Legal and Regulatory Frameworks for Startups
LAWS FOR RETAIL AND COMMERCIAL AGENTS
The competition law is applicable for businesses in any industry. Since issuing the Royal Decree 2/2018, the Centre for Competition Protection and Monopoly Prevention (CCPM) controls competition and enforces the law known as the Competition Protection and Anti-Monopoly Law.
The key things to know about this law are:
- Dominance. The government will enforce the law if any company controls the market directly or indirectly by acquiring 35% or even more market share.
- Concentration. The law is enforceable if you transfer assets, shares or liabilities from one company to another and it results in a group of people or company being in a more dominant position, either directly or indirectly. This can also happen if you combine two or more companies into one under merger and acquisition.
Some of the marketing agents and agreements are regulated and monitored by the government. For instance, advertising, promotion and price discounting are strictly regulated by the Public Authority for Consumer Protection (PACP). These are mainly applicable to retailers or agents selling products in the market to mass consumers.
“Agents” are typically appointed by foreign producers/manufacturers to sell their products locally. There is a “commercial agent” register under the Commercial Agency Law which requires local agents and their controlling companies to be supervised by a regulatory body. Since 2014, a number of protection measures have been diluted, such as ‘compensation for non-renewal’. However, most of the laws are still applicable. More information on the law can be found here.
Unless your company is active in Oman and conducts more activities beyond importing, such as distribution network control, distribution of products isn’t regulated. The government will monitor such activities, and you will need to apply for a license. If you are planning to operate a franchise, you do not require a license.