Ministry simplifies rules for setting up contracting companies in Oman

Energy Sunday 22/January/2017 21:58 PM
By: Times News Service
Ministry simplifies rules for setting up contracting companies in Oman

MUSCAT: Establishing a contracting company has now been made easier, following a recent ministerial decision by the Ministry of Commerce and Industry.
New companies are no longer required to show proof of capital when registering new construction or contracting establishments. Experts say that this will encourage more firms to be created, something that will increase competition in the sector and create more jobs for the nation’s workforce.
Ministerial Decision 13/2017 on issuing regulations on companies and establishments in the contracting sector was issued by the Minister of Commerce and Industry, Dr. Ali Al Sunaidi, with the aim of creating new local jobs.
According to Pradeep Kotari from Recruitment Appraisal at Al Adrak Trading and Contracting LLC, following this directive, more companies will be established in the construction sector and more competition will be encouraged.
“Oman is currently not up to the same standards of construction, compared to other countries. The new regulations will encourage new companies to develop new ideas and new technologies. It will also create more competition between existing firms,” said Kotari.
“There will be more job opportunities for Omanis and there will be people to work in different areas,” he added.
According to the decision, proof of capital will no longer be required and contracting activities will not require different commercial licenses for different contracts. Therefore, companies will be able to register different contracts under the same licence as their other existing projects.
The ministerial decision also requires the owners of the companies to be involved with their projects on a full-time basis, or to appoint an Omani manager to oversee the company’s operations.
According to the CEO of Oman Society of Contractors, Shahswar Al Balushi, this new addition to the amendment is a positive step. “The intention is to regulate the market and control it in order to reduce hidden trade. It is good for small and medium sized firms, if the owners dedicate themselves to the business, or to appoint an Omani to manage it,” said Al Balushi.
“Some people have established construction companies while they have another job, then they leave the company for an expatriate to look after. But now if you want to conduct business under this new regulation, you need to work directly at the business,” he added.
He further explained that the decision will suit business owners who want to have direct involvement in operating their businesses, but not those who are looking to establish contracting companies for other motives.
Companies and establishments will now need to display their company name and details on all cars, trucks and equipment used for contracting purposes.