Mistakes to Avoid When Starting a Business in Oman

Published on September 29, 2025 and written by Cyril Jarnias

Entrepreneurship in Oman offers excellent opportunities but requires careful preparation to avoid pitfalls. Here is a comprehensive guide to common mistakes to avoid when launching your business in this Gulf country, along with expert advice to maximize your chances of success.

A Sloppy Business Plan: The Recipe for Guaranteed Failure

Insufficient planning is one of the main factors behind new business failures in Oman. Too many entrepreneurs jump in enthusiastically without taking the time to develop a detailed roadmap. Yet, a solid business plan is the cornerstone of any successful business creation.

Oman has economic and cultural specificities that are crucial to incorporate into your strategic thinking. The local market, although dynamic, remains relatively small with about 5 million inhabitants. A thorough study of your industry and target audience is therefore essential to validate your project’s viability.

Don’t neglect the financial aspect of your business plan either. According to a recent study by the Oman Chamber of Commerce and Industry, nearly 40% of new businesses close within the first two years, mainly due to underestimating startup and operating costs. Take the time to establish realistic financial forecasts for at least 3 years, taking into account local tax and regulatory specifics.

Finally, your business plan should include a detailed SWOT analysis (strengths, weaknesses, opportunities, threats). This will allow you to clearly identify your competitive advantages and the challenges to overcome in the Omani market. Don’t hesitate to consult local experts to refine your strategy and avoid judgment errors due to unfamiliarity with the local context.

A well-crafted business plan will not only serve as your roadmap but also as a valuable communication tool to convince potential investors or partners. Take the necessary time to refine it, as this will significantly increase your chances of long-term success.

Sloppy Financial Management: The Path to Bankruptcy

Poor financial management is a trap that many entrepreneurs in Oman fall into, jeopardizing their company’s sustainability from the first months of operation. Several common mistakes are frequently observed:

Undercapitalization: Many entrepreneurs underestimate the working capital needed to start and operate their business in Oman. Costs related to obtaining licenses, renting premises, or recruiting qualified staff can quickly add up. According to a study by the Central Bank of Oman, nearly 30% of new businesses face financial difficulties within the first 6 months due to insufficient cash flow.

Poor cash flow management: Even with promising revenue, a company can face payment defaults if cash flows are not properly anticipated and managed. Payment terms can be long in Oman, particularly in certain sectors like construction. It’s crucial to implement rigorous tracking tools and anticipate working capital needs.

Neglecting accounting: Too many entrepreneurs focus solely on the operational aspect of their business at the expense of accounting management. However, poor accounting can not only lead to problems with tax authorities but also deprive you of crucial information to run your business. In Oman, international accounting standards (IFRS) are increasingly used, requiring specific expertise.

Lack of cost control: In the excitement of starting up, it’s tempting to multiply expenses without truly analyzing them. Yet, strict cost control is essential to ensure your company’s profitability. Every expense must be justified and contribute to value creation.

To avoid these pitfalls, it’s strongly recommended to:

• Establish a detailed financing plan for at least 3 years, including a safety margin
• Implement appropriate financial management tools from the start of operations
• Consult an accountant familiar with the Omani context to guide you
• Regularly monitor your key financial indicators and adjust your strategy accordingly

Rigorous financial management is the keystone of your business success in Oman. Do not neglect it under any circumstances.

The Regulatory Maze: Don’t Get Lost!

Neglecting regulations is a mistake that can be very costly for entrepreneurs in Oman. The country’s legal and administrative framework, although constantly evolving to promote entrepreneurship, remains complex and requires particular attention.

Business license: Each type of activity requires a specific license in Oman. A common mistake is to start operations without obtaining all necessary authorizations. Penalties can be severe, ranging from fines to outright business closure. According to the Ministry of Commerce, nearly 15% of businesses inspected in 2024 were in violation on this point.

Omanization: The Omanization policy, which aims to promote employment of nationals, imposes strict quotas in many sectors. Failure to comply with these quotas can result in significant financial penalties and jeopardize the renewal of your business license. It’s crucial to integrate this constraint into your recruitment strategy from the outset.

Taxation: The Omani tax system, although relatively favorable to businesses, has subtleties that need to be mastered. For example, the recent introduction of 5% VAT required rapid adaptation of accounting and invoicing processes. Unfamiliarity with tax obligations can lead to costly adjustments.

