Liquidators and Administrative Fees

According to article 46(2) of the Commercial Companies Law, first priority goes to the liquidation process itself before any debts are settled. The company pays the liquidator hired to sell the assets, along with any court fees and the costs of keeping the company’s property safe until it can be sold. If these administrative costs are not covered, the legal process cannot move forward.

Worker Dues

According to article 92 of the Labour Law, wages, rights, and all amounts due to a worker or to beneficiaries on his behalf by virtue of the Labour Law have priority over all other debts owed by the employer. This means that priority shifts to staff and employee salaries, end-of-service gratuity, and any unpaid amounts immediately after the payment of fees associated with the liquidation process itself.

Privileged Creditors

Once workers are paid, priority moves to claims by privileged creditors such as government-owed taxes, secured bank loans, and other claims in accordance with article 185 of the Bankruptcy Law.

General Claims

Article 185 of the Bankruptcy Law further details that once privileged claims are settled, the liquidator addresses all other general third-party claims. This category includes business partners, trade suppliers, and contractors.

The Bottom of the List: Partners and Shareholders

Finally come the business owners. The partners or shareholders of the company are at the very bottom of the list. They only receive a distribution if there is money left over after every other debt, tax, and salary is paid in full in accordance with article 46(3) of the Commercial Companies Law.

Conclusion

This post provides a simplified outline of the order in which creditors are paid when an LLC liquidates. The matter becomes more complicated when there are multiple privileged creditors that have to go through their own prioritisation process.

If you are involved in the process of liquidating a business, we highly recommend that you familiarise yourself with the Commercial Companies Law and the Bankruptcy Law.

Written by:

Nouf Al-Lamki

Nouf is a legal intern at Decree. She has previously interned in the banking sector, the aviation sector, and in private practice. She is interested in corporate. She holds a LLB from the Modern College of Business and Science.

Organise Your Workflow with Pinned Conversations

Managing multiple research threads is now easier than ever. Your conversation list is now divided into Pinned and Recent sections, so your high-priority projects stay front and center.

• Conversations Controls: We’ve added a simple “hold and press” gesture. Just long-press any conversation to pull up a menu of options to Rename, Delete, or Pin/Unpin your chats.
• Search Within Chats: No more endless scrolling. You can now use the search bar within your conversation history to instantly find specific topics or past advice.

Smart Notifications for Deep Research

Because our new agentic search performs deep synthesis of Omani legislation, complex answers can take a moment to generate. You no longer need to wait inside the app. Simply submit your query and switch to other tasks and Lex AI will send a push notification to your phone and allows you to receive notifications on the desktop as soon as your response is ready.

These updates are live for all users on both iOS and Android as well as the web version of Lex AI. Update your app on the App Store or Google Play Store to get started.

This blog post will highlight five key attributes of this agreement:

1. CEPA is a Free Trade Agreement

A CEPA at its core is a free trade agreement, which is an agreement that focuses on eliminating tariffs on the import of goods and services between countries. A CEPA attempts to be more comprehensive by incorporating additional matters such as collaboration in the area of SMEs and other topics between countries.

2. Oman-India CEPA is the biggest treaty that Oman has ever signed

Based on word count and the number of pages of the agreement, This agreement is the biggest and longest agreement that Oman has ever taken part in.

3. The treatment of goods and services between the two countries under the CEPA is asymmetrical

While most bilateral agreements provide equal treatment between the two countries, CEPA adopts a more delicate approach as the treatment of goods differs between the two countries so that, for example, one good would be exempt from tariffs going into country A, but not exempt from tariffs going into country B. This is intended to ensure that countries domestic businesses are not affected by the provisions of the agreement.

4. Oman-India CEPA allows the presence of some employees of service providers to stay in Oman for periods upto four years

One of the unique aspects of the Oman-India CEPA is the treatment of the employees of service providers which will be allowed in specific cases to allow them to enter Oman and stay for a period of up to two years extensible for an additional period of two years. It is worth noting that this applies to a specific category of employees, such as senior managers and those with special technical skills, and not all the employees of the service provider.

