Oman Rolls Out Incentives To Foster Capital Market Expansion

The Financial Services Authority (FSA) has introduced the 'Capital Market Incentive Programme' (CMIP) to enhance Oman's investment and business environment. This initiative aligns with the objectives of Oman Vision 2040, aiming to foster economic development.

The CMIP leverages various financing options available in the capital market to support different types of companies. The programme was announced during a press conference held by the FSA, alongside other key departments such as the Ministry of Finance, Ministry of Commerce, Industry and Investment Promotion, Muscat Stock Exchange (MSX), and Estidamah.

The programme aims to provide non-traditional financing sources for economic projects. It seeks to attract both local and foreign investments to finance new ventures, establish joint-stock companies, or convert existing businesses into joint-stock entities. This approach is expected to create investment opportunities for a broader investor base and enhance liquidity in the stock exchange.

Abdullah Salim Al Salmi, CEO of the Financial Services Authority, highlighted that the Royal directive launching this programme marks a significant step towards supporting economic growth. He noted that it paves the way for diversifying the private sector and empowering it to lead business activities more effectively.

The CMIP will be implemented over three phases spanning five years from its commencement. The first phase focuses on encouraging household firms and private companies with a market value exceeding OMR10 million ($26 million) to become joint-stock companies. The second phase involves creating a subsidiary market within MSX called the 'Promising Companies Market,' targeting private firms, SMEs, and startups valued over OMR500,000 ($1.3 million).

The third phase aims at converting limited liability companies into closed joint-stock companies. This phase targets firms with a market value above OMR500,000 that employ at least 20 Omani workers. An accredited evaluator by the FSA will assess the market value of companies in all three phases.

Al Salmi emphasized that these development options reflect the government's commitment to improving the business environment in the private sector and achieving Oman Vision 2040 goals. He added that establishing the 'Promising Companies Market' would provide an ideal setting for private firms, household businesses, startups, and SMEs to thrive and gain experience in financial markets.

This subsidiary market is expected to launch after its endorsement determinants are approved before the end of 2024. It will help prepare these entities for transformation into joint-stock companies listed in the regular market once they meet all requirements.

Mahmoud Abdullah Al Oweini, Secretary General of the Ministry of Finance, stated that His Majesty's approval of this programme aligns with the goals of the 'National Programme for Fiscal Sustainability and Financial Sector Development.’ This initiative aims to activate the capital market's role and increase its attractiveness for foreign investments through collaboration with relevant government departments.

Haitham Salim Al Salmi, CEO of Muscat Stock Exchange, underscored that launching this incentive programme would significantly enhance company status by offering additional fiscal options. Dr. Saleh bin Said Masan from the Ministry of Commerce stressed that transforming limited liability companies into closed joint-stock companies would boost public confidence in these firms.

Halima Rashid Al Zar'ee, CEO of ASMED, highlighted that startups are crucial drivers of economic growth. She noted that establishing a market for promising companies at MSX would positively impact emerging businesses by encouraging them to transform into joint-stock companies.

This comprehensive approach aims not only to support local investors but also to attract foreign investments. By doing so, it ensures sustainability and growth for existing companies while adopting best governance practices for long-term success.