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What is the full form of SPC company,
What is saog company in Oman,
What is the difference between LLC and Saoc,
I. Single Person Companies (SPC)
In Art. 291-297 CL the law for the first time opens the possibility of incorporating a Single Person Company (sharikat al-shakhṣ al-wāḥid) in the Omani mainland.
The Omani SPC is a limited liability company (LLC) and the general rules of the Omani SPC are the ones applicable for Omani LLCs as long as there is no deviant legislation (Art. 291 Para 1, Art. 297 CL). However, as per the CL the Omani SPC already contains a number of features different from LLC rules and partly closer to partnerships or closely bound to the shareholder as a person.
Shareholder of an SPC can be natural as well as legal persons (Art. 291 Para. 1). Although at first sight, appearing very interesting as a form of investment for foreign companies, the SPC is in general not open as a vehicle for foreign investors. This is due to the Omani Foreign Investment Law (FIL) enacted by Sultani Decree 102/94. Based on the FIL and its interpretation in the light of the WTO rules, Oman requires a local shareholder to be involved in an invest vehicle by holding at least 30% of the vehicle.
This leads to a maximum foreign shareholder ship of 70% and by nature of this provision always requires a second shareholder. Exceptions to this rule are possible and foreseen by the FIL to contribute to the national economic development and need a special approval by the development council (majlis al-tanmiya) upon recommendation of the Ministry of Trade and Industry as well as minimum capital invested of RO 500 000/-. Though theoretically possible, this option is of rare practical occurrence. Another possibility for foreign investors to be able to set up an SPC is if the shareholder is subject to one of the international treaties granting equal rights to foreigners in certain areas, e.g. foreign investment. This would mainly be applicable in the framework of GCC relations and thus GCC nationals should be able to set up SPCs in Oman without further restrictions. It also applies in the framework of the U.S.-Oman Free Trade Agreement (FTA). As per Art. 10.3. Para 1 FTA, Oman shall accord to US Investors treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory. In basic this gives US-Investors the possibility to incorporate companies in accordance with the same conditions as Omanis. However, the term US-Investors may be interpreted restrictively by Omani authorities in a way, that an US Investor is either a US Citizen as a natural person or a company under ultimate US control/beneficial ownership. Thus, the possibility for non-US investors to set up an Omani SPC through a US subsidiary might be limited. In the past, US citizens working for an investor have been acting as "trustees" for the investor in order to facilitate the privileged access of US-persons to investment in Oman.
Art. 291 Para 2. CL limits the possibility for natural persons to own an SPC to one. It further bars One Shareholder LLCs form owning SPCs themselves. The usage of the term One Shareholder LLCs rather than SPC could indicate that this also applies to foreign One Shareholder LLCs and not Omani SPCs only.
The legislator's intention of enabling SPCs in Oman seems to be less a perspective to stimulation foreign investment through this vehicle. As outlined by Omani media, the main perspectives of allowing SPCs is to facilitate vehicles of Islamic banking and financial transactions most notable as Special Purpose Vehicles (SPV) for Islamic Bonds (ṣukūk).[1]
The procedures for the incorporation of an SPC are left to executive regulations (Art. 292 CL) and at the moment neither entirely clear nor put to test in practice. It can be expected, however, that they should not deviate too significantly from the incorporation procedures of an LLC, as here established practices exist.
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