5. Oman-India CEPA has not entered into force

Oman-India CEPA was signed in December 2025 and ratified by Oman in February 2026. For the treaty to enter into force, both Oman and India are required to complete their legal formalties and communicate to each other that the treaty is effective from their side. At the time of writing this post, India has not published any updates on completing its internal procedures to commence the implementation of the treaty. However, it is expected for this to take place in the upcoming months.

Conclusion

Oman-India CEPA is one of the most significant treaties that Oman has ever signed, and it is expected to have significant implications on the relationship between the two countries, but also on how business is conducted in Oman in general.

You can read the text of this treaty in full in English on the link below:

Written by:

Nouf Al-Lamki

Nouf is a legal intern at Decree. She has previously interned in the banking sector, the aviation sector, and in private practice. She is interested in corporate. She holds a LLB from the Modern College of Business and Science.

1. Electronic Signatures Carry Full Legal Weight 

Under the Electronic Transactions Law, electronic signatures and documents are legally equivalent to their paper-based counterparts. Article 8 of the Electronic Transactions Law explicitly states that an electronic document is deemed a written document and produces its legal effects if it meets the technical conditions. Furthermore, article 20 confirms that electronic contracts have the same validity, enforceability, and evidentiary power as traditional contracts.

2. Three Levels on Signatures

The law categorises electronic signatures into three types, each with different levels of security and evidentiary reliability:

1. Simple Electronic Signature

This is the most basic form which includes letters, numbers, codes, symbols, or any other mark placed on an electronic document or transaction. A simple electronic signature is reliable evidence if it meets the provisions stipulated in article 11 of this law, and any concerned party may prove by any means that this signature is reliable.

2. Advanced Electronic Signature

A step up in both security and legal standing, this signature must be unique to the signatory and capable of identifying and distinguishing them from others. For it to qualify as reliable evidence, three conditions must be met. The creation tool must be linked solely to the signatory and under their control at the time of signing. Any alteration to the signature after signing must be detectable. And where the signature’s purpose is to confirm data integrity, any changes to the associated electronic information must also be detectable. As with simple signatures, reliability can still be proven through other means.

3. Qualified Electronic Signature

Sitting at the top of the hierarchy, this is an advanced electronic signature that meets the same conditions as the advanced signature but is additionally linked to an electronic authentication certificate. That extra layer of verification gives it the highest degree of trust and legal reliability under the law.

3. Trust Services Require Official Licensing

Article 24 of the law identifies a range of trust services that form the foundation of secure electronic transactions. These include the issuance of electronic authentication certificates, qualified electronic signatures, electronic seals, verification of electronic identity, electronic delivery services, and any other services the ministry may specify.

According to article 25 no entity may provide these services without obtaining a licence from the ministry, subject to the conditions and procedures set out in the regulation. The only exception is for closed internal systems, where an entity processes electronic information or data entirely within its own structure without interacting with third parties or handling external transactions.

Furthermore, article 26 confirms that these licences cannot be partially or wholly assigned, and a provider cannot suspend its services or merge with another provider without the ministry’s prior approval.

4. Misuse Carries Heavy Penalties

The law sets out a clear scale of punishments under articles 31 through 37. Penalties range from fines of 100 Rial Omani and one month’s imprisonment for obstructing authorised officers, up to fines of 50,000 Rial Omani and five years’ imprisonment for operating trust services without a licence. Legal persons face double the maximum fine, and courts may confiscate all devices, tools, and funds connected to the offence. Furthermore, the ministry can also impose administrative fines of up to 2,000 Rial Omani for violating the law or the regulation.

Conclusion

This blog post provided some of the key provisions of the Electronic Transactions Law. We highly recommend that those working in e-commerce and digital business familiarise themselves with this law.

