Oman: An Overview

Introduction

Oman is increasingly positioning itself as a developing jurisdiction for corporate and capital markets transactions within the Gulf Cooperation Council (GCC). This development is linked to the implementation of Oman Vision 2040, which continues to drive economic diversification, private sector growth and increased foreign investment.

Oman has become an efficient jurisdiction for investors to incorporate and operate a variety of business vehicles, including joint stock companies, limited liability companies (LLCs) and investment funds. This has contributed to a more stable and transparent environment, which is increasingly attractive to both regional and international investors.

General Business Overview

Oman’s corporate landscape is primarily governed by the Commercial Companies Law (CCL; Royal Decree No 18/2019), which provides a flexible framework for different types of business entities.

The LLC remains the most commonly used structure, particularly for foreign investors. Its popularity stems from relatively simple incorporation procedures, lower costs and fewer regulatory obligations compared to joint stock companies (public or private). Unlike joint stock companies, LLCs are not required to list on the Muscat Stock Exchange (MSX), making them operationally more straightforward.

However, LLCs may not be suitable for certain government-related projects, particularly in sectors such as electricity, water and other concession-based activities. In such cases, regulations often require the use of a joint stock company structure.

Oman permits 100% foreign ownership in many sectors, although certain activities remain restricted to Omani nationals under Ministerial Decisions No 209/2020 and No 364/2023. Additionally, some sectors require specific licences, which may impose further regulatory conditions.

Free zones and special economic areas play an important role in Oman’s investment ecosystem. These zones offer streamlined incorporation processes, tax incentives and foreign ownership flexibility. However, investors must carefully assess permitted business activities and entity types within each zone, as these vary depending on the location and sector focus.

Capital Markets Framework

Initial public offerings overview

Initial public offerings (IPOs) have become an increasingly important feature of Oman’s capital markets, driven largely by the government’s privatisation programme and the broader objectives of Vision 2040. In recent years, listings in key sectors such as energy, infrastructure and logistics have contributed to renewed activity on the MSX, signalling a more dynamic and accessible market for both issuers and investors.

IPOs in Oman are governed and overseen by the Financial Services Authority (FSA). The framework is primarily based on the CCL, Securities Law, the Executive Regulation of Public Joint Stock Company and other directives issue by the FSA, which set out the requirements for public offerings, disclosure and listing.

The IPO process in Oman is centred on disclosure and regulatory approval. A key requirement is the preparation of a prospectus, which must include all material information relating to the company, its financial position, business operations and associated risks. The prospectus is subject to review and approval by the FSA, and issue managers are responsible for ensuring its accuracy and completeness.

IPO transactions in Oman are usually structured to include both institutional and retail investors. Shares are often allocated across different tranches to ensure a balanced investor base and promote wider market participation.

In terms of structure, IPOs may involve the issuance of new shares to raise capital, the sale of existing shares by current shareholders or a combination of both. Government-related IPOs, in particular, are often part of broader privatisation initiatives, where the objective is not only to raise funds but also to enhance corporate governance and introduce market discipline.

IPOs in Oman offer clear advantages, including access to capital, enhanced corporate visibility and improved governance standards. For investors, they provide opportunities to participate in the growth of key sectors aligned with national development priorities.

However, certain challenges remain. Market liquidity, while improving, is still relatively limited compared to larger regional exchanges, and valuation considerations may be influenced by sector concentration and investor base dynamics. In addition, the IPO process requires thorough preparation and regulatory co-ordination, which can impact transaction timelines.

The outlook for IPO activity in Oman remains positive. Continued privatisation efforts, combined with regulatory enhancements and growing investor participation, are expected to support a steady pipeline of future listings.

Investment funds overview

Oman’s investment funds sector has developed steadily in recent years, reflecting broader efforts to diversify the economy and deepen the capital markets under Vision 2040. While still relatively modest in size compared to more established regional fund jurisdictions, the market is becoming increasingly structured, with a growing range of regulated fund types and a legal framework that emphasises transparency, investor protection and long-term capital formation.

This sector is regulated by the FSA under the Executive Regulation of the Capital Market Law (Decision No 1/2009) (the “Executive Regulations”). Additional frameworks, such as the Real Estate Investment Funds Regulations (Decision No E/2/2018) (the “REIF Regulations”), provide tailored rules for a specific fund category.

The FSA recognises several categories of regulated investment funds, each designed to accommodate different investor profiles and investment objectives. Public funds are usually open to retail investors as well as sophisticated investors and are subject to comprehensive regulatory oversight, including disclosure, governance and reporting requirements. Private funds, by contrast, are limited to sophisticated or high net worth investors and are typically used for more specialised investment strategies.

While public and private funds differ in terms of their target investor base and certain operational flexibilities, both are established and regulated in accordance with the Executive Regulation. As such, the core regulatory requirements governing fund establishment, licensing, disclosure and oversight are broadly consistent across both categories, with distinctions arising primarily in their application rather than in the underlying legal framework.

Funds in Oman can be structured either as open- or closed-ended investment funds. Open-ended funds have variable capital that may be increased with the issue of new investment units and may be reduced by the redemption of part of their units during a period prescribed in the constitutional documents. Closed-ended funds have fixed capital whose investment units are only redeemable after the expiry of the term. The capital of such funds may be increased pursuant to the provisions of the constitutional documents, and the units shall be listed on the MSX.

A particularly significant category in Oman is real estate investment funds (REIFs), which are governed by the REIF Regulations. REIFs are registered as closed-ended funds, listed on the MSX and subject to additional requirements, including minimum asset allocation thresholds in real estate and mandatory income distribution provisions. Their structure has made them an attractive option for investors seeking stable and predictable returns.

Future Prospects

Oman has established a solid legal and regulatory framework that supports both corporate and capital markets development. The flexibility of company structures, combined with increasing openness to foreign investment, makes it an appealing jurisdiction for business formation and expansion.

At the same time, the growth of IPO activity and the gradual development of the investment funds sector reflect Oman’s broader commitment to economic diversification under Oman’s Vision 2040. While challenges such as market liquidity and regulatory complexity remain, ongoing reforms and privatisation initiatives are expected to strengthen the market further.