Friday 26 / April / 2024
Muscat: Companies registered and owned by nationals and Gulf Cooperation Council (GCC) shareholders in Oman, interested in purchasing real estate in Oman, should abide by the guidelines provided by the ministerial decision.
In a series of articles about Oman’s rules and regulations, entitled ‘Know Oman’, experts guide readers on their rights and responsibilities while working and living in Oman. Speaking exclusively to the Times of Oman, representatives of the Mohammed Ibrahim Law Firm, a leading legal office in Oman, discussed under what conditions companies registered in Oman and owned by Omani and GCC nationals can purchase real estate in the country for business purposes.
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“Article 1 of the new ministerial decision no. 41/2017 stipulates that private companies owned by Omani and GCC nationals may own the land and the real estate required to carry out their licensed activities, in accordance with applicable legislation,” said Dr. Mohammed Ibrahim Al Zadjali, Chairman of Mohammed Ibrahim Law Firm.
“The article specifies six basic conditions. First, the value of the property shall be commensurate with the capital of the company, as specified in the Commercial Register. Secondly, the properties owned by the company shall be limited to those necessary for establishment of administrative offices, residences for workers, warehouses, showrooms or facilities for tourism purposes (hotels, restaurants etc.),” Al Zadjali said.
Moreover, they shall own real estate properties consistent with their business activities and within the limits of their actual needs, and their ongoing or scheduled projects, according to Al Zadjali.
He further said that the owned lands or real estate properties should be in the same areas of the Sultanate where the company is carrying out its business activities or projects, and the company shall have at least 10 registered employees in Oman for this activity.
“A company that purchased a real estate property for its business activities shall not resell it in a shorter period than four years from the date of registering it on behalf of the company, as it is forbidden for a company to gain interest from buying and reselling real estate.
“Lastly, the company shall not rent to other third parties the real estate properties that were bought in order to perform its activities, with exception of the hospitality facilities acquired for tourism purposes, such as hotels or restaurants,” said Al Zadjali.
Another expert of the firm said that Article 2 of the same ministerial decision stipulates the geographical limits where companies that are not fully owned by Omani nationals cannot own lands.
“It is forbidden for these companies to own lands in the governorates near the national borders – Musandam, Al Buraimi, Al Dhahirah, Dhofar (except the city of Salalah), as well as in the localities of Jebel Al Akhdar or Jebel Shams, islands, historical centres of towns, as well as in Liwa, Shinas and Duqm, and in other areas specified by the Ministry of Housing,” Al Zadjali said.
This new ministerial decision repeals the previous ministerial decision 43/98 and all the provisions that would contradict those from the new ministerial decision 41/2017.
“In 2017, Saif bin Mohammed Al Shabibi, Minister of Housing, issued ministerial decision no. 41/2017, which defines new controls and limits of the lands and real estate properties owned by private companies for their business activities, as well as areas and provinces where companies with foreign shareholders are prohibited from owning lands.
“This ministerial decision is legally based on the Land Law promulgated by Royal Decree no. 5/80, the Real Estate Registration System issued by Royal Decree no. 2/98, and is amending the previous ministerial decision no. 43/98 on the controls of ownership and registration of companies` properties,” Al Zadjali added.
Mohammed Ibrahim Law Firm ([email protected]) was established 11 years ago and is serving clients through its offices in Muscat and Sohar, as well as operating on a request basis in other areas, such as Duqm.
It offers legal representation across a wide range of practice areas that include labour law, corporate, commercial, contracts, banking and finance, international trade, foreign investment, insurance, maritime law, construction and engineering contracts, international arbitration, intellectual property and more.
