How to hire employees in Oman

Dive into the dynamic hiring landscape of Oman, where opportunities abound in thriving sectors like tourism, oil and gas, and technology. This guide offers essential insights for businesses aiming to excel in Oman's diverse and growing market.
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Oman's strategic location and growing economy make it an attractive destination for businesses seeking skilled professionals in sectors such as energy, tourism, and information technology. Known for its stability and progressive business environment, Oman provides a platform for companies looking to balance cost efficiency with access to a competent workforce.

The Omani labor market is characterized by a commitment to education and professional development, ensuring a steady supply of well-trained individuals, especially in industries vital for the country’s diversification and technological advancement. 

With its favorable investment climate and a diverse pool of talent, Oman presents a lucrative opportunity for businesses focused on long-term growth and innovation.

 How to hire employees in Oman

What you need to know before hiring employees in Oman

Job market in Oman 

  • Oman’s strategic geographic position and modern infrastructure make it a prime location for international trade and investment, with over a hundred U.S. firms operating, indicating a stable and favorable business environment.
  • Supported by a rebounding economy fueled by high oil prices, Oman is utilizing these revenues for significant development projects and debt reduction, demonstrating strong economic fundamentals conducive to business growth.
  • With a concerted push towards diversification under Vision 2040, sectors like manufacturing, logistics, tourism, and green energy are ripe with job creation opportunities, making Oman an attractive market for expanding businesses.
  • Recent legal reforms aimed at enhancing the investment climate, such as the new labor law, promise a more flexible hiring landscape and reduced bureaucratic hurdles, facilitating easier market entry for startups and international companies.
  • Special incentives for foreign investors and increased opportunities for private-sector participation in public projects through public-private partnerships signal ongoing growth in the non-oil sectors, expanding the labor market for diverse industries.
  • Oman's commitment to international cooperation, exemplified by the U.S.-Oman Free Trade Agreement and substantial investments in key infrastructure, underscores its role as a burgeoning hub in the Middle East, ideal for businesses seeking to tap into a growing market.

For international businesses considering expansion or talent acquisition, Oman  presents a compelling market with a forward-looking employment landscape, skilled workforce, and supportive government policies aimed at fostering a dynamic economic environment.

Oman Hiring Trends

As Oman navigates a period of significant economic transition and growth, it's crucial to understand the evolving job market and economic conditions. Here are some key hiring trends:

  • Oman's unemployment rate experienced a minor reduction in 2023, reaching an impressively low 1.5%. This suggests a robust labor market, ideal for businesses looking to capitalize on a stable employment environment. This trend presents an opportunity for employers to attract and retain top talent in a competitive market.
  • The projected mild increase in inflation to 2% by 2028 indicates a stable economic outlook for Oman, reassuring for businesses concerned about long-term financial planning and investment. This gradual inflation rise underscores a controlled economic environment, fostering a reassuring climate for new and expanding businesses.
  • Oman's GDP is expected to see a substantial rise, suggesting vibrant economic growth and a broadening range of business opportunities. This expansion is driven by a strategic shift towards diversifying the economy beyond oil, enhancing prospects in non-oil sectors such as manufacturing and services.
  • With the need to create over 4.3 million jobs by 2030 to maintain a natural unemployment rate, Oman is poised for a significant employment surge. This scenario highlights the critical need for strategic planning and investment in human capital, presenting a unique challenge and opportunity for businesses to contribute to job creation at an unprecedented scale.
  • The anticipated growth in service and manufacturing sectors due to increased consumption offers fertile ground for businesses in these industries. Opportunities for roles in management, arts, and personal services are expanding, contrasting with slower growth in traditional sectors like construction and public administration, directing employers towards sectors with higher growth potential.

How to hire employees from Oman

1. Set up an entity in the country

Setting up a legal entity in Oman offers strategic advantages for market presence and operational control. Investors can choose from structures like LLCs, joint stock companies, branches, and representative offices, each catering to specific business needs. The incorporation process, streamlined through initiatives like the MOCIIP’s e-portal, typically takes four to six weeks. Recent legal reforms, including the introduction of single person LLCs and relaxed foreign ownership rules, have simplified entry for foreign businesses. Navigating this environment effectively requires understanding local regulations and may benefit from expert guidance to ensure compliance and strategic alignment.

2. Hire independent contractors

Hiring independent contractors in Oman involves entering into contractual agreements with individuals or entities for specific, often project-based tasks. This method offers flexibility, particularly advantageous for short-term or specialized projects. It's essential to accurately classify these workers to prevent legal issues and potential fines.

While independent contractors in Oman may not demonstrate the same level of commitment or loyalty as full-time employees, careful planning and clear contractual terms can ensure effective collaborations. Companies must comply with Omani labor laws, tax regulations, and any relevant industry-specific guidelines to mitigate risks and maintain productive working relationships with contractors.

