Incentives Driving Shift to Joint Stock Firms: What This Means for Investors and Business Owners in Oman
MUSCAT: The Ministry of Commerce, Industry and Investment Promotion has introduced a comprehensive incentive package to encourage limited liability companies to convert into closed joint stock companies or to establish new entities under this structure. This initiative is part of the Royal Directives unveiled last May as part of the Capital Market Stimulus Programme, aimed at enhancing company growth, boosting competitiveness, and supporting sustainable expansion across key sectors.
To promote the programme, the Ministry conducted field visits to companies and organized awareness sessions through branches of the Oman Chamber of Commerce and Industry across several governorates. These efforts focused on highlighting the advantages of conversion and guiding businesses through the requirements for becoming closed joint stock companies. Consequently, seven limited liability companies have already transitioned to closed joint stock companies, and ten new closed joint stock companies, including holding firms, have been established.
The Ministry emphasized that this transition has enabled participating companies to adopt stronger corporate governance frameworks, improve transparency and compliance, and strengthen their financial resilience. These advancements have enhanced the companies’ competitiveness both locally and internationally, while also attracting higher-quality investments.
Mohammed bin Salem al Hashmi, Director of the Regulatory Establishments Department at the Ministry, described the incentive programme as a strategic measure to bolster Oman’s business environment. He explained that converting to a closed joint stock company raises governance standards and regulatory compliance, fostering long-term sustainability, financial stability, and business growth, while contributing to the development of the national capital market.
He also noted that the initiative improves regulatory oversight efficiency and prepares companies to operate within clearer, more structured frameworks, balancing investor protection with market growth in alignment with economic diversification goals.
The incentive package includes a two-year exemption from one-third of income tax, fast-track financing access through the Development Bank, a 10 percent price preference in government tenders, flexible income tax payment plans, and a six-month exemption from value-added tax. To qualify, companies must have a minimum capital of RO 500,000, employ at least 20 Omani nationals or meet approved Omanisation levels, and comply with VAT regulations, ensuring the programme promotes meaningful growth and long-term economic sustainability. — ONA
Special Analysis by Omanet | Navigate Oman’s Market
The Ministry’s incentives for converting limited liability companies to closed joint stock companies signal a strategic push to enhance corporate governance, transparency, and financial resilience in Oman’s business landscape. For businesses, this creates a unique opportunity to access tax exemptions, preferential government contracts, and streamlined financing, while investors should consider the improved regulatory environment and higher governance standards as key factors for long-term stability and growth potential. Smart entrepreneurs must now evaluate the benefits of restructuring to leverage these advantages and position themselves competitively in an evolving market aligned with Oman’s economic diversification goals.
