuals
Entities owned by entrepreneurs and self-employed individuals will receive a one-year grace period from the date of notification to adjust and meet Omanisation criteria. A review will take place within six months to evaluate their contributions to local added value. Those without a “Riyada” certificate are encouraged to register with the Small and Medium Enterprises Development Authority to obtain the card and access associated benefits and exemptions.
These measures have been developed in collaboration with the Ministry of Commerce, Industry, and Investment Promotion to ensure alignment between business registration and labor market regulations.
Special Analysis by Omanet | Navigate Oman’s Market
The recent decision to enforce Omanisation across various business sectors presents both opportunities and challenges for investors. Companies must now adapt quickly to comply with hiring mandates, which could lead to potential delays in expansion plans or increased operational costs. Smart entrepreneurs and investors should develop proactive recruitment strategies to align with local labor regulations and leverage government incentives, ensuring they remain competitive in a shifting market landscape.
