Oman and the United Arab Emirates are two Middle Eastern countries that offer entrepreneurs different opportunities depending on the goals and specifics of the business.
The UAE is a recognized international business hub known for its commitment to innovation and openness to foreign investment. Dubai and Abu Dhabi are the largest commercial, financial and tourist centers in the region. Modern infrastructure, including airports, ports and business complexes, makes the UAE a convenient base for companies focused on global markets. The spheres of technology, finance, logistics and trade are developing here perfectly. Thanks to modern infrastructure and free zones, companies can scale up quickly and enter international markets.
Oman, unlike the UAE, offers a calmer and less competitive business environment, making it suitable for startups and projects focused on regional markets. The economy is centered on oil, gas, fishing and tourism, but the government is actively working on diversification. Considerable attention is paid to reducing bureaucracy, simplifying company registration and creating tax advantages for entrepreneurs.
Let’s look at the differences between countries according to the main criteria:
1. Tax features.
Since 2023, the Emirates have introduced a corporate tax at the rate of 9% on net profits exceeding AED 375 thousand. There is also VAT at the rate of 5% if the company’s turnover exceeds AED 375 thousand and the business operates inside the UAE. If the company operates outside the UAE (sells goods or provides services) VAT tax will be at 0%.
Personal income, salaries and dividends in the UAE are not taxed, which makes the jurisdiction particularly attractive for entrepreneurs.
The corporate tax rate in Oman is 15%, which is higher than in the United Arab Emirates. The 10% rate applies to: royalties, management services, a number of other services (if there is no permanent establishment in Oman). VAT rate is also 5%, but it applies to a narrower range of transactions. There are no taxes on personal income.
2. Free Economic Zones.
There are more than 40 free economic zones in the UAE, each of which is focused on a specific industry. For example, DMCC in Dubai specializes on trade in various goods (including jewelry), Meydan and IFZA are mixed zones with trade and services, and Ajman Free Zone on logistics and manufacturing companies. Business registration in these free economic zones takes only a few working days and can be done online.
Oman has 3 free trade zones and 2 special economic zones and their infrastructure is still developing. The main ones are located in Sohar, Salalah and Duqm. They offer tax incentives and strategic locations for logistics. However, the registration process in Oman requires more time and approvals.
3. Licensing.
When arranging a license for a firm, the differences in the financial costs of the process are not insignificant. For example, payment for a license in the UAE occurs once a year, but in Oman, when registering, they require you to pay the cost of the license for three years at once, which significantly affects the price of business registration.
4. Visa options.
The Emirates offer a variety of visa types: for company founders, investors, students, retirees, freelancers, talented people, family members, etc. The validity of visas varies from 1 to 10 years. Each visa basis requires a certain list of documents and fulfillment of certain conditions.
In Oman there is no such a wide range of grounds for visas, but there is an opportunity to get a business or tourist visa and even residence permit when buying real estate from $650 thousand.
For example, in the UAE visa for the purchase of real estate can be obtained from $205 thousand for 2 years and from $550 for 10 years.
5. Office requirements.
In the Emirates you can open a business with a virtual office, flexi desk, smart desk, when in Oman requires a real office with a lease agreement, without which it is impossible to obtain a license. Renting such an office will significantly increase the company’s costs and reduce profitability.
6. Share capital.
In the UAE, it is sufficient to simply declare the amount of capital in the Memorandum up to a certain amount — without actually depositing it in an account. In Oman, it will be required to deposit the capital in a current account and document it.
So, the choice between Oman and UAE depends on your business objectives. The Emirates offers advanced infrastructure, wide access to global markets and minimal taxes for organizations in freezones, making it an ideal location for international businesses and startups.
Oman, on the other hand, is attractive to companies working with natural resources or targeting local markets. Despite higher tax rates, the country makes up for this with stability and growing opportunities in a less saturated competitive environment.
Makebiz’s experienced professionals can help you choose the best economic zone, license and all related documents according to the specifics of your business. Sign up for a free consultation and find out how to open a company in the UAE.
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