Danger to SMEs in Oman

Furthermore, if the employer is unaware, such trading could lead to him/her falling into a debt trap.

A large gap exists between the number of companies in Oman and the number of companies registered with the Public Authority for Social Insurance (PASI).

Mohammed Al Ansi, Chairman of the Committee for regulating the labour market at the Omani Chamber of Commerce and Industry, said, “The Public Authority for Social Insurance recently announced that the number of active institutions in the social insurance system was 16,617 by the end of December 2018, while the number of institutions and companies in total is thought to be over 270 thousand.”

Companies might avoid registration because of hidden trade, Al Ansi explained. “Hidden trade depends on an Omani national obtaining a commercial register and then giving it to an expat businessman to start a business in exchange for a monthly profit. This is the greatest danger to SMEs in Oman.” “It leads to a large gap in Omanisation,” he said. “Since a company that isn’t registered with social insurance will not care about Omanisation.”

Solving this problem, according to Al Ansi, begins with making companies register with the PASI and hire a number of employees.

Al Ansi added, “After that, these companies can be brought under the umbrella of Riyada, the Public Authority for SME development, so that they can be properly regulated.”