Oman to Announce Procedures for Conversion of LLCs into Joint Stock Firms

The Ministry of Commerce, Industry, and Investment Promotion (MoCIIP) on Sunday said that it will soon release the procedures and requirements for converting limited liability companies (LLCs) into closed joint stock companies. This move follows Royal Directives and new economic regulations.

H E Qais bin Mohammed al Yousef, Minister of Commerce, Industry, and Investment Promotion, emphasized that the Royal Directives to initiate the conversion of LLCs into closed joint-stock companies aim to encourage family-owned businesses to transition to joint-stock companies. This effort is intended to ensure their sustainability, as these companies constitute a significant portion of Oman’s economy. Additionally, the conversion is expected to enhance oversight, governance, disclosure, and transparency in business dealings.

In a statement to the Oman News Agency, H E Yousef highlighted that the initiative offers greater management flexibility, faster performance, and ease in trading shares. It also increases the confidence of investors, creditors, and customers in the continuity of the company and the strength of its financial position and social standing.

The ministry aims to facilitate the transformation of these companies into closed joint-stock companies by simplifying the necessary procedures.

H E Dr Saleh bin Saeed Masan, Undersecretary of the Ministry of Commerce, Industry, and Investment Promotion for Commerce and Industry, affirmed that the Royal Directives for capital market development initiatives supports the growth of Oman’s trade and industry sector.

He noted that encouraging the conversion of LLCs into closed joint-stock companies presents opportunities for growth, serves as an incentive for transformation into public joint-stock companies, and enhances oversight, governance, disclosure, and transparency in transactions. This transformation also offers greater flexibility in decision-making and boosts the confidence of those dealing with these companies.

Furthermore, the conversion contributes to the sustainability of businesses, ensuring their continuity across generations and strengthening their role in the national economy.

Mubarak bin Mohammed al-Duhani, Director General of Commerce at MoCIIP, confirmed that for LLCs to be eligible for conversion into closed joint-stock companies, they must meet several requirements, including a minimum market capital of RO500,000 and having at least three partners.

Currently, the ministry’s Commercial Registry has recorded 118,052 registered LLCs in Oman.