3. Partner with an EOR in the country

Partnering with an Employer of Record  service in Oman offers a streamlined solution for companies aiming to establish a presence without navigating the complexities of setting up a legal entity. This approach minimizes liabilities and proves cost-effective. Collaborating with an EOR ensures strict adherence to Omani labor laws, tax obligations, and regulations, significantly reducing legal risks and enhancing the ease of business operations. When choosing an EOR partner in Oman, it's crucial to evaluate their expertise, reputation, and ability to provide tailored services, ensuring a compliant and effective entry into the Omani market.

Compliance risk while hiring in Oman

When hiring in Oman, businesses face compliance risks primarily associated with misclassifying employees as independent contractors, which can lead to legal repercussions. It is imperative to adhere to Oman's labor laws, tax requirements, and mandatory social security contributions. Companies must also ensure compliance with detailed contract documentation and strict termination regulations. Violations of local employment laws can result in significant fines. Accurate worker classification and a thorough understanding of Omani employment regulations are essential to mitigate legal risks and ensure a compliant hiring process.

Key Aspects of Oman Labor Law

Employment Contract:

In Oman, adhering to the regulations set forth in Sultan's Decree no.35/2003 is crucial for crafting legally compliant employment contracts. These documents must be presented in Arabic or accompanied by a certified Arabic translation to meet formal requirements. While the presence of a formal contract is not strictly necessary to establish an employment relationship, having one serves as robust documentation of the agreed terms between parties.

Each contract should meticulously detail critical information such as:

  • The names and addresses of the contracting parties, 
  • The employee's role and responsibilities, 
  • Contract duration, 
  • Compensation details including any benefits, 
  • A clearly stipulated notice period for termination. 

Moreover, it's essential that these agreements uphold the respect for Islamic practices, local laws, and cultural norms, ensuring no activities compromise national security.

The framework for employment contracts in Oman allows for both fixed and indefinite terms, catering to the varying needs of project timelines or ongoing positions. Ensuring these contracts include all mandatory entitlements not only aligns with legal standards but also enhances the organizational reputation, supporting sustainable business operations in the region.

Working Hours:

In Oman, a typical work week is set at 45 hours, with daily work hours spanning nine hours. During the month of Ramadan, these hours are reduced to 30 hours per week, equating to six hours per day.

Overtime

Overtime work exceeding the standard 45 hours per week is compensated according to employment contracts or collective agreements. Employees working beyond normal hours or on holidays can do so for up to 12 hours a day, and these overtime provisions should be clearly outlined in the employment agreement. It's important to note that overtime pay cannot be included in the regular salary.

Managers are generally exempt from these overtime restrictions and are not entitled to additional pay for extra hours worked. Any overtime beyond the standard weekly hours is paid at a rate of 125% of the regular wage for daytime work and 150% for nighttime work.

Minimum Wage:

In Oman, the minimum monthly wage is set at 325 OMR, with 225 OMR designated as the base salary and an additional 100 OMR allocated as a bonus.

Payroll laws in Oman

In Oman, salaries are generally paid on a monthly basis, with employers required to issue payments to employees at least once per month.

Employment benefits in Oman

Leave Policies in Oman

1. Paid Time Off:

Employees are entitled to 30 calendar days of annual leave at their full regular salary after working consecutively for six months at the same organization. Any leave not taken within the year can be carried over to the following year.

2. Public Holidays:

In 2024, there are a total of 15 public holidays listed. Some of these holidays, such as Eid al-Adha and The Prophet's Birthday, are based on the lunar cycle and are marked as tentative until confirmed closer to their respective dates.

3. Sick Days:

Week(s) Compensation
1-2 100% of wages (by employer)
3-4 75% of wages (by Social Security)
5-6 50% of wages (by Social Security)
7-10 25% of wages (by Social Security)

4. Maternity Leave:

Under Article 83, Part 5 of Oman's Labor Law, female employees in the private sector are granted 50 days of maternity leave, which includes the time before and after childbirth, paid at their full regular salary. A female employee can avail this benefit up to three times during her tenure with one organization. In contrast, Civil Service Law No. 120/2004 extends this provision to female public sector employees, allowing them to take maternity leave up to five times throughout their employment.

5. Paternity Leave:

Oman's legislation does not currently include any provisions for paternity leave.

Public Health Insurance 

In Oman, public health insurance is still developing, with the government providing basic health services primarily funded by state revenues. The healthcare system in Oman is accessible to all Omani citizens and offers services at no direct cost to the individual. This system includes a network of hospitals and clinics spread across various regions, ensuring that healthcare is available to everyone, regardless of their location.

While expatriates and non-citizens are required to have private health insurance, the government has been making strides toward expanding health coverage and has plans to introduce a more comprehensive public health insurance scheme to include broader segments of the population, enhancing healthcare quality and accessibility.

Filing tax in Oman

Income Tax:

Oman doesn't have personal income tax contributions. 

