Where is the best place to start a business: Oman or the UAE

The UAE is renowned for its attractive tax system. Since 2023, the UAE has had a corporate income tax rate of 9%, which applies to net profits exceeding 375,000 dirhams (approximately US$102,000). This is a relatively low rate that is attractive to many organizations. However, in addition to corporate tax, there is a 5% VAT applied to companies with a turnover of more than 375,000 dirhams operating within the country. There are also many ways to optimize taxes and tax incentives in specially designated areas or when conducting qualified activities. Tax consultants at Openbiz can tell you more about this.

Oman has a corporate income tax rate of 15%. However, there are exemptions for certain industries and firms that meet the criteria for government support. Oman's tax system is more complex than that of the Emirates and requires careful study before making decisions.

The UAE is known for its developed and numerous FEZs in different emirates. For example, Meydan, IFZA, DMCC, and many others. They offer registration of various types of activities, 100% foreign ownership, a simplified opening process, and other advantages. The choice of a free zone depends on the specifics of the business and the desired location.

Oman is also actively developing its FEZs, such as Sohar Freezone, Salalah Freezone, and others. They offer tax incentives, simplified registration procedures, and attractive conditions for foreign investors. However, in terms of scale and diversity, Omani free zones are still inferior to those in the Emirates.

The licensing process in the Emirates is relatively simple and transparent. It may vary depending on the emirate chosen and the type of activity. License fees are paid annually, which allows for better budget planning. This provides flexibility and reduces the initial registration costs.

In Oman, the license fee is paid for three years at once. This significantly increases the initial investment, requiring the company to have more start-up capital. On the other hand, it can mean stability and no need for annual bureaucratic procedures.

The UAE offers various visa programs for investors, entrepreneurs, highly qualified specialists, freelancers, family members, etc. After obtaining a license, founders are entitled to apply for a two-year resident visa.

The Omani visa system is less flexible than in the UAE. The application process can take longer and require more documents. There are also fewer grounds for obtaining a visa in the country. Visas are particularly in demand when purchasing real estate worth $650,000 or more (in the Emirates, such a visa can be obtained for the purchase of real estate worth $205,000 or more).

In the UAE, you can rent a virtual office, office space in business centers, or purchase real estate. Office requirements depend on the type of license and type of activity. Often, a flexi desk is sufficient in free zones, which also allows you to save money at the initial stage.

Various office rental options are also available in Oman, but requirements may be specific to certain types of activities. For example, to register most types of businesses, you will need to rent a physical office.

The minimum authorized capital varies depending on the emirate, type of activity, and legal form. In most SEZs, it can be small or not require any actual contribution at all.

In Oman, the authorized capital must be deposited into a bank account and documented. This is a more stringent approach that requires real financial resources.