You can read the full text of the Electronic Transactions Law in English on Decree on the link below:

Written by:

Raghd Al-Hosni

Raghd is a legal intern at Decree. She has previously interned in the energy sector and the telecom sector. She is interested in corporate law. She holds a LLB from the Liverpool John Moores University.

Violating the PDPL can result in fines ranging from 500 Rial Omani to 500,000 Rial Omani depending on the nature of the violations as specified by the provisions of articles 25 to 29 of the PDPL.

Minor Violations

The smallest penalty under the PDPL is a fine between 500 and 2,000 Rial Omani if a person violates article 14 of the law, which requires a data controller to notify a data subject in writing of a specific set of information prior to processing the personal data.

Moderate Violations

The next scale of penalties is a fine between 1,000 and 5,000 Rial Omani, which is imposed if a person violates articles 15, 16, 17, 18, 20, or 22 of the law. Examples of such violations would be the failure to appoint an external auditor to verify that the processing is conducted in accordance with the law.

Serious Violations

If a person violates the provisions of article 13, a fine will be imposed against them between 5,000 and 10,000 Rial Omani. This article is violated if a data controller fails to put in place controls and procedures required to comply with data processing requirements, such as controls for determining the risks that a data subject is exposed to when their personal data is processed.

Major Violations

Higher fines are imposed for those who violate the provisions of articles 5, 6, 19, and 21 that range between 15,000 and 20,000 Rial Omani. Violations that can result in such fines include processing sensitive personal data, such as the processing of fingerprints, without the prior permission of the MTCIT.

Grave Violations

The biggest fine under the law, and probably one of the biggest fines in the whole Omani legal system, is the fine imposed when someone violates the provisions of article 23, which can result in a fine between 100,000 and 500,000 Rial Omani. This fine will be imposed when a person processes personal data outside the Sultanate of Oman in violation of the law.

Conclusion

The penalties imposed under the Personal Data Protection Law are extremely serious and can go up to 500,000 Rial Omani. It is highly recommended that all companies make themselves familiar with the Personal Data Protection Law by reading it on the link below:

Written by:

Wedd Al-Zadjali

Wedd is a legal intern at Decree. She has previously interned in a local law firm as well as in a telecom company. She holds a BSc in Criminal Justice and Criminology from the University of Portsmouth.

Bereavement leave in Oman is governed by the Labour Law of 2023, which entitles employees to paid leave in specific family circumstances, including the death of a close relative. Employers are legally required to grant this leave where applicable, ensuring employees can take time off without loss of income or job security. Unlike the Labour Law of 2003 which provided a leave category called “special leave” that can be used by employees as bereavement leave, the Labour Law of 2023 has a specific and exhaustive list of cases of family deaths that qualify as bereavement leave and give the employee the right to a specific number of days of leave ranging from two days to ten days, depending on the degree of kinship, in addition to the widowhood leave for Muslim women of 130 days.

Under article 84 of the Labour Law of 2023, if the spouse, son, or daughter of an employee passes away, the employee is entitled to ten days of fully paid leave. If the father, mother, grandfather, grandmother, brother, or sister of the employee passes away, the employee is entitled to three days of paid leave. If the uncle or aunt of an employee passes away, the employee is entitled to two days of paid leave.

In addition to these standard rules that apply to employees of any gender and nationality, article 84(8) grants a Muslim woman 130 days of leave if her husband dies. This is done in compliance with the Islamic rules for Iddah that last for a period of four months after the death of her husband. If the female employee is not Muslim, this period is reduced to 14 days.

It is important to note that bereavement leave is a special category of leave that cannot be waived by contract and that is offered to the employee in addition to their annual paid leave. If the death incident relates to an employee outside those stipulated by article 84, the leave would not fall under these categories and the employee would have to consume their annual paid leave to attend the funeral.

