Saturday 27 / June / 2026
The Commercial Companies Law of Oman, issued by Royal Decree 18/2019, establishes a structured framework for holding and subsidiary companies to facilitate investment and group business management.
In an exclusive interview with Times of Oman, Dr. Mohammed Ibrahim Al Zadjali, Chairman of Mohammed Ibrahim Law Firm, explained that “a holding company is a joint stock company exercising financial and administrative control over one or more joint stock or limited liability companies, which become its subsidiaries through the holding of at least fifty one percent (51%) of the shares of each of such companies. Importantly, a holding company is statutorily required to invest its funds through its subsidiaries.”
“The law prohibits holding companies from acquiring shares in general partnerships or limited partnerships or own any shares in other holding companies. A minimum issued share capital of OMR 2,000,000 is required, and the commercial name must include the term “holding company”. The provisions of the joint stock company shall apply to the holding company to the extent that is not inconsistent with the provisions of Commercial Companies Law,” he said.
Dr. Al Zadjali further stated that” the law sets out six objects within which a holding company shall operate: managing subsidiaries or participating in the management of companies in which it is a shareholder; establishing joint stock or limited liability companies; providing guarantees, loans and finance to subsidiaries; investing in shares, bonds and other securities; acquiring movable and immovable properties within the limits permitted by law; and acquiring patents, trademarks, concessions and other intangible rights, utilizing and licensing them to subsidiaries and others.”
“A holding company may be formed by establishing a new joint stock company with holding company objectives, by amending an existing joint stock company’s objective, or by converting a limited liability company,” he said.
He further stated that “a subsidiary company whether a joint stock company or limited liability company has its own independent legal personality, and the holding company bears no liability for its debts. A subsidiary shall not hold shares in any of its holding companies; if it held such shares before becoming a subsidiary, they shall be disposed of within one year from the date subsidiary status is established, with voting rights suspended during that period.”
The law establishes a clear framework for holding and subsidiary companies, facilitating investment and the management of corporate group structures, he concluded.
(Mohammed Ibrahim Law Firm ([email protected]), (+968 244 87 600) was established on 14th December 2006 and is serving clients through its offices in Muscat and Sohar, as well as operating on a request basis in other areas. 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).