Data protection: With the enactment of the personal data protection law in 2023, companies must now comply with new requirements for collecting and processing customer information. Penalties for non-compliance can reach up to 500,000 Omani rials.

To navigate this regulatory maze smoothly, here are some recommendations:

• Hire a lawyer specialized in Omani business law to assist you with procedures
• Stay informed about regulatory developments by subscribing to official organization newsletters
• Implement a legal monitoring system to anticipate changes affecting your business
• Regularly train your team on regulatory aspects related to your industry

Regulatory compliance is not an option in Oman; it’s an absolute necessity for your business’s sustainability. Invest the time and resources needed to ensure you’re always in compliance.

Competition: Ignoring It Is Running to Your Demise

Underestimating competition is a fatal mistake made by many entrepreneurs in Oman, convinced that their product or service is unique. However, the Omani market, although dynamic, is also very competitive, with a growing presence of international players.

Superficial market analysis: Too often, entrepreneurs settle for a quick market analysis without considering the full complexity of the competitive environment in Oman. A study conducted by the Oman Chamber of Commerce and Industry in 2024 reveals that 35% of new businesses had not properly identified their direct and indirect competitors before launching.

Neglecting local specifics: The Omani market has cultural and economic particularities that are crucial to understand. For example, the importance of personal relationships in business or the preference for certain distribution channels can give a decisive advantage to well-established local players.

Lack of competitive intelligence: In an ever-changing economic environment, failing to implement regular competitive intelligence can cause you to miss emerging opportunities or threats. Businesses that succeed in Oman are those that can quickly adapt to market changes.

Unclear positioning: Due to insufficient competition analysis, many businesses struggle to clearly define their unique value proposition. Result: they get lost in the crowd, unable to stand out to potential customers.

To avoid these pitfalls and turn competition into opportunity, here are some strategies to implement:

• Create a detailed mapping of your competitive environment, including direct and indirect players
• Thoroughly analyze the strengths and weaknesses of your main competitors to identify unexplored market niches
• Implement an effective competitive intelligence system using social media analysis tools and market data
• Clearly define your competitive advantage and communicate it effectively to your target audience
• Stay agile and ready to pivot if necessary to adapt to market evolution

In-depth knowledge of your competitive environment is a major asset for success in Oman. Make it a strategic priority from your business launch.

Your Anti-Failure Shield: Anticipation and Adaptation

To maximize your entrepreneurial success chances in Oman, it’s crucial to adopt a proactive and flexible approach. Here are some essential prevention strategies to implement:

Continuous training: The business world in Oman is evolving rapidly. Invest in your training and that of your team to stay at the forefront of trends and best practices. The Oman Chamber of Commerce and Industry regularly offers training programs tailored to local entrepreneurs.

Strong network: Cultivate a diverse professional network in Oman. Personal relationships play a crucial role in the local business world. Actively participate in networking events and join relevant professional associations for your sector.

Operational agility: Implement flexible processes that will allow you to quickly adapt to market changes. The Covid-19 crisis demonstrated the importance of this agility for business survival in Oman.

Constant innovation: Don’t rest on your laurels. Encourage a culture of innovation within your company to stay competitive. The Omani government offers tax incentives for businesses investing in R&D – take advantage of them!

Risk management: Regularly identify and assess potential risks to your business. Implement contingency plans for the most likely scenarios. This proactive approach will allow you to respond effectively in case of crisis.

Customer feedback: Stay attentive to your customers. Implement effective communication channels to gather their feedback and adjust your offering accordingly. Customer satisfaction is a key differentiation factor in the Omani market.

Strategic partnerships: Identify complementary partners who can help strengthen your market position. Joint ventures with local companies can be particularly beneficial for navigating the Omani business environment.

By adopting these preventive strategies, you’ll build a resilient business capable of thriving in Oman’s dynamic economic landscape. Remember that entrepreneurship is a marathon, not a sprint. Patience and perseverance are essential qualities for long-term success in this country.

Creating and developing a business in Oman presents tremendous opportunities but also specific challenges that should be anticipated. By avoiding the common pitfalls we’ve detailed and implementing the recommended prevention strategies, you’ll maximize your chances of success in this promising market.

Remember that entrepreneurship is a continuous learning journey. Stay humble, open to advice, and ready to adapt. With careful preparation and thoughtful execution, your business has every chance to thrive in Oman’s dynamic economic landscape.