You can learn more about bereavement leave and other employees’ rights by reading the Labour Law on the link below:

Written by:

Badriya Al-Bulushi

Badriya is a legal intern at Decree. Prior to interning at Decree, she interned in a local law firm. She holds an LLB in Law and Criminology from Cardiff University.

Lunch breaks form an essential part of Oman’s labour framework. They are are designed to safeguard employee welfare, maintain balanced working conditions, and promote sustainable productivity. Article 70 of the Labour Law expressly provides that workers are entitled to a one-hour daily rest and eating break. This period is excluded from the calculation of actual working hours, and this was confirmed in Supreme Court (Labour Circuit) Contestation 766/2017 where the court held that the legally mandated one-hour break is not counted toward overtime calculation.

The fact that the lunch hour is not counted towards working hours means that when the Labour Law stipulates that the maximum working hours are 40 hours per week, these 40 hours do not include the lunch break, and this means that the lunch break is an additional time on top of the 40 hours.

Another key attribute of the lunch break hour is that it is mandatory, which means that the employer cannot agree with the worker not to have a lunch break so that the worker can leave work early, or to agree with him to have the lunch break as a shorter period than one hour.

If we combine this with the fact that the Labour Law also prohibits making the worker work for more than six continuous hours, this means that it is also not possible for the employer to agree with the worker to work for eight hours and have the lunch break hour at the end of the eight hours, effectively removing all legal grounds for the worker to demand to leave work early if the worker chooses not to have a lunch break.

Conclusion

The mandatory lunch break serves important legal and practical purposes: Protecting employee health and well-being, preventing excessive working hours, ensuring proper overtime calculation, supporting fair labour practices and promoting structured and humane working conditions. However, one can argue that making this hour mandatory can remove flexibility in the workplace if certain workers choose not to have lunch or agree to a shorter lunch break so that they can leave work early.

You can read the full text of the Labour Law in English on the link below:

Written by:

Wedd Al-Zadjali

Wedd is a legal intern at Decree. She has previously interned in a local law firm as well as in a telecom company. She holds a BSc in Criminal Justice and Criminology from the University of Portsmouth.

The Legal Framework for Enforcement

The enforcement of foreign arbitral awards in Oman is governed by article 353 of the Civil and Commercial Procedures Law. This article stipulates that the rules for enforcing foreign court judgments apply equally to awards issued by foreign arbitrators. To be enforceable, the award must pertain to a matter that is capable of being arbitrated under Omani law and must be final and enforceable in the country where it was issued.

The specific conditions for such enforcement are further detailed in article 352. Before issuing an enforcement order, the competent Omani court must verify that the award was rendered by a competent authority and that the parties were properly summoned and legally represented. Furthermore, the court ensures that the award was not obtained through fraudulent means, does not conflict with a prior final judgment issued by Omani courts, and strictly complies with the Sultanate’s public order and morals.

Procedural Requirements for Enforcement

The process of enforcing a foreign arbitral award begins with the submission of a formal request to the primary court. The claimant must provide the original award or a signed copy, a copy of the arbitration agreement, and a certified Arabic translation of these documents if they were issued in a foreign language. Furthermore, the petitioner must provide evidence that the award is final and enforceable in the country where it was rendered. Critically, the court’s role is limited to a procedural review to ensure compliance with the law, rather than a re-examination of the merits of the dispute.

Conclusion

In conclusion, there is a framework in Oman that makes enforcing foreign arbitral awards efficient and reliable. By following the required procedures and ensuring proper documentation, awards can be executed promptly while preserving the integrity of the arbitration process.

For more detailed information, you may refer to:

Written by:

Yasmeen Al-Habsi

Yasmeen is a legal intern at Decree. She has previously interned in the Government of the Sultanate of Oman as well as in a local law firm. She is interested in corporate law. She holds an LLB from Leeds Beckett University.