Other Tax and Social Security Contributions:

In Oman, payroll contributions are integral to the employment structure, with employers and employees contributing to various funds. Employers contribute a total of 12.50%, which includes 10.50% for Social Security, and 1% each for Occupational Injury and Disease and the Job Security Fund. Employees contribute 8.00%, with 7.00% going towards Social Security and 1.00% to the Job Security Fund. These contributions ensure a safety net covering social security benefits, occupational health, and job security. It's important to note that foreign or expatriate workers are exempt from these contributions. This streamlined system supports essential welfare services for Omani workers. Refer to our guide to learn more. 

Business culture in Oman

Understanding the nuances of business culture in Oman is essential for successfully navigating corporate interactions and building effective partnerships. Here are five key aspects to consider:

  • Business culture in Oman is characterized by a hierarchical structure where age and position are respected. Decisions are typically made by the highest-ranking person in the organization. Showing respect to senior figures is crucial in establishing and maintaining business relationships.
  • Building trust and personal relationships is essential in Omani business culture. Face-to-face meetings are preferred, and considerable time may be spent on relationship-building before getting into serious business discussions.
  • The business environment in Oman is conservative, reflecting the country's Islamic traditions. Dress conservatively, and be mindful of Islamic practices and holidays. Public behavior should always be respectful of local customs.
  • Communication tends to be indirect to maintain politeness and avoid conflict. It’s important to read between the lines and pay attention to non-verbal cues. Directness in communication might sometimes be perceived as rude.
  • Decisions can take time as they often require considerable deliberation and the input of many senior-level people. Patience is valued, and pushing too hard for a quick decision can be seen as disrespectful. Negotiations may proceed slowly according to Western standards, emphasizing mutual benefit and long-term association.

Top sectors to hire from in Oman

Industry Sector

As the powerhouse of Oman's economy, contributing 56.98% to the GDP in 2022, the industry sector offers robust employment prospects, particularly in manufacturing, mining, and construction. These sectors are on the lookout for skilled personnel in various operational and managerial roles to support ongoing and upcoming projects as Oman continues to bolster its industrial framework.

Service Sector

Accounting for 44.48% of the GDP, the service sector in Oman presents a wealth of job opportunities, especially in fields such as retail, tourism, healthcare, and education. With Oman’s strategic push towards economic diversification, there is a significant demand for professionals in service management, customer support, and specialized healthcare roles, ready to cater to the evolving needs of this dynamic sector.

Top cities to hire from Oman

Muscat:

As the capital and economic hub, Muscat leads in sectors such as finance, tourism, and public administration. The city is home to a majority of the country's businesses and government institutions, making it a prime location for professionals in management, finance, hospitality, and healthcare.

Salalah:

Known for its thriving port and free zone, Salalah is a key player in logistics, manufacturing, and export-oriented industries. The city's development as a logistics hub offers ample opportunities for professionals in supply chain management, industrial operations, and trade.

Sohar:

Positioned as an industrial powerhouse, Sohar hosts a significant industrial port and free zone. The city is ideal for recruiting in heavy industries, including aluminum production, petrochemicals, and maritime logistics, attracting technical and engineering talent.

Duqm:

Emerging as a new economic center due to the ongoing development of the Duqm Special Economic Zone, this city is becoming a hotspot for jobs in construction, engineering, and hospitality, as it aims to become a major commercial and industrial hub.

Hire in Oman compliantly with Gloroots

As an Employer of Record (EOR) in Oman, Gloroots offers a seamless approach to navigating the complexities of local hiring. Our EOR platform provides swift onboarding of candidates, ensuring a smooth integration into operations while adhering to both local and international regulatory standards. Tailored for businesses of any size, it streamlines payroll, benefits administration, and tax compliance, thereby obviating the need to establish a local entity. This enables companies to efficiently build and manage a remote team in Oman. For more details on how Gloroots can facilitate your hiring initiatives in Oman, please reach out to us.

Frequently Asked Questions 

1. What types of business entities can be established in Oman?

In Oman, foreign investors and companies can establish various types of entities, including Limited Liability Companies (LLCs), Joint Stock Companies (public and private), Branch Offices, Commercial Agencies, and Representative Offices. Each entity type has specific requirements and benefits suited to different business needs.

2. What is the process for hiring foreign nationals in Oman?

To hire foreign nationals in Oman, companies must first obtain a labor clearance for each expatriate employee from the Ministry of Labor. Afterward, the employee must secure a work visa, residence permit, and other necessary legal documents. Companies are also required to adhere to the Omanization policy, which aims to prioritize the hiring of Omani nationals in various sectors.

3. Are there specific labor laws that regulate employment in Oman?

Yes, employment in Oman is regulated by the Oman Labour Law, which outlines everything from employment contracts to termination and end-of-service benefits. Employers must ensure compliance with these laws, including working hours, wages, leave entitlements, and safety regulations.

4. How does Oman's Omanization policy affect hiring?

Omanization is a national policy aimed at increasing the employment of Omani citizens in the private sector. Companies operating in Oman are required to meet certain quotas for Omani nationals depending on the industry and job category. Non-compliance with Omanization quotas can result in penalties and restrictions on business operations, including limitations on hiring foreign employees.

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