Oman’s Financial Services Authority (FSA) has launched the Capital Market Incentive Programme (CMIP), on 11 August 2024, aimed at enhancing the investment and business environment in the Sultanate. The initiative is part of a broader strategy to support economic development and align with Oman Vision 2040.

The CMIP will operate over five years and includes three primary pathways.

Pathway 1: New Joint-Stock Companies

The first pathway encourages companies to list on the main stock market by offering:

  • A two-thirds income tax reimbursement for five years after listing, reducing the effective tax rate to 5% from the standard 15%.
  • The ability to pay income tax in instalments over six months after the due date without incurring additional taxes.
  • A 10% price preference when awarding procurement contracts and tenders.
  • Exemptions from listing and prospectus fees charged by the FSA, as well as transfer agent fees, for three years.
  • Prioritised access to incentives from relevant authorities, such as usufruct lands and concession areas.

The incentive programme lasts for five years. To qualify, companies must meet certain conditions:

  • The company must have a minimum value of OMR 10 million.
  • At least 25% of the company’s shares must be offered at the time of listing.
  • The company must not change its legal form for five years after the incentive period, unless the FSA grants an exception.

Pathway 2: Promising Companies Market

The second pathway involves creating a sub-market within the Muscat Stock Exchange (MSX), called the Promising Companies Market, aimed at private and family-owned businesses, small and medium enterprises (SMEs), and emerging companies with a market value exceeding OMR 500,000.

Closed joint-stock companies interested in listing on this market will receive incentives from the Ministry of Finance, including a refund of two-thirds of the income tax paid after listing. The Tax Authority will also allow income tax to be paid in instalments, with an exemption from additional taxes for up to six months after the due date.

Additionally, the Tender Board will offer a 10% price preference in procurement and tender contracts under the same rules.

Pathway 3: Conversion of Limited Liability Companies

The third approach aims to incentivise the conversion of limited liability companies (LLCs) into closed joint-stock companies. It is designed for companies with a market value exceeding OMR 500,000 and a workforce of at least 20 Omani employees.

Under this scheme, one-third of the income tax paid by participating companies will be refunded for two years following their conversion. These companies will also benefit from a 10% price preference in procurement contracts and tenders issued by the Tender Board for two years, in accordance with existing regulations.

Moreover, LLCs that convert into closed joint-stock companies will be prioritised when submitting financing applications to the Development Bank under the incentives programme.