Formation

An SPC is a limited liability company in which 100% of the share capital is held by a single natural person (an individual) or a juristic person (a corporate entity). To maintain market transparency and prevent overly complex corporate webs, the law states that an individual may not establish more than one SPC, and that an SPC cannot establish another SPC of its own.

Limited Liability

The defining feature of an SPC is the limited liability shield provided to the owner, which caps their financial responsibility to the amount of the capital invested. This safeguards the owner’s personal assets from company debts. However, article 296 of the law provides that the owner would be held personally liable if he, acting in bad faith, liquidates it or discontinues its activity before the expiry of its duration, or if he does not separate the company’s business from his private business.

Dissolution

Article 295 of the law governs the dissolution of an SPC and provides that this occurs automatically upon the death of the sole natural owner unless the heirs consolidate the shares in one person or elect to continue the business in another legal form within 180 days, and the company likewise ceases if the juristic owner itself is dissolved.

Conclusion

SPC is one of the most popular company forms that are used for doing business in Oman. It is highly recommended that you read the text of the Commercial Companies Law to learn more about its attributes on the link below:

Written by:

Arwa Al-Zadjali

Arwa is a legal intern at Decree. She has previously interned in international and local law firms in Muscat. She is interested in corporate law and intellectual property. She holds an LLB from Cardiff University.

Minimum Annual Leave Entitlement

Article 78 of the Labour Law states that after completing at least 6 months of employment, a worker is entitled to paid annual leave for no less than 30 (thirty) days. Taking into consideration the interest of work, this annual leave may be divided, combined, or deferred for a later date.

It is important to note that the annual leave balance is distinct from weekly rest days, official holidays, special leave, and sick leave, which are separately regulated under article 79 to 83 of the Labour Law.

The employment contract may grant more annual leave days than the statutory minimum but cannot provide fewer than the law requires, as any agreement reducing this entitlement would be void under article 3 of the Labour Law.

The timing of the annual leave is generally agreed upon between the employer and the employee, taking into account operational requirement. While employers may organise leave schedules to ensure the continuity of business operation, they cannot unreasonably prevent employees from taking their entitled leave.

Carry-over and Postponement

As a general principle under Labour Law, annual leave should be taken within the year in which it accrues. However, article 78 of the Labour Law stipulates that a worker who does not utilise his annual leave has the right to retain the leave for a balance not exceeding 30 days.

Article 81 of the Labour Law also stipulates that the employer may postpone the annual leave of the worker if the interest of the work so requires for a period not exceeding six months.

Compensation Principles for Annual Leave

According to article 81 of the law, the employer may pay the worker the basic wage for the days of annual leave that he does not take, if the worker agrees to this in writing. The worker is also entitled to the gross wage for his annual leave balance if his service ends before exhausting it.

Practical Tips for Managing Annual Leave

Proper management of annual leave is essential to avoid disputes and ensure smooth workplace operations. In practice, many issues arise not from the law itself, but from poor planning or unclear processes. The following practical steps can help employers manage annual leave effectively and prevent common problems:

• Plan leave in advance: Employers should establish a clear leave policy and maintain a system to track leave balances, ensuring entitlements are properly monitored and recorded.
• Balance business needs with fairness: While operational requirements may influence leave timing, employees should not be unreasonably prevented from taking their annual leave.
• Monitor carry-over and postponement: Annual leave should generally be taken in the year it accrues, any postponement or carry-over should be limited and clearly documented.
• Communicate decisions clearly: Leave approvals, postponements, or recalls should be confirmed in writing to avoid misunderstandings.

These practices minimise disruptions, uphold employee satisfaction, and reduce legal risks.

It is highly recommended for all employers and employees to make themselves familiar with the leave related provisions of the Labour Law, which is available in full in English on the link below:

Written by:

Yasmeen Al-Habsi

Yasmeen is a legal intern at Decree. She has previously interned in the Government of the Sultanate of Oman as well as in a local law firm. She is interested in corporate law. She holds an LLB from Leeds Beckett University.